Meet the new progressive CEOs.

Commentary about business and finance.
Oct. 10 2009 7:08 AM

The New Progressive CEOs

In a recession there are few global-warming-denying libertarians in the boardroom.

Illustration by Rob Donnelly. Click image to expand.

Andrew Taylor, the CEO of Enterprise Rent-A-Car, in many ways epitomizes the business establishment. His family is No. 32 on the Forbes 400, their $7 billion fortune built on allowing middle-class people to drive cheaply. He donates mostly to Republican candidates. But when it comes to energy prices, he holds a heretical view. In the past year, gas has swung from $4 to $2.50 a gallon, which has made it difficult for auto manufacturers (and rental companies) to predict whether consumers will desire fuel-sipping compacts or fuel-burning SUVs. It strikes Taylor that if the government were to guarantee a stable gas price of between $3 and $4 per gallon—through a high national gas tax like they have in Europe, for example—it might spur innovation and hasten the shift to electric cars. "Consumers would know what kind of car they want to buy, and manufacturers would know what to build," he says.

A few years ago, such talk—looking to European-style intervention in an iconic American market, passing on higher prices to consumers—would have been enough to mark Taylor as a traitor to his CEO class. But Taylor is what you might call a progressive businessman. Not Progressive in the old-school, Robert La Follette reforming sense. And not progressive in the new-school, fair-trade coffee, Huffington Post sense. Since the 1920s, it's been common to hear businesspeople speak of themselves as being small-p progressives—pragmatic, eager to use new technologies and improve systems, willing to work with government and labor, not antagonistic to change. And we seem to be in a progressive moment.

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Wall Street may be conflicted about President Obama's economic-reform agenda. But a much larger swath of corporate America—retail, technology, infrastructure, energy, health care, transportation—is getting into it. DuPont CEO Charles Holliday has offered fulsome praise for the Obama administration's leadership. After an official at the U.S. Chamber of Commerce, which opposes efforts to pass a cap-and-trade law, called for a "Scopes Monkey Trial" on the question of global warming, John Rowe, the CEO of mega-power producer Exelon, quit the increasingly retro group, citing its "stridency against carbon legislation." In late September, Apple followed Exelon out the door. "We would prefer that the Chamber take a more progressive stance on this critical issue," an Apple official wrote. (There's that P word again).

Of course, big business's embrace of Obama's agenda is as much about profits as politics. Utility CEOs think carbon taxes and cap-and-trade measures are good ideas for the same reason Andrew Taylor favors reliably high gas prices. Certainty in costs and market prices lets companies make informed judgments about long-term investments. Meanwhile, the stimulus package has expanded the circle of companies for whom government contracting is now a big deal: renewable energy, smart-grid technology, building systems, electric vehicles, etc. BrightSource Energy, a startup in Oakland, Calif., is partnering with Bechtel, a charter member of the military-industrial complex, to build a massive solar facility in the California desert—pending nine-figure financial backing from the Department of Energy.

Taylor cops to some self-interest in pushing for higher gas prices. Enterprise runs an 800,000-car rental fleet and already offers hybrid cars—which are in demand when gas is $4 a gallon but not so much when it's $2.50. But there's a larger explanation for the emerging cleavage between progressive big business and the Main Street economy the Chamber of Commerce purports to represent. Large firms are likely to have more exposure to overseas markets, and they can see which way the wind is blowing. Enterprise has a significant presence in the United Kingdom, where high gas taxes provide price stability without killing the market. "Our vehicles there are smaller; they're more likely to be manual," Taylor says. "But people still drive like crazy."

Above all, the new business progressives are pragmatists. They know Obama is going to be around for four, possibly eight, years. In wartime, there are no atheists in the foxhole. And during this deep recession, there are few global-warming-denying libertarians in the boardroom. Or, to use a metaphor the Chamber of Commerce might embrace, there are fewer William Jennings Bryans and more John T. Scopeses.

Daniel Gross is a longtime Slate contributor. His most recent book is Better, Stronger, Faster . Follow him on Twitter.