Here,there,or delaware? How corporate threats distort democracy

In 2016, Marc Benioff, the CEO of Salesforce, issued a public statement that said that it would have to “consider reducing its investments in the state of Georgia,” if the legislature passed a bill that would allow religious individuals to deny service to LGBT individuals (Pramuk, 2016). Next month, he did the same in Indiana while threatening the state with “economic sanctions” (Hesseldahl, 2015). Other companies followed his lead, threatening to cancel plans in both states (Terkel, 2015). Georgia's governor eventually vetoed the bill, and Indiana revised it to prevent businesses from discriminating based on sexual orientation.

A few months later, Paypal canceled plans to build a facility in North Carolina because its legislature passed the “bathroom bill,” which prevented cities from banning discrimination based on gender identity. Doing so cost the state at least 400 jobs and an estimated $2.7 billion for the state economy (Associated Press, 2017). The North Carolina legislature later repealed the bill (Hanna et al., 2017).

In 2018, when Seattle's City Council passed a tax on large employers to fund aid for the homeless, Amazon threatened to stop its expansion plans in the city, which would have led to the loss of 7000 prospective jobs. The City Council repealed the bill (Streitfeld and Ballentine, 2018).

In May 2020, Elon Musk threatened to move Tesla's “HQ and future programs” to Nevada and Texas after Alameda County refused to reopen businesses that week due to shelter-in-place orders to protect workers from Covid-19 (Musk, 2020). “If we even retain Fremont manufacturing activity at all, it will be dependent on how Tesla is treated in the future,” he tweeted. Musk then reopened his factory in Alameda County in defiance of those orders (Marshall, 2020). A few days later, Alameda County agreed to let Tesla reopen the following week if they implement certain safety protocols (Shu, 2020).

In 2021, the Georgia legislature tried to regulate the “app stores” run by Apple and Google to give independent developers a higher share of revenue. If the bill passed, Apple “threatened to abandon key economic projects” in the state, which would have cost Georgia jobs and tax revenue (Birnbaum, 2021). (In other states, Apple offered “massive investments” to incentivize similar bills.) Georgia later killed the bill.

These are just a few of many similar cases, and there are undoubtedly many more instances that are not made public. The threat of corporate divestment also seems to be an increasingly common tool, as the public calls on corporations to oppose bills in more tangible ways, and companies seem more comfortable wielding power on both economic and non-economic issues. ¹

We may celebrate the outcomes in some of these cases but, from a democratic perspective, there is something intuitively troubling about them. One natural thought is that these are examples of unequal influence over the democratic process. If they are, however, they are not the usual sort of corporate inequality. These companies are not using their financial power to fund campaigns and gain influence, nor do they have unusual access to public officials’ time and attention. Instead, companies are using their control over their private property—the location of their headquarters or plans for expansion—to influence democratic decisions. Thomas Christiano describes the problem in the following way: “When, and to what extent, does the exercise of private property rights over capital, or even the ability to engage in this exercise, amount to an abridgment of democratic norms?” (Christiano, 2010: 199)

Because these examples do not follow the usual pattern of procedural inequality, Thomas Christiano argues that they represent corporate power over democratic outcomes. Companies are using their power to interfere with democratic aims after they have been enacted into policy, rather than during the decision-making process. Democratic legislatures or agencies plan to pass a policy that has a particular package of aims—such as increasing corporate tax revenue and supporting the homeless—and companies use their power to create and contract jobs and tax revenue to make it more difficult to realize those aims. This is a power that companies have over policy outcomes that ordinary citizens do not. So, when companies use this power to undermine democratic aims by altering policy outcomes, they are claiming extra political influence for themselves, which is a violation of political equality. And when companies announce their plans to undermine democratic aims before the legislature passes a bill, they can use their power to alter outcomes to kill the bill in advance.

Christiano has identified an important and neglected problem of political inequality: the ability of corporations to use their private property for political influence. However, we argue that the examples above fit better with a procedural account of political inequality. It is true that the companies are not using the typical tools of corporate influence on the democratic process: money or access. Nevertheless, we argue, the companies are violating a procedural norm: the norm of democratic reason-giving. Describing the problem as a violation of procedural reason-giving helps us explain our examples, while avoiding the problems of an outcome-based theory.

For reason-giving theories—such as deliberative and public reason theories—to account for the problem in these examples, however, these theories must be amended. Current deliberative and public reason theories would see no problem with the kinds of reasons that Apple and Paypal are offering for their policy proposals. The companies are saying that passing a particular bill would cost the community jobs and tax revenue, which are prototypical deliberative and public reasons. To see what is different about this corporate reason-giving, we introduce a distinction between “created” and “natural” reasons. Created reasons, we argue, are illegitimate inputs into democratic reason-giving and distort the democratic process. Once we introduce this distinction into reason-giving theories, they can account for what is troubling in our examples.

