Hostname: page-component-848d4c4894-sjtt6 Total loading time: 0 Render date: 2024-06-14T08:21:06.610Z Has data issue: false hasContentIssue false

The Power of Business in America: A Re-appraisal

Published online by Cambridge University Press:  27 January 2009

Extract

Over the past fifteen years, there has been a steady stream of books and articles on business-government relations describing the ‘privileged position’ occupied by the business corporation in the American political system. Taking issue with the pluralist paradigm that dominated writing and research on American national politics in the two decades after the Second World War, these writers have argued that business is not simply another interest group. Instead, they have suggested that its role in American society is more akin to that of a dominant class, power elite or private government: it thus possesses a degree of influence that invariably exceeds that of any other class or interest group. This appraisal of the political dominance of business in contemporary American society primarily rests on four sets of interrelated observations. These include the ability of business to define the political agenda; the extent to which business gains disproportionate benefits from the political process; the need for elected officials to maintain a high degree of ‘business confidence’; and the superior capacity of business interests to mobilize political resources, work closely with each other and shape the climate of public and elite opinion.

Type
Articles
Copyright
Copyright © Cambridge University Press 1983

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 These books include Bachrach, Peter, The Theory of Democratic Elitism (Boston: Little, Brown, 1967)Google Scholar; Domhoff, G. William, Who Rules America? (Englewood Cliffs, N.J.: Prentice-Hall, 1967)Google Scholar; Miliband, Ralph, The State in Capitalist Society (New York: Basic Books, 1969)Google Scholar; Bachrach, Peter and Baratz, Norton S., Power and Poverty: Theory and Practice (New York: Oxford University Press, 1970)Google Scholar; Surkin, Marvin and Wolfe, Alan, eds, An End to Political Science (New York: Basic Books, 1970)Google Scholar; Crenson, Matthew A., The Un-Politics of Air Pollution (Baltimore: Johns Hopkins Press, 1971)Google Scholar; Greenberg, Edward and Young, Richard, American Politics Reconsidered (North Scituate, Mass.: Duxbury Press, 1973)Google Scholar; Greenberg, Edward, Serving the Few (New York: John Wiley, 1974)Google Scholar; Katznelson, Ira and Kesselman, Mark, The Politics of Power (New York: Harcourt Brace Jovanovich, 1975)Google Scholar; Nadel, Mark, Corporations and Political Accountability (Lexington, Mass.: D. C. Heath, 1976)Google Scholar; Miller, Arthur S., The Modern Corporate State (Westport, Conn.: Greenwood Press, 1976)Google Scholar; Engler, Robert, The Brotherhood of Oil (Chicago: University of Chicago Press, 1977)Google Scholar; Garson, G. David, Power and Politics in the United States (Lexington, Mass.: D. C. Heath, 1977)Google Scholar; Lindblom, Charles, Politics and Markets (New York: Basic Books, 1977)Google Scholar; Parenti, Michael, Power and the Powerless (New York: St Martin's Press, 1978)Google Scholar. The quote itself is taken from Lindblom, , Politics and MarketsGoogle Scholar. See especially Chap. 13, ‘The Privileged Position of Business’, pp. 170–88.Google Scholar

2 Among the most influential statements of the pluralist perspective are Truman, David, The Governmental Process (New York: Alfred A. Knopf, 1951)Google Scholar; Dahl, Robert, Who Governs? (New Haven, Conn.: Yale University Press, 1961)Google Scholar; Polsby, Nelson, Community Power and Political Theory (New Haven, Conn.: New Haven University Press, 1963)Google Scholar; Rose, Arnold M., The Power Structure (New York: Oxford University Press, 1967)Google Scholar and Epstein, Edwin, The Corporation in American Politics (Englewood Cliffs, N.J.: Prentice-Hall, 1969).Google Scholar

