I recently published the book Nordic Capitalism: Lessons for Realizing Sustainable Capitalism with Cambridge University Press. One of my central arguments is that capitalism needs democracy to function well, and business leaders have a responsibility to leverage their power to steward democracy. This represents an increasingly urgent concern in the United States.
Companies and business leaders wield enormous political power. They lobby, fund political campaigns and organizations, participate in business associations that lobby on their behalf, and help shape the rules by which capitalism operates. The question, then, is not whether business engages in politics. It already does. The question is how business leaders engage in politics, and on whose behalf. This is one area where I believe the Nordic experience offers American business leaders something important to learn.
One lesson I draw from the Nordic countries is that business leaders widely see themselves as lobbyists for society first, and their companies second. This aligns perfectly with the work on Corporate Political Responsibility, or CPR, that is fostered by Third Side Strategies and the CPR Hub. I first encountered the idea of CPR in the excellent 2018 California Management Review article “CSR Needs CPR: Corporate Sustainability and Politics,” by Tom Lyon and my UC Berkeley colleague David Vogel, with several others.1 CPR asks companies and their leaders to take responsibility for how they use their political influence and to consider the effects of that influence on the broader economic, civic, and natural systems upon which business itself depends.
I see the Nordic experience as an important real-world example of CPR. Of course, Nordic business leaders do not always get it right, and there are plenty of imperfections. But overall, the Nordic business community is about as good a real-world example of the principles represented by CPR as I know of on this planet. Furthermore, the vibrant Nordic economies show that taking this approach need not come at the expense of long-term business success. Indeed, the remarkable success of Nordic companies prompted a recent article in The Economist titled, “Why are Nordic companies so successful?”
Business leaders obviously have a responsibility to build successful, competitive companies. The Nordic countries are capitalist countries with vibrant private sectors and many extraordinarily successful global companies. But the Nordic region also has a longstanding tradition of business leaders recognizing that the health of their companies ultimately depends on the health of the societies in which they operate. As I write in Nordic Capitalism, Nordic business leaders commonly see themselves as "stewards of societal interests, not just their company's interests." And the Nordic public expects this of their business leaders. 
This distinction matters. American business leaders too often seem to reflexively lobby for lower taxes, rather than asking what level and form of taxation, and for what purpose, will best support a healthy economy and society. A business leader lobbying for lower taxes for their company, weaker environmental regulations, or rules that disadvantage competitors may be acting rationally from the firm's narrow perspective, while contributing to broader systemic harms to society. But when powerful actors consistently use their political influence in this way, we should hardly be surprised when capitalism begins to undermine the democratic institutions upon which it depends and public trust. The Nordic experience offers another way.
The Nordic business community has played an active role in shaping many of the institutions we now associate with Nordic societies. This includes universal healthcare and education, services for children and families, strong labor unions and collective bargaining arrangements, good wages, and sensible environmental policies. Nordic business has advocated for many of these policies from the late 1800s to today. These are hardly policies designed to maximize the immediate financial return of every individual company. But they reflect an understanding that business exists in society, rather than somehow apart from it.
The Nordic expectation that business leaders should consider broader societal interests did not simply emerge because Nordic business leaders were somehow more benevolent. They weren't, but they did prove to be incredibly pragmatic. From the late 1800s well into the twentieth century, the Nordic countries experienced periods of intense conflict between business and labor, and among capitalists and more radical socialist movements. These pressures pushed capitalists and business leaders toward negotiation and power-sharing with more reform-minded social democrats. These compromises helped give rise to the Nordic societies we know today, with the establishment of universal access to healthcare, education, paid parental leave, subsidized childcare, strong labor rights, and other structures developed through democratic processes to shape capitalism in the broader interest of society. Over time, these compromises became institutions and helped establish cooperation and power-sharing as defining features of Nordic capitalism.