We will begin by describing Christiano's account of corporate political influence, noting both where it applies to our cases and where it misses the mark. We then offer an alternative account that evaluates the reasons that these corporations are offering the public. We distinguish between “natural” and “created” reasons, arguing that deliberative and public reason theories do not recognize this distinction but should, based on their underlying values. Making this distinction allows us to distinguish between problematic cases of corporate influence and the legitimate ways in which we should take corporate interests into account. It also helps to develop reason-giving theories by identifying an important class of illegitimate reasons. We close by discussing some important implications and objections to our view, including how it helps us to evaluate what has been termed “woke capitalism.”

Christiano's account: knowingly undermining democratic aims

According to Christiano, corporations have a duty to “cooperate with the pursuit of the democratically chosen aim” (2010: 205). When corporations knowingly undermine these aims, this is a violation of political equality. Christiano offers two main examples of this phenomenon. First, imagine that a legislature passed a bill to increase the minimum wage (2010: 196). The legislature aims, on behalf of its citizens, to raise wages for the lowest income workers, while retaining their jobs. If a company responds to this bill by firing minimum wage workers, however, then the company has used its power to undermine those democratic aims. This power is not available to ordinary citizens so when a company uses it, the company is claiming that it ought to have an influence over democratic aims that others do not have.

Second, imagine that an administration passes a bill to reduce industrial carbon emissions, with a package of aims of both improving the environment and retaining jobs (Christiano, 2010: 197). If a company responds by moving its operations to another country with less strict environmental regulations, then it undermines those democratic aims. This ability to alter policy outcomes is not a procedural inequality since the company did not have any extra influence over the decision. But it is still a violation of political equality because only powerful companies have the ability to undermine democratic aims.

What explains our aversion to the corporate behavior in the above examples, claims Christiano, is that the corporations are “advancing [their] interests to the detriment of the democratically chosen aim” (2010: 205). More specifically, Christiano claims that, to the extent that corporations are “knowingly” acting to advance their own interests to the detriment of the democratically chosen aims, this “suggests a failure of adequate respect for the democratic process” (2010: 205).

While we share Christiano's reaction to the cases, we think that what is problematic in those cases and others is the violation of certain procedural norms. Before discussing our own view, it's worth highlighting three central problems with Christiano's view: first, his account considers problematic seemingly benign corporate behavior; second, his account fails to consider problematic corporations that intentionally but not knowingly advances its own interests to the detriment of democratic aims; and third, his account does not consider problematic corporate behavior that only fails to undermine democratic aims as the result of a fluke.

The first problem with Christian's account is that it judges problematic seemingly benign corporate behavior. For instance, let's say that all the workers at a particular factory vote to relocate to a different state in which the cost of living is lower. The owner of the factory knows that relocating will lead to a loss of local tax revenue and some number of locally available jobs, but she decides the well-being of her workers is paramount. In such a case, the factory owner knows that relocating will undermine some of the legislature's chosen aims, but this does not seem particularly problematic. At a minimum, the company doesn't move in order to undermine democratic aims, so it does not seem to claim an unequal share of influence over those aims. Christiano denies this, saying that even, “If the capitalist is merely responding to the new set of relative prices and maximizing profits without any concern for changing government policy…it looks as if the capitalist in this context may still be affirming her interests over those of her fellow citizens because she is still saying that she may pursue her interests even if this undermines pursuit of the democratically chosen aim” (2010: 205). Christiano may be right that even an unintentional undermining of democratic aims is problematic. However, if we assume, as Christiano seems to, that governments always aim at retaining jobs and tax revenue, then any corporate move or cutback undermines democratic aims. If this is a violation of political equality, it is not the kind that our examples highlight. It is, instead, an unequal influence exhibited by many corporate actions, which are often insensitive to the public good.

The second problem with Christiano's account is that it only considers corporate activity problematic to the extent that it “knowingly” advances its own interests to the detriment of democratically chosen aims. If we adopt this knowledge requirement, then corporations that intentionally and successfully undermine democratic aims might not be considered problematic. For instance, if a corporation intentionally and successfully blocks a piece of environmental legislation from being passed, we should all agree that this is a problem. However, the corporation might fail to “knowingly” advance its own interests to the detriment of democratic aims for reasons that are more reflective of what it means to know something than the normative issues at hand. To take a simple example, the corporation may be mistaken about its own interests, and in particular about the impact of the proposed interests on its bottom line. If the corporation is wrong about the impact of the legislation, it does not “knowingly” advance its own interests to the detriment of democratically chosen aims. However, especially given that the corporation defeats the bill, there should be no disagreement that something's gone wrong in the democratic process.

The third problem with Christiano's account is that it does not judge problematic corporate behavior that only fails to advance its own interests to the detriment of democratic aims as the result of a fluke. For instance, let's say that a corporation has threatened to leave a state if business tax rates are not reduced. Even though people and legislators overwhelmingly approve of the current business tax rates, they would be devastated by the economic damage that the corporation might inflict. Begrudgingly, the legislators draw up a bill to cut taxes and vote in its favor. Just as the bill is about to take effect, however, an entirely unexpected citizen-led initiative is launched to scrap the bill, effectively delaying its implementation indefinitely.