3 The former is generally referred to as ‘monopoly capitalism’. See, for example, Baran, Paul and Sweezy, Paul, Monopoly Capital (New York: Monthly Review Press, 1966)Google Scholar. The later time-frame is associated with a Galbraithian notion of a ‘new industrial state’. See Galbraith, John Kenneth, The New Industrial State (Boston, Mass.: Houghton Mifflin, 1967).Google Scholar

4 Schattschneider, E. E., The Semi-Sovereign People (New York: Holt, Rinehart and Winston, 1970), p. 68.Google Scholar

5 Bachrach, and Baratz, , Power and Poverty, p. 15.Google Scholar

6 Bachrach, and Baratz, , Power and Poverty, p. 43.Google Scholar

7 Bachrach, and Baratz, , Power and Poverty, pp. 33, 34.Google Scholar

8 See, for example, the various essays in Green, Philip and Levinson, Sanford, eds, Power and Community (New York: Vintage, 1969)Google Scholar, and Connolly, William, ed., The Bias of Pluralism (New York: Atherton Press, 1969)Google Scholar. Lindblom, , Politics and MarketsGoogle Scholar, also makes much of this contention. See especially Chap. 15.

9 For the former issue, see, for example, The Politics of Planning (San Francisco: Institute for Contemporary Studies, 1976)Google Scholar; Leontief, Wassily and Stein, Herbert, The Economic System in an Age of Discontinuity (New York: New York University Press, 1976)Google Scholar; Initiative Committee for National Economic Planning, ‘For A National Planning System’, Social Policy (03/04 1975), pp. 1719Google Scholar. For the later controversy, see Nader, Ralph and Green, Mark, eds, Corporate Power in America (New York: Grossman, 1973)Google Scholar; Nader, Ralph, Green, Mark and Seligman, Joel, Taming the Giant Corporation (New York: W. W. Norton, 1976)Google Scholar; Schwartz, Donald, ‘The Case for Federal Chartering of Corporations’, Business and Society Review (Winter 19731974), 52–8Google Scholar; Aranson, Peter, ‘Federal Chartering of Corporations: An Idea Worth Forgetting’, Business and Society Review (Winter 19731974), 5964Google Scholar; and Hessen, Robert, In Defense of the Corporation (Stanford, Calif.: Hoover Institute Press, 1979)Google Scholar. For more on the general debate over corporate government and accountability, see Jacoby, Neil H., Corporate Power and Social Responsibility (New York: Macmillan, 1973)Google Scholar; Stone, Christopher, Where the Law Ends (New York: Harper and Row, 1976)Google Scholar; Dill, William, ed., Running the American Corporation (Englewood Cliffs, N.J.: Prentice-Hall, 1978)Google Scholar, and Vogel, David, Lobbying the Corporation: Citizen Challenges to Business Authority (New York: Basic Books, 1978).Google Scholar

10 ‘Reserved’, New Republic, 9 11 1974, pp. 56.Google Scholar

11 For a good perspective on this development see Cooper, Chester L., ed., Growth in America (Westport, Conn.: Greenwood Press, 1976)Google Scholar, especially Hays, Samuel, ‘The Limits to Growth Issue: An Historical Perspective’, pp. 115–42.Google Scholar

12 Carson, Rachael, Silent Spring (New York: Houghton, Mifflin, 1962).Google Scholar

13 Quoted in Silk, Leonard and Vogel, David, Ethics and Profits (New York: Simon and Schuster, 1976), p. 21.Google Scholar

14 See Rosenbaum, Walter, The Politics of Environmental Concern (New York: Praeger, 1973).Google Scholar

15 The phrase ‘adversarial culture’ is originally Lionel Trilling's. For a comprehensive description and analysis of its manifestation in American life in the 1960s and early 1970s, see Bell, Daniel, The Cultural Contradictions of Capitalism (New York: Basic Books, 1976)Google Scholar. For particular examples, see the references cited in footnote 1. For an overall analysis of this political phenomenon, which has occurred periodically in American history, see Huntington, Samuel P., American Politics: the Promise of Disharmony (Cambridge, Mass.: The Belknap Press of Harvard University Press, 1981)Google Scholar. Huntington's book represents one of the few scholarly efforts to analyse why the American public became more resentful toward all sources of authority, including the large corporation, during much of the 1960s and 1970s; he argues that since the ‘Great Awakening’, such ‘crucial passion periods’ have occurred in the United States approximately every sixty years. See Chap. VI, pp. 130–66.

