On Tuesday night, Jimmy Kimmel was back on the air, and many Americans concerned about government coercion seemed to breathe a sigh of relief.<\/p>\n
Though Mr. Kimmel\u2019s employer, Disney, should have never caved to pressure to remove a talk-show host, the thinking went, and though it took too long for business leaders to stand up to the president\u2019s bullying, they allowed, at least corporate America was finally drawing a line in the sand. \u201cThis is about fighting for free speech and against these abuses by Donald Trump,\u201d Chuck Schumer, the Senate Democratic leader, wrote on X<\/a>.<\/p>\n But if the first eight months of the Trump presidency are any indication, the initial capitulation by Disney appears to be the more revealing part of the episode. After all, it\u2019s hardly the first time that corporate America has caved to the administration.<\/p>\n When Mr. Trump first issued an executive order against a prominent law firm, the firm quickly sued<\/a>, and several more firms discussed<\/a> joining a collective response. But by the following month, nine major firms had cut deals<\/a> with the White House.<\/p>\n After Mr. Trump suggested he might fire the chair of the Federal Reserve, some Wall Street chief executives gently pushed back, emphasizing<\/a> the importance of an independent Fed. But these executives seemed to go mysteriously silent about Mr. Trump\u2019s actual firing of a Federal Reserve governor. (Mr. Trump alleged that the governor had committed mortgage fraud, which she denied.)<\/p>\n Even ABC\u2019s fellow broadcaster, CBS, showed some fight after Mr. Trump sued it for $10 billion (later increased to $20 billion) over what appeared to be the unremarkable editing of a news interview. CBS journalists appeared uncowed during a May 4 segment on \u201c60 Minutes\u201d featuring a Democratic election lawyer who compared the president to a \u201cmob boss\u201d seeking \u201cprotection money.\u201d But CBS\u2019s corporate parent settled two months later.<\/p>\n Why are leaders in the media, law and finance failing to stand up more forcefully to what many inside these industries say are abuses of presidential power?<\/p>\n Fear is the most obvious answer. They are scared that the president will do more damage if they try to resist, scared that he may even target them personally.<\/p>\n \u201cIt\u2019s astonishing how spineless the masters of the universe and big bad billionaires really are,\u201d said Dennis Kelleher, a former corporate lawyer and Senate staff member who runs the financial reform group Better Markets. \u201cIf they\u2019re going to cravenly capitulate over the independence of the Fed, it\u2019s pretty clear they will not stand up for anything.\u201d<\/p>\n Sheer terror undeniably plays an important role. But there appears to be a deeper explanation, too. Resisting government coercion is often a matter of collective action: Companies are much more likely to succeed if they stand together, rather than fight on their own. \u201cIt\u2019s easy to pick off individual companies,\u201d Mark Mizruchi, a sociologist at the University of Michigan who studies large corporations, said in an interview. \u201cBut if they\u2019re all coming after you as a single collective, you can\u2019t \u2014 he\u2019d tank the whole economy.\u201d<\/p>\n Over the past few generations, however, the culture and ethos of the American business elite has changed. A once cohesive establishment has broken down, making collective action rarer and much harder to achieve. Competition among companies has become increasingly cutthroat. Chief executives are often more concerned with their share price than their company\u2019s long-term health, much less any genteel sense of obligation to a vague greater good. The civic organizations that once bonded corporate leaders to one another have been hollowed out or disappeared altogether.<\/p>\n \u201cThere\u2019s no conceivable way anything like this could have occurred in the 1950s or \u201960s,\u201d added Mr. Mizruchi, author of \u201cThe Fracturing of the American Corporate Elite.\u201d But today, \u201cit\u2019s every person for themselves.\u201d<\/p>\n The Rise of Shareholder Capitalism<\/p>\n The business world of the 1950s and 1960s was a clubby, inbred place and its apotheosis was the boardroom \u2014 especially the bank boardroom. The country\u2019s biggest banks populated their boards with chief executives from a wide range of industries in order to keep tabs on the economy. When they gathered around a conference table, the executives tended to agree on matters large and small.<\/p>\n The bank boards \u201cserved as a source of normative consensus and stability among the leaders of the largest corporations, in part by helping to forge similar worldviews and behavior,\u201d Mr. Mizruchi wrote in his book.