In such a case, it seems clear that the corporation has acted in a manner that is problematic. They made every effort to advance their own interests to the detriment of democratically chosen aims and, at least in some sense, they succeeded. Even though the passage of this legislation did not lead to the actual advancement of their interests to the detriment of democratically chosen aims, at least not yet, this does not seem to change the fact that, from a democratic perspective, something has gone seriously awry.

While there may be ways to amend Christiano's view to handle these objections, we think that the more fundamental issue is his focus on outcomes as opposed to procedure. What each of these examples show, we will argue, is that procedural norms can easily be violated even if certain outcomes are not knowingly brought about, and procedural norms might not be violated even if certain outcomes are knowingly brought about. Given the elegance with which a procedural account can address these problems, a shift in focus seems more promising than piecemeal amendments.

Our account: creating reasons to influence policy

We locate the problem with Apple and Paypal's behavior in a violation of norms of democratic reason-giving. The most prominent theories of democratic reason-giving, deliberative and public reason theories, currently take no issue with the corporate actions in our examples. Offering reasons for a policy such as additional jobs or tax revenue are legitimate democratic reasons according to both theories. However, we argue that this is because they fail to distinguish between “natural” and “created” reasons that a company can offer for a policy. Once we draw that distinction, we will see that created reasons do not serve the normative purposes of these reason-giving theories.

The distinction between natural and created reasons stems from G.A. Cohen's classic discussion of why a kidnapper is not justified in claiming that the parents of the kidnapped child should pay the ransom to get the child back (1991: 276–278). The kidnapper argues that the child will not be returned unless the ransom is paid and so the parents should pay the ransom. The kidnapper is not justified in making this argument, Cohen claims, because he is the one who makes it true that, if the ransom is not paid, the child will not be returned. The kidnapper's argument is not justified because it relies on a reason that he makes obtain—a “created” reason. This contrasts with a bystander who informs the parents of the kidnapper's demands, as it is not the bystander who is making the return of the child dependent upon the payment of the ransom. Instead, the bystander is simply informing the parents of the natural consequences of the kidnapper's demand.

Just as a kidnapper can hold a child hostage in order to accomplish his financial objectives, corporations can hold cities’ economic well-being hostage for the achievement of its policy objectives. For instance, in the Apple case, Apple can cause economic damage to Georgia's employment and tax base by canceling its expansion plans. With this in mind, the corporation can honestly tell the state that, unless a certain policy or proposal passes, it will suffer serious economic hardship. While Apple will be accurately reporting the consequences of the policy's passage, it will also be the case that Apple is creating those particular consequences, as opposed to those consequences being natural. ²

What does it mean for the policy to “naturally” produce these results? While there's no perfect way to distinguish natural reasons from created ones, a helpful heuristic is to consider whether these reasons would be offered if the corporation did not support or oppose the policy in question. In Salesforce, for instance, it is clear that, if Salesforce did not oppose the “Anti-LGBT bill” it would not threaten to boycott the state of Georgia. In contrast, if a small business owner would lay off workers even if she supported raising the minimum wage, this is suggestive that the reason provided is a natural consequence of the policy, as opposed to a created one to influence policy. This test is highly suggestive for the simple reason that, if a reason would be offered regardless of the corporation's support or opposition to a policy, then it's highly unlikely that the reason has been created in order to influence a policy.

A norm against offering created reasons in democratic deliberation solves the problems with Christiano's account. First, even if the company's actions do not change policy outcomes—because, perhaps, another company moves in to compensate for any losses—there is still a problem of unequal corporate influence on the democratic process. Paypal, for instance, is creating reasons for the legislature to oppose the policy, even if other companies are creating reasons for the legislature to favor the policy.

Second, our account finds fault even if the company fails in its attempt to thwart the democratic will or does not follow through with its threat. If a company threatens to fire minimum wage workers and the legislature therefore kills the minimum wage increase, that is certainly problematic. But, in terms of procedural values, it is still a problem if the company tried to kill the bill and failed. Our account explains why that is by focusing on the reasons the company offers, whether or not those reasons ultimately win out (though it might be worse if they do). Our account also explains why a fake threat is problematic. A fake threat can distort democratic deliberations, even if the company does not follow through on its threat and change policy outcomes.

Third, our account allows for a company to decide to move or scale back its plans without violating democratic norms. Companies are no doubt aware that legislators always aim to retain the jobs and tax revenue that they provide, but they sometimes choose to move or scale back for reasons of efficiency or convenience. If they don't do this to influence any particular policy, they are not claiming any superior power over the public, or at least not more than the superior power they generally possess. Our account reserves its critique for instances such as our examples, where companies use their capital to exert unequal influence over particular policies.