16 For various perspectives on the political significance of this ‘new class’, see Bruce-Briggs, B., ed., The New Class? (New Brunswick, N.J.: Transaction Books, 1979).Google Scholar

17 These figures are from the Directory of Federal Regulatory Agencies, compiled by Penoyer, Ronald J., Center for the Study of American Business, 04 1982Google Scholar. For a summary view of the growth of federal regulation of business during this period, see Weidenbaum, Murray, Business, Government and the Public (Englewood Cliffs, N.J.: Prentice-Hall, 1977), pp. 68Google Scholar; Lowi, Theodore J., ‘Europeanization of America? From United States to United State’, in Lowi, Theodore J. and Stone, Alan, eds, Nationalizing Government (Beverly Hills, Calif.: Sage Publications, 1978), p. 19Google Scholar. Between 1965 and 1970 as many federal consumer protection laws were enacted as had been adopted during the previous seventy-five years. See Weidenbaum, , Business, Government and the Public, p. 35Google Scholar. Only a handful of these laws were initiated by business.

18 For statements of this position, see, for example, Bernstein, Marver, Regulating Business by Independent Commission (Princeton, N.J.: Princeton University Press, 1955)CrossRefGoogle Scholar, and Kolko, Gabriel, Railroads and Regulation 1877–1916 (New York: W. W. Norton, 1965).CrossRefGoogle Scholar

19 For a summary view of the pattern of conflict on social regulatory issues in Europe and the contrast with the United States, see Vogel, David, ‘The “New” Social Regulation in Historical and Comparative Perspectives’, in McCraw, Thomas N., Regulation in Perspective (Division of Research, Graduate School of Business Administration, Harvard University, Boston, 1981), pp. 155–86Google Scholar

20 For a discussion of the significant decline in the autonomy of regulatory officials that occurred during the 1960s and 1970s, see Bardach, Eugene and Kagen, Robert A., Going by the Book: Unreasonableness in Protective Regulation (Philadelphia: Temple University Press, 1981).Google Scholar

21 For the political strategy of the public-interest movement, see Vogel, David, ‘The Public Interest Movement and the American Reform Tradition’, Political Science Quarterly, XCV (19801981), 607–28.CrossRefGoogle Scholar

22 Wilson, James Q., ‘The Politics of Regulation’, in Wilson, James Q., ed., The Politics of Regulation (New York: Basic Books, 1980), p. 385.Google Scholar

23 See, for example, Cameron, Juan, ‘Nader's invaders are inside the gates’, Fortune (10 1977), p. 254.Google Scholar

24 These figures are quoted in Kelman, Steven, ‘Regulation that works’, New Republic, 23 11 1978, p. 18Google Scholar. Kelman argues that the benefits of regulation have well exceeded the costs. For a more critical view see Weidenbaum, Murray, The Future of Business Regulation (New York: Amacom, 1979).Google Scholar

25 See, for example, Ackerman, Bruce A. and Hassler, William T., Clean Coal, Dirty Air; or How the Clean Air Act Became a Multibillion Dollar Bail-Out for High-Sulphur Coal Producers and What Should Be Done About It (New Haven and London: Yale University Press, 1981).Google Scholar

