With respect to the structural sources of business influence and working class resistance to neoliberalism, I am posting a section from a journal article published in the Royal Society journal- Kotuitui: New Zealand Journal of Social Sciences Online
Capitalist Power versus Workers’ Power
The growing centralisation of capital ownership through merger and take-over activity, which is a central aspect of capitalist development in the historical long-term, concentrates a growing proportion of economic resources and power in a declining proportion of the total population (Callinicos and Harman, 1987: 30-31; Hayes, 2002: 25-27; 202-211; Wright, 2000: 44-46). This, together with the highly unequal distribution of income and wealth that capitalist exploitation generates, ensures that the business associations which represent capitalist interests are generally, but not always, able to exert considerably more influence over government than any other set of class-based interest groups (Lindblom, 1977: 170-200; Miliband, 1968: 131-160; Mulgan, 2004: 315-319; Roper, 1993).
Governments are likely to be receptive to this influence because the state is fiscally dependent upon the taxation of profits and incomes generated in the process of capital accumulation and also because, in the context of increasingly deregulated and internationally integrated financial and capital markets, governments that fail to heed the concerns of business may face the prospect of capital flight (Jessop, 1983b: 93).
Not only are these association better funded, with more organisational resources and staff, than trade unions, they also have more extensive connections with policy-making agencies (Brosnan et al. 1990: 118-121). In addition, business associations are supported in their lobbying activity by wider patterns of capitalist influence over politics and policy-making. Most obviously this includes regular corporate donations to political parties. As a former long-standing Chairman of the Business Roundtable, Douglas Myers, puts it, “cheque books are always open for political parties, as long as they get things right” (statement in Barry, 2002).
Business people also participate directly in political parties and parliamentary politics, are co-opted onto official policy-making bodies, and have far greater opportunities to interact in social settings with politicians than working class citizens. For example, with respect to the social composition of the New Zealand parliament it is noteworthy that:
“In 2014 28 MPs (23% of MPs) listed their previous occupation as a ‘business person’; apart from 1999 and 2008 this has been the single biggest occupational category in NZ Parliaments since 1990.”
Business people can use their wealth to fund advertising campaigns prompting pro-business policies and the publication of books, policy documents, pamphlets, academic research with a probusiness neoliberal ideological orientation, and right-wing (classical liberal) think tanks like the New Zealand Initiative. The extensive and centralised pattern of capitalist ownership of the electronic and print media, the reliance of state-owned media organisations upon private sector advertising for a significant share of their revenue, the capacity of business associations to produce an endless stream of polished press releases, and the real threat of legal and/or political flak if a media organisation is perceived to be anti-business, combine to ensure that the media functions in ways that maintain the ideological hegemony of the dominant capitalist class (Carey, 1987; Herman and Chomsky, 1994: 1-35).
For reasons such as these, the neopluralist Charles Lindblom (Professor of Political Science at Yale, past President of the American Political Science Association), is correct to argue that:
"Although business modifies its demands somewhat to avoid collision with electoral demands on government, the principal reconciliation between the two control systems [business controls versus electoral controls] comes about by adjusting electoral controls to make them consistent with those of business. Businesspeople bend or bring electoral controls into line by themselves entering into interest-group, party, and other electoral activities and achieving disproportionate influence on them" (1980: 77-8).
However, the power and influence that capitalists are able to exercise with respect to government policy-making is always contingent and frequently contested by organisations and movements based in the working class. As I have argued at length elsewhere, the Marxist conception of class struggle precisely implies a clash between classes with distinctive interests, powers, and collective capacities (Roper, 2004: 23-27; 2005: 91).
Hence sophisticated neopluralists like Mulgan (2004: 320-322) are right to stress the fact that, although business is generally able to exert a disproportionate influence over government policy-making, other interest groups and the mass of voters in liberal democracies are able to exert a degree of counter-veiling power. This is because, among other things, the working class constitutes a substantial majority of the population in advanced capitalist societies, which means that governments are constrained, albeit to a limited degree, by the need to retain the support of at least a significant minority of the working class electorate (Hayes, 2002: 207).
The numerical size of the working class means that the interest groups and movements based in this class generally have much larger memberships than those of business associations. Thus, for example, unions had 354,058 members in December 2004, vastly outnumbering the combined membership of New Zealand’s business associations (Blackwood et al. 2005: 80). Furthermore, workers are strategically located in capitalist economic systems, providing the labour that is an essential prerequisite of production, distribution and exchange, which means that when workers undertake mass strike action they can exert tremendous pressure on employers and/or governments.
Finally, the size of the working class means that this class provides a potential basis for the mass mobilisation of its members in street protests, such as those involving between 300,000 to 500,000 people who opposed the introduction of the Employment Contracts Act in 1991 or the mass protests across France in 2006 that successfully defeated the French Government’s attempt to introduce Contract of Initial Employment (CPE) legislation aimed at reducing young workers’ employment rights (Dannin, 1997: 146; Coupe & Perrin, 2006: 23-54).