Deliberative theories and created reasons

Once we distinguish between created and natural reasons, reason-giving theories offer a better account of what has gone wrong in our examples. As currently understood, however, the two most prominent reason giving-theories—deliberative and public reason theory—do not incorporate a norm against created reasons. Beginning with deliberative theory, we will argue that these theories fail to rule out created reasons but, given their normative purposes, should do so.

Deliberative theories do restrict the kinds of reasons that participants should offer each other, but that restriction aims to rule out self-interested reasons. They do this by requiring deliberative participants to aim at the common good. More specifically, deliberative participants must offer reasons that show that their favored policy promotes the common good, rather than their private interests. Iris Marion Young puts the requirement this way:

By this deliberative conception of the reason-giving requirement, all five companies in our examples appear to pass. When the companies threaten to cut jobs or deprive the state of tax revenue if the bills are passed, they are offering common-good reasons against the bill. The companies are effectively saying: This bill will make us all worse off because the cost in jobs and tax revenue outweigh whatever benefits the bill may have. The fact that the company is creating the loss of jobs and tax revenue does not seem to be an issue for deliberative theories. ³

We argue, however, that once one considers the normative purposes of reason-giving in deliberative theory, one will see that created reasons are not legitimate deliberative reasons. The normative purposes of deliberation are two-fold: (1) To promote the extent to which the strength of reasons influence deliberative decisions. And, as part of that effort, (2) To reduce the extent to which power influences deliberative decisions.

In an early theory of deliberation, Jurgen Habermas argues that participants’ choices should be shaped solely by the strength of reasons:

“Deliberations are free of any internal coercion that could detract from the equality of the participants. Each has an equal opportunity to be heard, to introduce topics, to make contributions, to suggest and criticize proposals. The taking of yes/no positions is motivated solely by the unforced force of the better argument” (1996: 304–305).

The purpose of allowing the strength of reasons alone to determine the outcome is also why deliberative theorists are concerned to argue that deliberation does not favor those who are better at arguing (Cohen and Rogers, 2003: 244–246). If argumentative skill influenced decisions, then those with that skill would be able to artificially increase the strength of the reasons they give by their rhetorical ability.

Created reasons pose the same threat as rhetorical skill. Those who can create reasons can take the reasons in favor of a policy and artificially add weight to them by threatening the loss of jobs and tax revenue. For instance, when Georgia is debating whether to regulate the App Store, it is considering whether that regulation would aid app developers and therefore promote jobs and tax revenue. This goal must be balanced against the possibility that the regulation would hurt Apple's revenues and therefore cost some jobs and tax revenue. According to deliberative theory, the strength of those two reasons should determine the outcome of deliberations. However, when Apple threatens to cut additional jobs and tax revenue if the regulation is passed, it puts its thumb on the scales by artificially adding weight to the reasons in its favor. The deliberative decision is therefore not the result of the better argument, but of the ability of one party to attach stakes to its position.

This differs from a company that offers natural reasons to support its position. If Apple would have canceled its expansion plans if the App Store bill were passed regardless of its stance on the bill, perhaps because its revenues would drop so much that it would lack the funds to expand, then it is no longer artificially adding weight to the loss of jobs and tax revenue from the bill; it is merely pointing out the reasons against the bill that already exist. It is letting the force of its argument win the day.

A related normative purpose of deliberation is to reduce the influence of power on deliberation. Joshua Cohen writes, “The participants are substantively equal in that the existing distribution of power and resources does not shape their chances to contribute to deliberation, nor does that distribution play an authoritative role in their deliberation” (2009: 24). Elsewhere, Cohen writes: “In the ideal case, collective decision-making through deliberation also neutralizes the political role of arbitrary preferences and power by putting collective decisions on a footing of common reason” (Cohen and Rogers, 2003: 242).

Similarly, Jane Mansbridge writes on behalf of nine prominent theorists that the core value behind deliberation is removing the influence of threats from deliberation.

The criterion that most clearly distinguishes deliberative from non-deliberative mechanisms within democratic decision is that in the regulative ideal, coercive power should be absent from the purely deliberative mechanisms. Participants should not try to change others’ behavior through the threat of sanction or the use of force (2010: 66).

Creating reasons is antithetical to this normative purpose as well. The ability to create reasons only makes a deliberative decision more responsive to the creator's power. When Salesforce, Paypal, Amazon, Tesla, and Apple threaten to cut jobs and tax revenue if a bill is passed, they are using their power to “change others’ behavior through the threat of sanction.” This differs from a company that offered “natural” reasons to oppose these policies. If Paypal would have withdrawn from North Carolina if the bathroom bill were passed regardless of its stance on the issue, perhaps because it could no longer recruit talent to a state that expressed those values, then Paypal is no longer using a “threat of sanction.” ⁴ Instead, it is merely issuing “predictions or warnings,” just as a third-party might do, which Mansbridge et al. acknowledge are distinct from threats and normatively unproblematic (2010: 81, n.46). ⁵

Similarly, Cohen and Rogers recognize the problem that corporate exit poses for deliberation.