26 Rattner, Steven, ‘Productivity lag causes worry’, New York Times, 8 05 1979, p. D2.Google Scholar

27 ‘The profit famine’, Wall Street Journal, 26 03 1979, p. 20.Google Scholar

28 For a discussion of the bureaucratic interdependency that has developed between corporate functions and government agencies, see Weidenbaum, , Business, Government and the Public, pp. 285–9Google Scholar. For a description of the vastly increased enforcement powers available to regulatory officials, even at the inspectorate level, see Bardach, and Kagen, , Going by the Book.Google Scholar

29 Guzzardi, Walter, ‘Putting the cuffs on capitalism’, Fortune (04 1975), p. 194.Google Scholar

30 These statistics are from Weidenbaum, , Business Government and the Public, p. 48.Google Scholar

31 Burck, Charles G., ‘How G. M. turned itself around’, Fortune (01 1978), p. 96.Google Scholar

32 A 1977 report of the Conference Board entitled Action Plans for Public Affairs noted: ‘the petroleum industry, most business executives agree, is among the industries hardest hit by government regulation in recent years. After what one company executive terms the many ‘boom’ years when oil was ‘riding high in Washington’, there has now been a drastic drop in the credibility and the influence of the industry’, p. 25.

33 For federal budgetary expenditures, see Economic Report of the President, Transmitted to the Congress January 1979 (Washington, D.C.: USGPO, 1979), Table B-70, Federal Budgetary Receipts, Outlays, and Debt, Fiscal Years 1970–80, pp. 264–5.Google Scholar

34 For documentation on the extent to which the performance of the economy influences the re-election prospects of incumbents, see Tufte, Edward, Political Control of the Economy (Princeton, N.J.: Princeton University Press, 1980).Google Scholar

35 The auto industry was periodically able to postpone the enforcement of auto-emissions and fuel economy standards. See Lundquist, Lennart, The Hare and the Tortoise (Ann Arbor: University of Michigan Press, 1980), Chap. 7Google Scholar. See below for the second example.

36 Not surprisingly, a concern with the lack of ‘business credibility’ became a major preoccupation of corporate executives. See, for example, Randall, Frederick and Duerr, Michael, Private Enterprise Looking at Its Image (New York: Conference Board, 1970).Google Scholar

37 The 1974–75 recession probably marked the nadir of business's political influence, coming as it did shortly after both the Arab oil embargo and the forced resignation of President Richard Nixon. For business reaction to these developments, see Silk, and Vogel, , Ethics and Profits, especially Chap. 2.Google Scholar

38 See, for example, Aspin, L., ‘Shortage scenario: big oil's latest gimmick’, Nation, 18 06 1973Google Scholar; and Hume, B., ‘The case against big oil’, New York Times Magazine, 9 12 1973, p. 40.Google Scholar

39 Wilson, G. N., The Changing Role of Business in American Politics (Political Studies Association Conference, Exeter, 1980)Google Scholar. The following description and analysis of business's shift in political strategy during the 1970s closely parallels Wilson's argument.

40 According to a Conference Board survey, seventy-one of the government relations practitioners who reported an increase in their companies' political involvement said the strongest factor was the impact of recent government regulations and legislation (McGrath, Phyllis S., Redefining Corporate-Federal Relations (New York: Conference Board, 1979)).Google Scholar

41 McGrath, , Redefining Corporate-Federal Relations, p. 2.Google Scholar

42 McGrath, , Redefining Corporate-Federal Relations, p. 58Google Scholar. For a more detailed description of the role of corporate political affairs offices, see Public Affairs Offices and Their Functions (prepared by the Public Affairs Research Group, School of Management, Boston University, 03 1981).Google Scholar

43 One management consultant estimates that 80 per cent of corporate planning is now concerned with how the world affects the company, and 20 per cent with what management wants; ten years ago these figures were reversed. See Brown, James K., The Business of Issues: Coping with the Company's Environments (Conference Board, 1979)Google Scholar. For more on how corporations attempted to respond to the more hostile political environment of the 1970s, see ‘Business Strategy for the 1980s’, Staff Task Force on Corporate Social Performance, in Business and Society: Strategies for the 1980s (US Department of Commerce, 12 1980), pp. 145.Google Scholar

