The rise of authoritarian capitalism: What does it mean for businesses that seek peace?

Abstract

The global trend toward authoritarian regimes has significant implications for businesses’ capacity to foster peaceful societies. This article delves into this issue by first examining the concept of authoritarian capitalism. Authoritarian capitalism is characterized by a dominant economic system that favors private property and for-profit production but restricts access to finance, contracts, and investment opportunities on the basis of political loyalty to the ruling government. Economic policies and governance prioritize the regime’s desire to retain power rather than maximizing societal benefits. Furthermore, this article examines the cases of Venezuela and El Salvador, each of which have each taken distinct trajectories toward authoritarian capitalism. Despite differences in their approaches, in both cases, democratic spaces that allowed business advocacy and local initiatives have been gradually closed. Often, the closure of these democratic spaces is a condition to accessing economic opportunities. Hence, the advent of authoritarian capitalism poses deep challenges for businesses. Lastly, this article concludes by proposing ways for businesses to confront the decline of democracy and the emergence of authoritarian capitalism.