“Equally, if parties are not somehow constrained to accept the consequences of deliberation, if “exit options” are not foreclosed, it seems implausible that they will accept the discipline of joint reasoning, and in particular to reasoning informed by the democratic idea of persons as equals. Firms retaining a more or less costless ability to move investment elsewhere are not, for example, likely to accept the discipline of reasoned deliberation about labor standards, with workers as their deliberative equals” (Cohen and Rogers, 2003: 249).

Here, Cohen and Rogers argue that companies that can leave unless they get their way are unlikely to deliberate with workers as equals. This is presumably because companies will offer workers exactly the kind of created reasons that we are deeming illegitimate. A company that leaves, or threatens to leave, every time workers propose a labor law is not deliberating as an equal. So, for the same reason that deliberation is inconsistent with the costless movement of capital, it is also inconsistent with the created reasons that this movement allows.

Public reasons and created reasons

Like deliberative theories, public reason theories would also accept created reasons as legitimate. For public reason theories, the appropriate kind of reasons—public reasons—are ones that all reasonable citizens can accept as free and equal. John Rawls fleshes out this abstract formulation in both negative and positive ways. Negatively, he argues that public reasons cannot be drawn from any comprehensive conception of the good, which roughly refers to the major religious and ethical traditions (Rawls, 2005: 453). This negative requirement poses no problem for the kind of created reasons we are interested in; a value for jobs and tax revenue is not drawn from any particular religious or ethical tradition.

Positively, public reasons are those that are “seen as implicit in the public political culture of a constitutional regime,” including “those mentioned in the Preamble to the United States Constitution: a more perfect union, justice, domestic tranquility, the common defense, the general welfare, and the blessings of liberty for ourselves and our posterity” (Rawls, 2005: 453). Although these values are vague, we can assume that the general welfare includes economic prosperity and that therefore jobs and tax revenue—assuming they are fairly distributed—promote the general welfare and qualify as public reasons.

More contemporary public reason theorists have explicitly endorsed economic gain as legitimate public reasons. In a concrete example of public reasoning, Jonathan Quong argues that citizens can legitimately offer others economic reasons to support building a football stadium instead of an art gallery.

The football supporters also appeal to another apparently public reason; they argue that the stadium will help the city's economy since it will serve as the new home for a professional team (the art aficionados cannot make a similar claim because there is already one gallery, and an additional one would not bring in any extra revenue) (Quong, 2010: 280).

If jobs and tax revenue qualify as public reasons, then the four companies seem to be offering legitimate reasons for opposing their respective policies. ⁶

Based on its underlying values, however, public reason theories should incorporate a norm against created reasons. Rawls describes the public reason requirement in the following way:

The criterion of reciprocity requires that when those terms are proposed as the most reasonable terms of fair co-operation, those proposing them must also think it at least reasonable for others to accept them, as free and equal citizens, and not as dominated or manipulated, or under the pressure of an inferior political or social position (Rawls, 2005: 446).

This quotation references two values underlying the public reason requirement: the mitigation of power and reciprocity. Like deliberation, one value of the public reason requirement is that it can and should mitigate the influence of power on collective decisions. This is why public reasons must not only be acceptable; they must be acceptable as “equal” and not as “dominated or manipulated, or under the pressure of an inferior political or social position.”

In our examples, however, the reasons the companies are offering seem like clear cases of manipulation borne of inequality. Apple and Paypal found a need in certain communities—the need for its capital—and used that need to manipulate the legislature into supporting its goals. This stands in contrast to “natural” reasons, which are not manipulative. If Paypal's expansion plans in North Carolina were a natural result of the bathroom policy—perhaps because it could not recruit talent in a state with those values—then it is not trying to use the community's need to extract this concession; it is simply reporting its own need to the state. And in reporting its need, Paypal is not invoking its superior power but recognizing the state's power over the company. In these ways, natural reasons are consistent with reason-giving among equals in a way that created reasons are not.

A second value underlying public reason is reciprocity. Grounding public reason in reciprocity means that reason-giving is a mutual, not unilateral, requirement. I owe you fair terms of cooperation only when you are willing to give me fair terms of cooperation. But allowing created reasons to count as public reasons circumvents reciprocity. If Salesforce can create reasons for any proposal it wants to make, then only the other party is subject to the requirement to offer fair terms of cooperation. Salesforce can meet the public reason requirement just by attaching the appropriate stakes to its preferences, while ordinary citizens must set aside their preferences to find reasons that Salesforce could accept. A norm against created reasons, therefore, restores the balance between the two parties. Neither side can make their preferred terms fair through power, and so both must seek out mutually acceptable terms.

