Latin American Lessons on Populism for Business Leaders

By Leopoldo Gomez- Grassi


Leopoldo Gomez-Grassi, Class of 2017. Leopoldo is a Mexican American interested in finance and politics



On April 21, UoC’s Latin American Matters hosted former Mexican President (1994-2000) and current Director of the Yale Center for the Study of Globalization, Ernesto Zedillo, as keynote speaker of the 5th LAM Policy Forum. For me, Dr. Zedillo’s visit had additional meaning because I met the man of whom my father, who served under him, spoke so much about during my childhood. President Zedillo is widely credited for having strengthened democratic institutions and for an exemplary transition of power after his party’s 72-year rule.

Dr. Zedillo spoke about the lessons that Latin American populists’ regimes could teach a developed world currently experiencing a notable rise of this kind of politicians, both on the left and right. Zedillo identified common threads, including a tendency to blame others (especially foreigners), advancement of conspiracy theories, and a knack for exploiting nationalist feelings to advance an economically retrograde agenda that invariably has a sad or catastrophic ending.

However, it was his diagnosis of the dynamic between populists and the elites that I found particularly timely and persuasive:

Populists establish themselves in power by finding support from citizens with resentment, frustration and anger towards the economic and political elite. Once in power, rather soon the populist leaders, and at least some part of the elite, pursue mutual accommodation. For a while the populist leader and the elite play with one another a “useful idiot” game, in which members of the elite bet on manipulating the populist leader by pampering his narcissistic and messianic inclinations, even becoming willing to support some policies that they have traditionally opposed and that could possibly go against some of their interests- but they do it with a view to preserving, on balance, their “capture” of the system. In turn, the populist leader likes to believe that he has achieved early surrender from the elite and sets about using this group to advance his agenda. [This game] lasts while the economy stays out of deep trouble…

Earlier this year Harvard University’s President Emeritus Lawrence Summers expressed fears that something along those lines is taking place in the US.

As populism spreads beyond the tropics, it seems prudent for MBA students to be vigilant and outspoken of corporations and business leaders when they are cozy with populist regimes. It is not only incongruent to enable those whose policies conflict with an institution’s corporate social responsibility agenda, but also necessary to oppose those who seek greater authority to the detriment of economic and political systems around the globe.

Perhaps a sensible response to the blame that the “The Golden Passport” (D. McDonald, 2017) places on business schools for their role in the prevalence of greed and lack of moral compass parts of the business community, would be that students demand that CEOs use their position and resources to condemn and oppose attacks on minorities, the environment, cities and allies. After all, the long-term economic benefit of those actions outweighs any temporary gains from being in good graces with an ill-fated populist.