Corporate statecraft refers to the strategic integration of private sector capabilities into national security and foreign policy efforts. It acknowledges the indispensable role that corporations play in areas such as economic security, innovation, and the implementation of government policies, especially through public-private partnerships. In this interview we explore the concept with John Tsagronis and Michelle Watson, key figures behind the development of the Corporate Statecraft course at the Institute of World Politics (IWP). Together, they offer insights into how corporate influence intersects with national security and global governance, drawing from their expertise in both the private and public sectors.
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How would you explain corporate statecraft to someone who’s never heard of it?
Michelle: John comes from the national security and government side of corporate statecraft, and I come from the business, or private sector side. We define corporate statecraft as a specific form of public-private partnership that involves the government and the private sector working together on issues of national and economic security. These partnerships help strengthen a nation both from a security and economic standpoint. In public-private partnerships, there is also a tendency in partnering with academia, especially in the tech world, because strong academic partners have contributed a vital and integral role in technology and innovation research and development.
John: At our school, IWP, we teach students to become integrated strategic thinkers, and that requires students to understand the different tools or instruments of statecraft in general. They understand military, intelligence, diplomacy, and economic strategies. However, one element that often goes underappreciated is the role of corporations in a nation’s security. Many national security courses fail to connect the dots between corporate power, state interests and their contribution to national security.
My work at the White House showed me how crucial businesses are in executing government policies. Whether it’s building military infrastructure or engaging in diplomatic efforts, corporations have a significant role. For example, in the defence industry, companies provide the resources, equipment, and expertise to strengthen national defence, and this extends beyond military needs into areas like infrastructure and technology.
A good illustration is the appointment of Rex Tillerson, former CEO of ExxonMobil, as Secretary of State during the Trump administration. Tillerson’s corporate experience and connections gave him access to world leaders, making him a powerful figure in international diplomacy—arguably more effective than a career diplomat because of the extensive networks and negotiation skills he had built in the private sector. Further, Ronald Reagan chose Caspar Weinberger to be Secretary of Defense and George Shultz to be his Secretary of State, both because they had experience in the private sector and government. So there’s a lot to be said for what I consider to be the indispensable role of corporations in our economic security, our foreign policy and our national security. But it’s also true for other countries. In the case of Hungary as well, security is going to be dependent on the health, vitality, creativity and innovation of private companies, and the more that Hungary depends on companies from other countries, the less secure it is going to be.
Michelle: We created the Corporate Statecraft course at the Institute of World Politics because we recognize the critical role of industry to a country’s national and economic security. Further, we teach that national security is funded by the government but is implemented by the private sector. This has become evident in the US, many Western countries, and somewhat in Hungary as well. Since we started this course, the idea and notion of Corporate Statecraft as a specific form of public-private partnerships has spread far beyond the US.
There needs to be a balance between a corporation’s need for profit and public interest. How do you think that can be managed?
Michelle: It is a balance. First of all, corporations are in business to make a profit, and it is their share-holder duty to do so. The relationship between profit-driven corporations and public interest is always about finding the right balance. During World War II, American companies were more aligned with national interests, often avoiding business with adversaries. Today, however, globalization has changed the equation. Many major corporations, like Google or Apple, seem more concerned with maximizing profitability than with U.S. national interests. They operate in a global market, often conducting business with both allies and adversaries, which complicates the alignment of their objectives with national security concerns.
John: Michelle and I sat down with former Secretary of Defense, Donald Rumsfeld, before we established the Corporate Statecraft programme and we consulted him on what we were planning to teach, and he was very supportive. He described for us the evolution of corporations in America. The shift in corporate priorities is a relatively recent phenomenon. Before World War II, companies had distinct national identities. But after the war, as globalization advanced, corporations began to spread across borders and adopt local identities in different countries. While this global expansion has many benefits, it also creates vulnerabilities. For instance, during the COVID-19 pandemic, the U.S. found itself heavily reliant on foreign suppliers for personal protective equipment (PPE), especially from China. When China restricted exports, the U.S. faced a critical shortage, underscoring the risks of overdependence on global supply chains.
John: The potential for corporations to have too much influence on national security policy is something that has long been recognized. President Eisenhower’s warning about the military-industrial complex highlighted this risk. Corporations working closely with the government, particularly in defence, can exert undue influence, sometimes pushing for policies that priorities profit over national interests.
The Foreign Corrupt Practices Act prohibits and penalizes corporate executives for bribing foreign officials to secure business. While not all countries enforce such laws—China, for example, allows bribery—U.S. corporate leaders are bound by strict regulations. The Securities and Exchange Commission (SEC) ensures a transparent and fair market, while the Federal Trade Commission (FTC) and other regulatory bodies impose rigorous standards. The Federal Acquisition Regulations (FAR), which govern government procurement, are particularly burdensome but aim to maintain fairness in purchasing, whether it’s for pens, tanks, ships, computers, or software. These laws protect against corporate excesses while recognizing their crucial role in America’s economic and national security.
Michelle: As a matter of fact, IWP and many schools in DC teach courses to both government and private sector students on how to contract with the government, because government contracting is cumbersome and very complicated.
Should multinational corporations engage in conflict zones?
John: It depends on the company and its industry. For example, there are manufacturers of weapons, medicines, and critical infrastructure like electric and telecommunications networks. Starlink is currently supporting Ukraine’s communications network. The question isn’t whether companies should be involved—they inevitably will be. The real question is what role they play, what products or services they provide, and how they impact the government in Ukraine, Russia, or contribute to peace. The key point is that it’s never about choosing between government or corporations; it will always be both. The nature of their relationship is what matters. Corporations are essential to every country, even in command economies like China, Iran, or North Korea, where private entities still produce goods.
Michelle: A good example is Starlink’s influence in the Ukrainian war. Two days after the conflict began, Russia disabled their ViaSat connectivity, cutting off Ukraine’s satellite services for military and civilian use. Days later, Elon Musk’s SpaceX provided Starlink capabilities, supporting both civilian internet and military targeting. Starlink initially covered these costs solely at a cost of about 20 million dollars a month. However, a controversy arose when Ukraine requested coverage to target Russian submarines near Crimea, but Musk refused, fearing it could trigger a nuclear war. As of June 2024, Starlink is still providing Ukraine their satellite services but through the Pentagon, and the US government is now funding these services to Ukraine.
The evolving concept of Corporate Statecraft, as articulated by John Tsagronis and Michelle Watson, underscores the increasingly critical role corporations play in national security and foreign policy. Through public-private partnerships, corporations are not only contributing to economic security but are also deeply embedded in the infrastructure of defence, diplomacy, and innovation. Both Tsagronis and Watson illustrate how the fusion of corporate power with government interests has been both a strength and a source of tension, particularly in balancing profit motives with public interests.
The role of corporations, whether in providing military resources or advancing technological capabilities, is indispensable. However, Tsagronis and Watson advise that the successful future of these public-private partnerships will depend on managing a delicate balance between profit-driven objectives and the broader interests of national security, a challenge that leaders in both sectors must continue to navigate.
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