There is also a third value that often grounds public reason: respect for persons. Charles Larmore argues that respect for persons requires us to engage others’ reasoning in the same way that we engage our own. As he acknowledges, threatening others (with the loss of jobs, for example) does engage their reasoning in some sense; they must decide whether to accede to the new reason your threat has created. But it does not engage their reasoning in the way that you engage your own. It is reason-giving merely to bring about compliance with your wishes.

“I believe that the source of this conviction [requiring reasonable agreement] is a principle of respect for persons. Let me explain. Observe first that the use or threat of force cannot be deemed wrong in itself, for then political association would be impossible. What we must regard as improper is rather to seek compliance by force alone, without requiring reasonable agreement about the rules to be enforced. For consider the basic fact that persons are beings capable of thinking and acting on the basis of reasons. If we try to bring about conformity to a rule of conduct solely by the threat of force, we shall be treating persons merely as means, as objects of coercion, and not also as ends, engaging directly their distinctive capacity as persons. True, they cannot be moved by threats except by seeing that they have good reason to fear what we may do. But we shall be appealing to their ability to act on reasons simply in order to achieve the goals of compliance–the establishment of public order, perhaps also the reformation of people's character. We shall not be engaging their distinctive capacity as persons in the same way as we engage our own, making the acceptability of the principle depend on their reason just as we believe it draws upon our own.[Emphasis Added] (Larmore, 1999: 607–608)

Similarly, those who ground the public reason requirement in respect ought to agree that created reasons do not engage others’ capacity to reason in the right way. Created reasons give people a reason to comply, but because they aim at compliance, they treat people's reasoning merely as a means.

As an example, consider a debate between friends Cara and Nina about which charity to donate money to. They agree that they’d like to donate to the charity that (1) works on a cause that is important to both of them and (2) uses its money effectively. Partway through the deliberation, Cara says that, unless Nina agrees to donate to Cara's desired charity, Cara will never speak to Nina again. In creating this new reason, Cara is certainly offering Nina reasons that she can accept; Nina wants to remain friends with Cara. But offering this created reason is not respectful of Nina as a reasoner. Cara is ignoring Nina's reasons for or against the charities by trying to find another lever within Nina's motivational set. Cara is not treating Nina as an end, but as a means that she must manipulate to get what she wants. Offering this created reason is not respectful reason-giving, even though it fits the definition of a public reason. It is a reason that Nina can accept, but it is not a respectful reason. Contrast this with Cara offering the same reason, but naturally. If Cara really can't be friends with Nina if she picked the wrong charity, then she is not being disrespectful in reporting that fact. Cara is not offering the reason to gain compliance but to report the very real stakes of the choice and give Nina the chance to weigh the costs and benefits according to her reason.

Implications

We have argued that corporate threats to move operations or cancel expansion plans represent the use of power to create reasons for policy, thereby distorting democratic reason-giving and violating political equality. These threats are the clearest cases of created reasons. In Cohen's case of the kidnapper demanding ransom, for instance, reasons are created via the use of a threat, whether that threat is sincere or not. At the same time, once we get clear on the normative problems with created reasons, we can more easily recognize their presence in nearby scenarios, such as with offers. This is a virtue of our account since (1) other accounts have difficulty distinguishing between threats and offers, ⁷ and (2) many paradigmatic threats can also be framed in terms of offers. (For instance, the kidnapper can be seen as “offering” to return the child in exchange for a ransom).

One potential case of creating reasons through offers was when Amazon solicited bids in 2017 for the location of its HQ2, a $5 billion project with 50,000 anticipated employees. 238 cities from across the country submitted bids that included enormous amounts of public subsidies and perks, such as the Newark, New Jersey offer of an estimated $7 billion in incentives (Garfield, 2018). When Amazon eventually announced its decision to split HQ2 between New York City and Northern Virginia, a number of politicians, pundits, and economic experts cried foul. In particular, these public officials, economists, and lawyers pointed out, the whole process seems to show “the whole thing was a charade designed simply to wring as much financial aid as possible from destinations Amazon had atop its list from the start” (Del Rey, 2019). ⁸

While we obviously don't have access to Amazon's internal deliberations, insofar as it is true that Amazon's solicitation process was simply meant to extract maximal concessions from pre-chosen municipalities, Amazon was creating reasons that distorted deliberation and public reasoning in those municipalities. Put another way, if Amazon would have moved to Queens regardless of the concessions, then the concessions demanded are not natural reasons for Amazon. Amazon moving to Queens is not a natural result of the concessions; it would have moved there anyway. The offer to move there if concessions are made is therefore a created reason, invoked simply to manipulate legislators by artificially attaching stakes to policies that it wanted passed. So, although Amazon's location of HQ2 is more naturally thought of as an offer instead of a threat, we can see how offers distort democratic deliberation and undermine public reasoning in just the same way. ⁹

Another way that a corporation can create reasons, though perhaps a less common one, is through its actions. For instance, if a particular corporation left every municipality that passed a law protecting the rights of transgender individuals, then it would not take long for municipalities to figure out the pattern. Once municipalities figure this out, they will be in the same position as they would have been had the corporation announced their intentions beforehand. In particular, municipalities will know that, if they pass certain laws protecting the rights of transgender individuals, then they run the risk of losing out on jobs and tax revenue. This is the problem of created reasons.

