Hello from Hamburg,
Among the uncertainties we are experiencing is the sudden erosion of the very foundation upon which entrepreneurship—rooted in self-determination and personal responsibility—rests: entrepreneurial freedom within a reliable legal framework. The freedom to start a business, hire people, and make decisions geared toward the well-being and progress of the company and its employees. The reliability of being able to enter into contracts with third parties that can be enforced in the event of breaches. Freedom and a reliable framework are suddenly no longer a given. Countries once rooted in democracy and the rule of law—such as Hungary, Turkey, or Venezuela—are at risk of sliding into arbitrariness and corruption, or have already done so. Autocratic structures are on the rise.
Mechanisms for undermining democracy include the dismissal of tens of thousands of federal employees by presidential decree; while there is certainly a need to continually streamline bureaucracy, it is the duty of civil servants committed to democracy to counter state arbitrariness with standards and laws. Incidentally, something similar occurred in the National Socialists’ “experimental laboratory” in Thuringia in 1929–30. Under the guise of streamlining the bureaucratic apparatus, civil servants loyal to the republic were dismissed in droves. The cutting of public funding for universities where unwelcome demonstrations or “degenerate” activities take place—such as at Columbia University in 2025 or the closure of the Bauhaus in Weimar in 1930—are further subtle means of co-optation. The appointment of loyal jurists to judicial positions, enabling the investigation of political rivals, the suppression of civil society protests, and the protection of loyal supporters from prosecution for everyday offenses. The decree requiring American companies and those operating in the U.S. to now demonstrate whether discrimination has occurred in the past due to internal diversity, equity, and inclusion (DEI) policies. Trump’s order to his Attorney General—which invites arbitrariness—to impose sanctions on law firms that bring “frivolous, unreasonable, and vexatious” lawsuits against the United States.
It is not yet certain that this plan will work out. There are sources of resistance. The American institutions that check and balance power are stronger than, for example, those in Hungary or Turkey: an independent judiciary, the legislative process—which, incidentally, has not even begun yet—federalism, and midterm elections. The strongest source of resistance is civil society—the non-governmental self-organization of citizens that cuts across the hierarchical and established procedures of parliamentary democracy (Paul Nolte). We can see just how vocal this otherwise quiet center of society can become in South Korea, Serbia, Turkey, or in Germany in the case of the AfD’s “remigration” proposals.
Companies are part of this silent center of society. Both history and the present show that we are susceptible to the favors bestowed by autocratic regimes: government licenses granted to loyal business leaders, the awarding of government contracts, or the lifting of regulations—such as those aimed at ending the regulation of artificial intelligence, as has just happened. The CEOs of the major tech companies, who were once bitterly opposed to Trump, are now cheering him on and financed his inauguration ceremony in grand style. In a show of preemptive obedience, Meta suspended its fact-checking activities in January of this year, after having originally established them as a countermeasure against Trump’s disinformation campaigns. The call for a strongman—with whom entrepreneur Hugo Stinnes hoped in 1923 to overcome the fragile structure of the Weimar Republic—or the financing of the NSDAP’s new party headquarters in Munich in 1931 by steel industrialist Fritz Thyssen are, unfortunately, part of the typical behavior of entrepreneurs in the face of rising autocrats. The reaction of the American law firm Paul Weiss, which once represented Trump’s opponents, also points in this direction. It yielded to pressure from the Trump administration and secured pro bono contracts worth $40 million for entities loyal to the government.
It is this path of least resistance that is so dangerous. CEOs, media executives, and university presidents who alter their behavior in the face of autocratic tendencies may be acting rationally from their organization’s perspective—in the best interests of the company. But this shift comes at a high collective cost. It diminishes criticism of and pressure on emerging autocratic structures, strengthens them, and undermines the very foundations of the rule of law and freedom upon which they themselves stand.
In recent—and certainly more stable—years, we’ve talked a lot about the importance of purpose for a company’s success: a purpose that is greater than the individual and worth striving for. It may be that this purpose will soon take on a new, even higher meaning. Where will we stand then?
How do you view the current developments in our democracies? What impact do they have on your company? On your leadership role in your day-to-day work?