The Shifting Balance of Class Forces and Government Policy-Making
In an insightful consideration of the relationship between business and government, Deeks argues that the neopluralist conception of business influence on government falsely assumes that “the power of business is relatively stable”, whereas in reality “the political power of business can and does vary” (1992: 4).
In this respect, it can be argued that the classical Marxist conception of the relationship between business and government is stronger than the neopluralist conception because Marxists emphasize that the outcomes of class struggle, and class based political lobbying and mobilisations directed towards the state, are always historically contingent, being determined by a wide range of circumstances that, in addition to “the economic situation”, may include “political forms of class struggle”, “the reflections of all of these real struggles in the brains of the participants”, juridical forms and decisions, “political, legal, philosophical theories”, “religious views”, in which there is a complex “interaction of all these elements” (Engels, 1975: 394). Furthermore, because Marx (1967: 20) “regards every historically developed social form as in fluid movement” and therefore was concerned with its “transient nature no less than its momentary existence”, the Marxist tradition assumes that social and political arrangements are constantly changing, even if there is also a considerable degree of continuity with respect to the institutional structure of the state (Ollman 1990, 32).
From this perspective, explaining major political and policy change necessitates, among other things, an empirically and historically grounded analysis of employers’ organizations and business associations, on one side, trade unions and social movements on the other, as well as the shifting relationships between class based interest groups and social movements with the key actors and agencies operating within the institutional ensemble of the state.
The changing balance of class forces determines whether governments adopt reformist policies that incorporate, at least in part, the demands and aspirations of workers and/or social movements, or alternatively adopt policies that benefit the dominant capitalist class and its allies in the middle classes (such as farmers and members of the higher professions) while simultaneously disadvantaging the working class majority.
In this respect, Marxists and liberal pluralists share a kindred interest in the empirical study of interest groups because, despite all of the other substantial differences between these traditions, both consider that interest group activity profoundly influences government decision- and policy-making.
Barry A 2002. In a land of plenty. Video documentary produced by Community Media Trust in association with Vanguard Films, PO Box 3563, Wellington, New Zealand.
Blackwood, L, Feinberg-Danieli, Lafferty, G 2005. Unions and union membership in New Zealand: annual review for 2004. Journal of New Zealand Employment Relations 30(3): 79-89.
Brosnan, P, Smith, D, Walsh, P 1990. The dynamics of New Zealand industrial relations. Auckland: John Wiley & Sons.
BusinessNZ 2002. Submission on the Budget Policy Statement 2002. Wellington: BusinessNZ.
BusinessNZ 2005. The seven pillars of growth. Wellington: BusinessNZ.
BusinessNZ 2006. Brief to government. Wellington: BusinessNZ.
Callinicos, A 1987. Making history. Cambridge: Polity Press.
Callinicos, A, Harman, C 1987. The changing working class. London: Bookmarks.
Carey, A 1987. The ideological management industry. In: Wheelwright, T, Buckley ed. Communications and the media in Australia. Sydney: Allen & Unwin. Pp 156-179.
Chambers of Commerce and Industry 2003. Achieving faster growth for New Zealand. Wellington: New Zealand Chambers of Commerce.
Chambers of Commerce and Industry 2005. Election manifesto. Wellington: New Zealand Chambers of Commerce.
Chernomas, R. 1983. Keynesian, monetarist and post-Keynesian policy: a Marxist analysis. Studies in Political Economy 10: 123-142.
Coupe, A, Perrin, M 2006. France’s extraordinary movement. International Socialism 111: 23-34.
Cronin, B 2001. The politics of NZ business internationalisation, 1972-1996. Unpublished Phd thesis in Political Studies, University of Auckland, Auckland, New Zealand.
Dannin, E 1997. Working free. Auckland: Auckland University Press.
Deeks, J 1992. Business, government and interest-group politics. In: Deeks, J ed. Controlling interests. Auckland: Auckland University Press. Pp 1-15.
Deeks, J 1997. Business and politics. In: Miller, R ed. New Zealand politics in transition. Auckland: Oxford University Press. Pp 428-436.
Engels, F 1975. Letter to Joseph Block. In: Marx, K, Engels, F Selected correspondence. Moscow: Progress Publishers. Pp 394-396.
FF 2002. President’s address to FF national conference 2002. Wellington: FF.
FF 2003. Submission on the Budget Policy Statement 2003. Wellington: FF.
Fraser, I 2006. Keeping government business friendly? A case study of the relationship between Business NZ and the fifth labour government. Unpublished BA hons thesis, University of Otago, Dunedin, New Zealand.
Giddens, A 1979. Central problems in modern social theory. London: Macmillan Press.
Harris, P. and Twiname, L 1998. First knights: an investigation of the New Zealand Business Roundtable. Auckland: A Howling at the Moon publication.
Hayes, P 2002. The origins and dynamics of New Zealand’s changing class structure. Unpublished MA thesis, University of Otago, Dunedin, New Zealand.
Herman, S, Chomsky, N 1994. Manufacturing consent: the political economy of the mass media. London: Vintage.