44 McGrath, , Redefining Corporate-Federal Relations, p. 94.Google Scholar

45 McGrath, Phyllis S., Managing Corporate External Relations: Changing Perspectives and Responses (New York: Conference Board, 1976)Google Scholar; and Fegley, Robert L., ‘New breed of top executive takes charge’, Los Angeles Times, 31 12 1976, Part IV, p. 6.Google Scholar

46 From a speech by Shapiro, Irving quoted in Drucker, Peter F., ‘Coping with those extra burdens’, Wall Street Journal, 2 05 1979Google Scholar. This development has led some firms to appoint two chief executives – one to deal with the public and the other to manage the business.

47 Singer, James W., ‘Business and Government – A New “Quasi-Public Role”’, National Journal, 4:15 (1978), p. 596.Google Scholar

48 Vanderwicken, P., ‘Irving Shapiro takes charge at DuPont’, Fortune (01 1974), pp. 7881 +.Google Scholar

49 Kohlmier, Louis M., ‘The big businessmen who have Jimmy Carter's ear’, New York Times, 3 02 1978, Section 3, pp. 1, 11.Google Scholar

50 See, for example, ‘Preparing for the TV appearance’, Business Week, 14 09 1974, p. 167Google Scholar; and ‘Grooming the executive for the spotlight’, Business Week, 5 10 1974, pp. 57, 61.Google Scholar

51 McGrath, , Redefining Corporate-Federal Relations, p. 48.Google Scholar

52 See Ulman, Neil, ‘Companies organize employees and holders into a political force’, Wall Street Journal, 15 08 1978, pp. 1, 15.Google Scholar

53 The above figures are from Epstein, Edwin M., ‘Business and Labor Under the Federal Election Campaign Act of 1971’, in Malbin, Michael, ed., Parties, Interest Croups and Campaign Finance Laws (Washington, D.C.: American Enterprise Institute for Public Policy Research, 1980), p. 117Google Scholar. For more on PACs, see Rothenberg, Randall, ‘The PACs go to market on the Hill’, Nation, 18 11 1978, pp. 536–9Google Scholar, and Merry, Robert W., ‘Firms' action groups are seen transforming the country's polities’, Wall Street Journal, 11 09 1978, pp. 1, 31.Google Scholar

54 Silk, and Vogel, , Ethics and Profits, p. 178.Google Scholar

55 Quoted in the ‘Business Roundtable (A)’ – a case prepared by McGraw, Thomas K. for class discussion at the Harvard Business School, 1979, p. 5Google Scholar. For more on the Roundtable, see McQuaid, Kim, ‘The Roundtable: Getting Results in Washington’, Harvard Business Review (0506, 1981), pp. 114–23.Google Scholar

56 Ferguson, Thomas and Roberts, Joel, ‘Labor law reform and its enemies’, Nation, 6–13 01 1977, p. 20Google Scholar. Both General Electric and DuPont voted with the minority position, as reportedly did AT&T and General Motors.

57 According to US News and World Report, ‘The business groups are cooperating with one another to a far greater degree than they did in the past, entering into informal coalitions to tackle one issue at a time and showing more willingness to compromise and come up with a unified position’; see also ‘Now business shows its muscle in Washington’, US News and World Report, 10 07 1978, p. 20.Google Scholar

58 Merry, Robert M. and Hunt, Albert R., ‘Business lobby gains more power as it rides anti-Government tide’, Wall Street Journal, 17 05 1978, p. 15Google Scholar. More than a hundred organizations eventually collaborated to defeat this legislation, which was strongly supported by the building trade union. Common-situs picketing refers to the practice of picketing a worksite where employees of more than one employer are engaged in work. While the dispute is with one employer only, the intent and effect of the picketing is to shut down the entire job site, thus affecting employers who were not involved in the original labour dispute.

