Good morning.

Has Trump made business better? It’s interesting to consider how events of the last four years have changed the business community. Trump’s positions on issues like climate change, immigration and racial justice have helped force U.S. business leaders to take strong stands on those issues—often at the insistence of their employees.

If Joe Biden wins next month, and especially if the Democrats increase their congressional numbers, the positional dynamics will change. Business could find themselves facing a raft of regulatory proposals on these same issues—many of them ill-conceived—that forces them to shift to a defensive crouch.

But the forces driving the stakeholder capitalism movement go well beyond the vicissitudes of America politics. Colin Mayer captured the most important of those forces with a statistic he cited in his book Prosperity. I’ve quoted it before, but worth repeating:

“Forty years ago, 80% of the market value of US corporations was attributable to tangible assets—plant, machinery, and buildings—as against intangibles—licenses, patents, and research and development. Today, intangibles account for 85% of the market value of U.S. corporations.”

In a world where intellectual property rules, it is human capital—not financial or physical capital – that drives value. And the best companies ignore the social aspirations of their employees only at their peril. Climate change, relatively open labor markets, and racial and social justice will remain high on the agenda of companies that want to attract the best workers.

One basic political principle that I’m hearing more CEOs articulate these days, however, is this: Partisan solutions—whether the Affordable Care Act or the Trump tax cut—are not stable. And business needs certainty if it is going to deal effectively with long-term issues. Regardless of who wins next month, business should use its lobbying might to insist regulatory and tax efforts be bipartisan. Otherwise, the lurch from one political extreme to the other will continue.

More news below. And a new report out this morning shows the dramatic change of fortune that has hit the U.S. oil, gas and chemical industry this year. The report says that 70% of the 107,000 jobs lost by the industry between March and August may not return by the end of 2021. You can find the full report here.

Alan Murray

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