Hope, W 1991. Media representations of the New Zealand economy. Unpublished Phd thesis in Political Studies, University of Auckland, Auckland, New Zealand.
Hyman, R, Fryer R 1977. Trade unions: sociology and political economy. In: Clarke, T, Clements, L ed. Trade unions under capitalism. Sussex: The Harvester Press.
Jesson, B 1987. Behind the Mirror Glass. Auckland: Penguin.
Jesson, B 1999. Only Their Purpose Is Mad. Palmerston North: Dunmore Press.
Jessop, B 1983a. The capitalist state and the rule of capital: problems in the analysis of business associations. West European Politics 6 (2): 139-162.
Jessop, B 1983b. The democratic state and the national interest. In: Coates, D, Johnston, G eds. Socialist Arguments. Oxford: Martin Robertson Pp 83-106.
Lindblom, C 1977. Politics and markets. New York: Basic Books
Lindblom, C 1980. The policy-making process. 2nd edn. New Jersey: Prentice Hall.
Marx, K 1967. Capital, Volume I. New York: International Publishers.
Miliband, R 1968. The state in capitalist society. London: Quartet Books.
Mulgan, R 1993. A pluralist analysis of the state. In Roper B, Rudd C ed. State and economy in New Zealand. Auckland: Oxford University Press. Pp 128-146.
Mulgan, R 2004. Politics in New Zealand. Auckland: Auckland University Press.
Murray, G 1989. New Zealand Corporate Class Networks. New Zealand Sociology 4 (2): 115-163.
NZBR 1989. Economic and social policy. Wellington: NZBR.
NZBR 1992a. From recession to recovery. Wellington: NZBR.
NZBR 1992b. Budgetary stress – why New Zealand needs to reduce government spending, deficits and debt. Wellington: NZBR.
NZBR 1992c. The public benefit of private ownership. Wellington: NZBR.
NZBR 1999a. Turning gain into pain. Wellington: NZBR.
NZBR 1999b. MMP: the right decision? Wellington: NZBR.
NZBR 2002. Getting serious about economic growth. Wellington: NZBR.
NZBR 2005a. Getting better value for money in public spending. Wellington: NZBR.
NZBR 2005b. Business Roundtable perspectives on the next three years. Wellington: NZBR.
NZBR 2005c. Economic success and how to get more of it. Wellington: NZBR.
NZBR 2006. Submission on the 2006 Budget Policy Statement. Wellington: NZBR.
NZBR and NZEF 1996. The status and jurisdiction of the Employment Court. Wellington: NZBR.
NZEF 1999. Taxes we love to hate them. Wellington: NZEF
NZMF 1990. The importance of manufacturing. Wellington: NZMF.
NZRA 2004. Submission of the NZRA to the Minister of Labour on the 2005 Review of the Minimum Wage. Wellington: NZRA.
NZRA 2005. Submission of the NZRA in relation to the Employment Relations Law Reform Bill 2003. Wellington: NZRA.
NZRA 2006. Submission of the NZRA in relation to Parental Leave & Employment Protection (Paid Parental Leave for Self-Employed Persons) Amendment Bill. Wellington: NZRA.
Offe, C 1985. Disorganised capitalism. Cambridge: Polity Press.
Ollman, B 1990. Putting dialectics to work: the process of abstraction in Marx’s method. Rethinking Marxism 3(1): 26-74.
Pilj, K 1984. The making of an Atlantic ruling class. London: Verso.
Roper, B 1990. The dynamics of capital in crisis: the political economy of New Zealand business, 1974 to 1987. Unpublished Phd thesis, Griffith University, Brisbane, Australia.
Roper, B 1991. From the welfare state to the free market: explaining the transition. Part II: crisis, class, ideology and the state. New Zealand Sociology 6 (2): 135-76.
Roper, B 1992. Business political activism and the emergence of the new right in New Zealand, 1975-87. Political Science 44 (2): 1-23.
Roper, B 1993. A level playing field? Business political activism and state policy formation. In Roper B, Rudd C ed. State and economy in New Zealand. Auckland: Oxford University Press. Pp 147-171.
Roper, B 2004. The globalisation of revolt. Red& Green 3: 13-36.
Roper, B 2005. Towards prosperity? Economic, social and political change in New Zealand since 1935. Victoria: Thomson Publishing.
Shaikh, A 1990. Capital as a social relation. In: Eatwell, J, Milgate, M, Newman, P eds. The new palgrave: Marxian economics. London: Macmillan. Pp 72-78.
Shaw, R, Eichbaum, C 2005. Public policy in New Zealand. Auckland: Pearson Speed Print.
Tenbensel, T 2006. Interest groups. In: Miller, R ed. New Zealand politics and government. 4th edn. Melbourne: Oxford University Press. Pp 525-535.
Wood, G, Rudd, C 2004. The politics and government of New Zealand. Dunedin: Otago University Press.
Wright, E 2000. Class counts. Cambridge: Cambridge University Press.