This type of created reason is important to think about because, at least arguably, it may have the greatest effect on municipalities. Let's say that, regardless of actual need, corporations generally punish and sanction municipalities for passing policies that are not “business friendly.” In such a case, even if no explicit threats are made, municipalities will fear the consequences of passing such policies. In this way, knowledge of the general behavior of corporations will distort deliberation and interfere with public reasoning. In other words, municipalities will not only have to fear the natural consequences of their economic policies, they will also have to fear the extent to which corporations will simply punish them for passing policies that corporations find objectionable.

The last implication of our account that is worth exploring is the extent to which individuals, either alone or in groups, can create reasons that distort democratic deliberation and undermine public reasoning. One context in which we might think that individuals create reasons is when they engage in protest. However, when protesters (for instance) shut down a highway to bring attention to social injustice, this generally does not create reasons. This is because protesters are most often trying to bring attention to reasons that others already have but to which they are paying insufficient attention. They are not (usually) using their power to shut down the highway to attach stakes to the adoption or rejection of policies, and they are generally highlighting the public reasons that there already are to support their proposals. At the same time, it is certainly possible for individuals and groups to create reasons. For instance, if individuals threaten a violent response to proposals to racially integrate schools or housing, this may interfere with community members’ ability to democratically deliberate and reason as equals with respect to the merits of desegregation.

Objections

Despite the advantages of our account over the alternatives, we acknowledge that it faces at least three types of challenges. First, one might object that, if we adopt the account offered above, then we must consider it equally problematic when small and large corporations distort democratic deliberation and undermine public reasoning. In fact, one might think, we may even be committed to the claim that it is equally problematic when individuals create reasons to express a political viewpoint. This is counterintuitive, one might think, since it seems like the real problem arises only when large and powerful corporations create reasons and distort democratic deliberation.

Our view is indeed committed to the claim that creating reasons to influence policy is wrong, whether it is done by small or large corporations. Attaching stakes to reasons to distort democratic deliberation, when that power is not equally available to others, is a violation of political equality in reason-giving. Since small companies have the ability to attach stakes that individuals do not have, the reasons they create are also problematic.

However, not all created reasons are equally problematic. Created reasons are worrisome to the degree that they distort deliberation, and small companies will have much less ability to distort deliberation through their created reasons than large companies. Companies like Apple and Tesla, with their ability to move thousands of jobs and billions in spending, will be able to create reasons that swing democratic debates, and these remain the most worrisome. Ordinary individuals, meanwhile, often have no ability to attach stakes to reasons that others do not have to an equal degree. So, we need not worry too much about an individual citizen that threatens to leave a community if a law is passed since others have equal power to threaten to leave if the law is not passed. There may still be something disrespectful about individuals offering such reasons, as in the example of Cara and Nina above. But it does not violate most of the values behind deliberation and public reason, as the created reasons of large corporations do.

This relates to a second objection to our view, which is that it seems to rule out political horse trading among legislators. Perhaps in some ideal deliberative scenario, this objector claims, it would be imperative that each issue be debated without recourse to created reasons. However, in practice, citizens fundamentally disagree about conceptions of the good and of justice and so we have to bargain. I agree to trade you my support for the homeless if you help me save the black spider monkey. These bargains seem to be a natural part of a functioning democracy. Even though such a trade involves created reasons, it seems to be normatively sufficient that there are good (public, legitimate) reasons to support both policies.

However, just as it is less (or perhaps not) worrisome when ordinary individuals create reasons because others have an equal power to do the same, it is also less worrisome when legislators create reasons in bargaining for their constituents’ goals. Each legislator (presumably) has an equal amount of voting power and has one vote to trade. So, legislators can still accept the others’ reasons as “equal citizens, and not as dominated or manipulated, or under the pressure of an inferior political or social position.” And the created reasons do not distort their deliberation when all have an equal power to attach stakes (a single vote) to the reasons they offer others. The process of vote-trading itself therefore does not seem to distort mechanisms of deliberation since, as Cohen and Rogers put it, “that is a force equally available to all” (Cohen and Rogers, 2003: 242).

The right kind of woke capitalism

Our goal in the preceding has been to account for our discomfort with the influence of corporations in democratic decision-making processes. Before closing, however, it is worth noting that there are some contexts in which, if we adopt the view offered above, we might be more comfortable with such influence.

