Recent Events in the US and Around the World Seem Likely to Sound the Death Knell for "Doux Commerce".
Even multinationals must now choose their block.
In America, it is safe to say that the world of responsible investment is being put to the test by societal debates. In Texas, the budget director wants to dissuade his pension funds from investing in socially responsible funds, accused of boycotting energy, a strategic sector for this state.
Asset managers are proposing anti-woke activism, or investing in companies shunned by ESG (environmental, social, and governance). The Twitter-Elon Musk saga was itself heavily colored by politics, with Musk presenting himself as a herald of free speech.
The initial promise of the ESG was that of moral and reasoned finance, away from political passions. This promise is confronted with its limit: in the population, values are multiple and sometimes in contradiction. Business and finance are not immune to these opposing values. These unprecedented shockwaves could foreshadow a new trend in modern capitalism, that of an economy segmented by the fractures of politics.
In the United States, companies are less and less able to stay out of the major social debates. Some have had to choose sides in the face of the repeal of constitutional protection of abortion, by funding abortions for their employees. The CEO of Disney was forced to take a stand against the governor of Florida in the debate over sex education in schools.
Businesses can no longer confine themselves to pluralism (pandering to the values of one side or the other) or neutrality. They must commit themselves to the risk of losing some customers and employees.
We are seeing the emergence of two parallel economies, with their galaxies of consumers, employees, suppliers, and shareholders united by common political convictions.
The polarization of the economy is becoming just as brutal because of the constraints of geopolitics: multinationals must choose which bloc they belong to. The war in Ukraine has forced nearly 1,000 companies to withdraw from Russia. State sanctions played a role, but pressure from stakeholders (shareholders, customers, employees) was decisive.
Rising tensions with China and the issue of human rights are pushing Western companies to relocate their production to their national territory (for example, the American semiconductor plan). We are discovering that multinationals do, after all, have a nationality and that it can dictate to them to backtrack on the globalization highway.
The theory of “doux commerce", also known as commercial republicanism, promised to dispassionate human relations through economics. Market interactions are by nature transactional: for each person, it is only a matter of improving his or her satisfaction as a consumer, not of engaging in a major social debate. But, as we can see, this separation is no longer effective. Should we be concerned about this? It is not so obvious.
The political differentiation of companies is becoming a new field of civic engagement: choosing a product and choosing an employer means choosing the causes one defends. Moreover, polarization towards the extremes is no more inevitable in economics than in politics: members of the circle of reason also want companies that embody their values. This is perhaps where the Old Continent, less polarized than the United States, can play a card: multinationals for moderates.
Some reading
A Scientific Study Confirms It: The Bitcoin Mining Industry Is Well Dispersed Around the World. Bitcoin opponents who dare to criticize the concentration of the Bitcoin mining industry should take the time to read this study. But, they probably won’t.
Margaret Thatcher’s Success Highlights the 3 Key Moments When You Need to Make a Difference to Succeed. Great success is earned and is never due to chance.
When Hyperinflation Rhymes With Chaos — The Story of Zimbabwe With Inflation of 231,000,000% in 2008. Robert Mugabe’s land reform ruined a country that was once the breadbasket of southern Africa.
The American Dream of Indra Nooyi, Former CEO of PepsiCo. A look back at the career of an exceptional woman who perfectly embodies the American dream.