<\/p>\n The agenda that these executives hashed out often reached far beyond their individual companies: Keynesian economic policies at home, anti-Communism abroad and, above all else, social order. It was an agenda of patrician civic-mindedness, built on feelings of mutual interest that often transcended party lines. And they enacted it through organizations and associations that allowed them to act as a unified front.<\/p>\n The Wall Street lawyer John McCloy, who served as the chairman of Chase Manhattan Bank as well as the Ford Foundation and the Council on Foreign Relations, was so well-situated that he came to be known as \u201cthe chairman of the establishment<\/a>.\u201d<\/p>\n Other business leaders joined groups like the Committee for Economic Development, which advocated what they considered to be sound economic policy. The committee, whose trustees included the president of General Electric and the chairman of Coca-Cola, was a key player in the making of the Marshall Plan and pressed the government to hold down unemployment by spending more and cutting taxes during recessions. After President Richard Nixon pressured the Federal Reserve to lower interest rates in the early 1970s, another group of top executives, the Business Council, announced that a majority of its economic consultants had \u201cstrong concern\u201d that the government\u2019s approach would trigger \u201cmore rapid inflation.\u201d (Inflation did subsequently spiral.)<\/p>\n Though members of this class were often elitist, racist and sexist, many at least thought of themselves as working in the national interest.<\/p>\n \u201cThe omnipresence of people like McCloy could be taken as evidence of conspiracy,\u201d the journalist John B. Judis wrote in his book, \u201cThe Paradox of American Democracy.\u201d \u201cBut it was more clearly evidence that the members of these different groups held a common view of their purpose.\u201d<\/p>\n By the mid-1970s, however, this order was collapsing. Global competition and inflation chipped away at the profits that had kept the boardroom-dwellers feeling flush, and social change was chipping away at the race and gender barriers that had kept boardrooms so white and male. Prominent conservatives, like the Supreme Court Justice Lewis Powell, had urged business leaders to fund opposition to government intervention in the economy and other threats to free enterprise. Their efforts helped pave the way for the deregulation of industries like airlines, media, telecom and finance.<\/p>\n Around the same time, a new theory was descending from the ivory tower. Based on the work of economists like Milton Friedman<\/a> of the University of Chicago and Michael Jensen<\/a> of the University of Rochester, it held that the interests of shareholders should reign supreme in corporate decision-making, and that the key challenge of capitalism was to ensure that the hired help \u2014 that is, the executives \u2014 did what was best for the owners.<\/p>\n Economists of this ilk favored tying executive pay to a company\u2019s share price, through stock options and stock grants. But their thinking unleashed a broader revolution, in which companies with underperforming stock became targets for corporate raiders, who could take them over, fire management and unlock vast piles of wealth.<\/p>\n Within a decade, the incentives of chief executives had completely changed. In the heyday of John McCloy and the bank boardroom, most chief executives had only a vague mandate to look out for their \u201cstakeholders<\/a>,\u201d and often sought to maximize status and influence. By the 1980s, chief executives had to spend their waking hours plotting to maximize their share price, or find themselves out on their ear.<\/p>\n After relatively little turnover among the country\u2019s largest corporations throughout the 20th century, almost one-third of the Fortune 500 companies vanished in the 1980s, many because of hostile takeovers. The average tenure of a Fortune 500 chief executive dropped from about nine and a half years in the early 1980s to around seven years in 2002, according to Mr. Mizruchi\u2019s book, where it has continued to hover<\/a>.<\/p>\n There were many advantages to breaking up the world of conglomerates, cartels and inbred boardrooms. The economy became more efficient and dynamic. Consumers often benefited and American firms became the most innovative on the planet (though critics later accused<\/a> firms of focusing too much on short-term profits, and new firms of amassing their own monopoly power). The executive suite became more accessible to talented people who were once excluded as racial and gender discrimination eroded, albeit too slowly and haltingly.