In a 2018 op-ed, Ross Douthat introduced the term “woke capitalism” to refer to his perception that “the country's biggest companies are growing a conscience, prodded along by shifts in public opinion and Donald Trump's depredations and their own idealistic young employees, and becoming a vanguard for social change.” (2018) At the time of Douthat's writing, corporate opposition to many newly implemented policies of the Trump administration was reaching its peak, including widespread condemnation of his infamously discriminatory “Muslim Travel Ban” ¹⁰ Following on Douthat's heels–and continuing to the present day–numerous right wing commentators and politicians, including the Heritage Foundation and Marco Rubio, have denounced woke capitalism in strong terms. ¹¹

It's natural to think that our view is consistent with the wholesale condemnation of woke capitalism. But there are two important caveats to note. First, perhaps less importantly, companies can issue press releases and express their corporate stances without necessarily creating reasons. In fact, one might think that the most common form of woke capitalism is simply the issuing of such press releases, as they don't require any actual action (and thus any economic consequences) on behalf of the corporation. For instance, when both Coca-Cola and Delta expressed their sincere disapproval of Georgia's recently adopted voting restrictions, it's not clear this created any reason for the legislature to refrain from adopting it as neither company threatened action in response nor took any (Gelles, 2021).

The other important caveat in interpreting our view as being opposed to woke capitalism is that the creation of certain reasons may not interfere with public reasoning or undermine deliberation in the manner described above. In particular, in certain cases, we can expect that the creation of reasons may serve to maintain conditions crucial for reasoning or deliberation in the first place. To take an extreme example, if a corporation threatened to leave a country if the governmental leaders replaced their democratic institutions with autocratic ones, this does not seem like a problematic use of corporate influence. (At least arguably, one might interpret corporate divestment from South Africa during Apartheid and modern-day Israel along these lines). ¹² At a minimum, such a corporate threat or created reason wouldn't be a problem from the perspective of stifling public reasoning and deliberation, as the policy under consideration would simply eliminate public reasoning and deliberation altogether.

Another example of an intervention that our view would consider less problematic (if at all) happened in states such as Georgia that passed measures aimed at suppressing voter turnout among people of color in general and Black communities in particular. While the largest companies were content to simply voice their condemnation, a handful took concrete action in opposition. For instance, Major League Baseball moved its all-star game out of Georgia and Will Smith's movie studio relocated its filming for the movie “Emancipation.” ¹³ We are open to the argument that Georgia's voting restrictions do not undermine democratic deliberation among equals; the point we wish to emphasize here is that, if it is the case that such restrictions improperly limited participation in public reasoning and deliberation, then corporate involvement in fighting the legislation would not be subject to the above critique. This is because, as discussed above, corporate involvement often interferes with and supplants public reasoning and deliberation, but in some cases corporate involvement can be crucial for maintaining the conditions necessary for a democracy to function.

It's worth noting that this limited exception for corporate involvement in policymaking would not extend to any case in which corporations were putting their weight behind the morally correct policy position. For instance, even if it is morally correct to take steps to mitigate global warming, this does not mean that it would not be problematic for corporations to threaten municipalities that fail to do so. Perhaps even more controversially, although restrictions on bathroom usage for non-binary and transgender individuals is likely morally abhorrent, such policies do not clearly implicate the preconditions for participation in democratic processes. In this way, our view echoes public reasons and deliberative theorists’ claim that what's of fundamental importance in a democracy is not that we reach the unique morally right or just outcome. Instead, it is that each person gets to participate and be heard on theoretically equal footing.

Conclusion

Corporations like Salesforce, PayPal, Apple, Tesla, and Amazon have an enormous amount of influence over democratic deliberations. Some of that makes sense. Powerful corporations employ many people and are crucial to the economies in the cities and states they are located in. So, to the extent that policies will naturally affect local corporations, it is equally natural for government officials to take those effects into account. On top of that influence, however, corporations also have the power to create effects on the economy, unless the government adds even more weight to their interests. This power to create reasons allows corporations to sway deliberation in their favor on any political issue, simply by threatening job losses if the other side wins.

This sounds bad in the abstract, but there is surprisingly little fuss when it happens. Perhaps that is because people believe corporations have the right to do what they want with their property, as long as they are not trying to buy votes or access. Or maybe we accept it when the corporate pressure is on the side of the issue we favor. Of course, in a world in which state and local governments are enacting policies that are increasingly seen as oppressive, racist, and cruel, it is tempting to demand that corporations speak up on behalf of those who are being deprived of their rights and unfairly constrained.

However, as our examples suggest, corporate pressure can be applied for just and unjust ends—to support LGBT rights or to oppose support for the homeless. And these are just the public examples of corporate pressure, which corporations want to publicize. The private threats are likely to be for much less noble goals. In any case, it is only our very flawed democratic system that could convince us that the path to justice is to allow corporations more influence in the democratic process.

We can only improve that system by rejecting distorting influences where we find them. Of course, rejecting corporate distortions will still leave the other distorting influences on democracy which, in the United States, include money in politics, voter suppression, a polarizing and misinforming media environment, and an electoral system that rewards extreme positions. But the solution to these problems cannot be to push for corporate distortion in the hope that it will counteract the others.