59 Lowi, Theodore J., ‘American Business, Public Policy, Case-Studies and Political Theory’, World Politics, XVI (1964), 677715.CrossRefGoogle Scholar

60 See, for example, Silk, and Vogel, , Ethics and Profits, Chap. 4, ‘How Business Views Its Critics’Google Scholar, and Banks, Louis, ‘Taking on the Hostile Media’, Harvard Business Review (0304 1978), 123–30.Google Scholar

61 See Sethi, S. Prakash, Advocacy Advertising and Large Corporations (Lexington, Mass.: Lexington Books, 1977)Google Scholar, for a full-scale study of this phenomenon. Sethi's data are updated in Sethi, S. Prakash, ‘Grass-roots Lobbying and the Corporation’, Business and Society Review (Spring 1979), 814Google Scholar. For a discussion of Mobil's effort, see Poe, Randall, ‘Masters of the Advertorial’, Across the Board (09 1980), 1528Google Scholar. See also Liff, David, O'Conner, Mary and Bruno, Clarke, Corporate Advertising: The Business Response to Changing Public Attitudes (Washington, D.C.: Investor Responsibility Research Center, 10 1980).Google Scholar

62 Simon, William E., A Time for Truth (New York: McGraw-Hill, 1978), Chaps 2 and 3Google Scholar. He writes: ‘Business must cease the mindless subsidizing of colleges and universities whose departments of economics, government, politics and history are hostile to capitalism and whose faculties will not hear scholars whose views are otherwise’, p. 231. Kristol, Irving advocates a similar course in Two Cheers for Capitalism (New York: Basic Books, 1978)Google Scholar. For a discussion of the growth in ties between intellectuals, universities and business in the late 1970s, see Dickson, David and Noble, David, ‘By Force of Reason: The Politics of Science and Technology Policy’, in Ferguson, Thomas and Rogers, Joel, eds, The Hidden Election (New York: Pantheon, 1981), pp. 260312.Google Scholar

63 Crittendon, Ann, ‘The economic wind's blowing toward the Right – for now’, New York Times, 16 07 1978, pp. 1, 9.Google Scholar

64 See Lott, John R., ‘Economics educator’, Reason (12 1978), p. 52Google Scholar; and Slambrouch, Paul Van, ‘A new kind of think tank’, San Francisco Business (07 1976).Google Scholar

65 For a good summary of the lobbying efforts underlying each of these developments, see Shabecoff, Philip, ‘Big business on the offensive’, New York Times Magazine, 9 12 1979, p. 134.Google Scholar

66 For a discussion of how business succeeded in this conflict, see Walker, Charles E. and Bloomfield, Mark, ‘How the capital gains tax fight was won’, Wharton Magazine (Winter 1979), pp. 3440.Google Scholar

67 See, for example, the Special Issue of Business Week, devoted to ‘The reindustrialization of America’, 30 06 1980.Google Scholar

68 For the decline of public confidence in government, see Huntington, Samuel, ‘The Democratic Distemper’, in The American Commonwealth (New York: Basic Books, 1976)Google Scholar. He writes, ‘Between 1969 and 1971 the proportion of the population having a great deal of confidence in the leadership in each of the major governmental institutions was cut in half’, p. 17.

69 See, for example, Thurrow, Lester, The Zero-Sum Society (New York: Basic Books, 1980)Google Scholar, and Mueller, Ronald, Revitalizing America: Politics for Prosperity (New York: Simon and Schuster, 1980)Google Scholar. Although their specific policy prescriptions clearly differed from those of business, their analysis of the fundamental problems confronting the American economy was strikingly similar to that of more conservative analysts. For a broader analysis of this shift, see Vogel, David, ‘The Inadequacy of Contemporary Opposition to Business’, Daedalus (Summer 1980), 4758.Google Scholar

70 Baibus, Isaac, ‘The Concept of Interest in Pluralist and Marxist Theory’, Politics and Society, I (19701971), p. 173.Google Scholar