Nordic company ownership structures further reinforce a long-term, stakeholder-oriented approach. Many major Nordic companies, including Carlsberg, Novo Nordisk, and Ramboll, are controlled by enterprise foundations that hold controlling voting rights in perpetuity, helping protect against the ills of short-termism. Cooperatives and other more democratic forms of ownership are also widespread across the Nordics. These ownership structures disperse economic power and embed long-term stewardship in company ownership itself. Rather than depending upon benevolent or heroic business leaders to somehow stand up to the short-term pressures of Wall Street, these structures give business leaders greater freedom to think and act for the long term. I think that in the U.S. we too often discuss capitalism as though it exists independently of democracy, and business leaders sometimes treat democracy as a hindrance to capitalism. I believe this is a profound mistake. Capitalism is extraordinarily powerful at generating innovation, economic activity, and prosperity. But capitalism does not determine the rules within which it operates. In democratic societies, we do that through democratic processes. We decide whether pollution should carry a price, whether workers should have a meaningful voice, how education is funded, how markets are regulated, and how economic power is constrained. As I argue in the book, "At the heart of democratic capitalism is democratic accountability and the dispersion of power in society." Nordic capitalism offers a particularly strong example of democratic capitalism in practice today.
An alternative is oligarchic capitalism, where power becomes concentrated, and political decisions increasingly represent the interests of a narrow few rather than the broader public. I argue that American capitalism increasingly reflects oligarchic capitalism. (I am hardly alone in that assessment.) This concentration of power undermines democracy and, importantly, impedes markets' ability to function effectively. What appears value-creating from the perspective of an individual firm may simply be shifting costs and risks onto society for the rest of us, our children, and their children to bear.
Business therefore has an important voice in democratic debates, but it should not have the deciding voice simply because it possesses greater economic resources. Rebecca Henderson captures the Danish experience especially well in her excellent book, Reimagining Capitalism. As I quote her in Nordic Capitalism, business in Denmark is "an important and active voice in the conversation, but it does not seek to control either the process or the endpoint." That strikes me as a pretty good description of corporate political responsibility.
This arrangement has helped produce remarkably resilient capitalist societies with globally competitive companies, strong democratic institutions, high levels of shared prosperity, and comparatively high levels of social trust. There is an important lesson here for the United States. We have become far too comfortable framing relationships between business, labor, the state, and civil society as inherently adversarial: business versus labor, business versus the state, capitalism versus environmental regulation. The Nordic experience suggests that cooperation is strength.
Perhaps the most important lesson from the Nordic experience, though, is one of pragmatism. Try things, learn from what works and what doesn't, be willing to admit when you were wrong, and then do more of what works and less of what doesn't. Rather than being pushed and pulled by competing political factions, business leaders can ask a more fundamental question: What actions will strengthen the democratic, economic, and societal systems upon which their companies ultimately depend, and which they, as citizens, parents, caregivers, and community members, can be proud to help foster? This is a key point I make in Nordic Capitalism: business leaders can choose to act as stewards rather than extractors, taking responsibility for their companies while also helping strengthen the societies and natural systems upon which those companies depend. I believe there is a great deal of purpose and meaning to be found in that work.
The United States faces extraordinary concentrations of wealth and political power and growing concerns about the resilience of democracy itself. Business leaders are already political actors, whether they acknowledge it or not. The question is what kind of political actors they choose to be. Do they use their influence primarily to secure advantages for their companies? Or do they recognize a responsibility to help maintain the democratic institutions and societal conditions upon which their companies ultimately depend?
This is where I see real common ground between the Nordic experience and Corporate Political Responsibility. Business leaders can advocate vigorously for competitive companies while supporting strong democratic institutions. They can participate in shaping public policy while recognizing that the democratic process must ultimately determine the rules. Their responsibility extends beyond the immediate interests of their individual companies to the health of the societies in which those companies operate.
For me, that leads to a straightforward principle for corporate political responsibility: Business leaders should see themselves as lobbyists for society first, and their companies second.
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