<\/p>\n But breaking up the American business establishment did have at least one major downside: It made it increasingly unlikely for companies to stand together. Instead of trying to fit in at the club, executives were inclined to kneecap fellow club members.<\/p>\n One clear measure of this was their behavior in Washington. Through at least the 1960s, a large majority of corporate lobbying was a collective enterprise \u2014 it happened through trade associations, not lobbyists that companies hired directly. That had completely reversed itself a generation later. In 1998, the typical industry spent about 63 percent of its lobbying money on its own lobbyists rather than trade associations, according to the political scientist Lee Drutman. By 2012, that portion had jumped to 71 percent.<\/p>\n \u201cShareholder capitalism puts intense pressure on quarterly earnings,\u201d Mr. Drutman said in an interview. And that turned into pressure to gain an advantage over competitors with the government. \u201cIt becomes a real arms race,\u201d he said.<\/p>\n Getting Yours<\/p>\n In some ways, corporations have never been more powerful. But they are also more vulnerable than ever to outside pressure \u2014 at exactly the moment when a president was determined to bend them to his will.<\/p>\n The country\u2019s biggest banks have trillions in assets. But while bankers were once at the center of the club, they have spent the last few decades in an uneasy competition with hedge funds, private equity firms, asset managers and insurance-companies-that-act-like-banks.<\/p>\n Two banking-industry officials, speaking on the condition of anonymity because of the sensitivity of the subject matter, highlighted the rising challenge from financial tech firms and cryptocurrency, which have brought about fears that customers might go around traditional banks.<\/p>\n \u201cIf I\u2019m a traditional investment bank, my first instinct would be crypto should be regulated like everything else,\u201d said Mr. Drutman, the author of \u201cThe Business of America is Lobbying.\u201d \u201cBut now that it\u2019s not going to be, my second instinct is, \u2018How do I make it work for me?\u2019\u201d When the collective solution fails, make sure you get yours.<\/p>\n Big Law used to be a highly stable business dominated by a few dozen pedigreed firms. The top firms mostly promoted from within, and most partners stayed with the same firm for much of their careers. Major clients stuck around for decades. But over the last generation, law firms have increasingly competed for one another\u2019s rainmakers, who command eye-popping salaries and bring lucrative business. The fear of losing top talent and clients to rivals appeared to motivate<\/a> some of the country\u2019s biggest firms to cut deals with the Trump administration rather than fight executive orders targeting them.<\/p>\n American tech firms are among the most valuable companies on the planet. But over the past two decades, some of these companies have increasingly focused on undermining one another, not just in the commercial sphere but also in Washington<\/a>. The competition to build lucrative new technologies, most recently artificial intelligence, has made coordination a particular challenge. Tech leaders rushed one by one to court Mr. Trump after the election. They barely flinched when the president insisted that some of them effectively pay a tribute to the government<\/a> for the right to sell products in China.<\/p>\n Then there are the broadcasters, who have a history of pushing back against the White House. In a 1969 speech<\/a> that would anticipate the Trump administration, Vice President Spiro Agnew attacked the \u201cvirtual monopoly\u201d of television networks and questioned the power of their \u201csmall unelected elite\u201d to shape coverage of his boss, Richard Nixon.<\/p>\n At the time, NBC and CBS were by far the two largest networks in the United States \u2014 \u201cso damned big they think they own the country,\u201d President Lyndon Johnson once observed<\/a>. Perhaps in a tacit confirmation of the vice president\u2019s critique, they showed little fear in speaking out about what they saw as an attempt at coercion. \u201cMr. Agnew uses the influence of his high office to criticize the way a government-licensed news medium covers the activities of the government itself,\u201d the president of NBC complained<\/a>.<\/p>\n But in the era of shareholder capitalism, the overseers of ABC and CBS must keep their eyes on the stock price. And by that measure they have been in no position to push back. The parent companies of both networks, Disney and Paramount, have seen their market value drop sharply over the past four years amid intense competition from streamers like Netflix and Amazon.<\/p>\n