Tuesday, 20 September 2016

Business Political Lobbying- The Structural Sources of Business Power and Working Class Resistance

My research on business political activity is part of my long running programme of research investigating the historical shift in New Zealand politics and policy-making from social democratic Keynesianism to neoliberalism (Roper, 1990; 1991; 2005). My analysis of this shift focuses on the highly complex and dynamic relationships between the capitalist economic system and social structure, class struggle and wider patterns of social conflict (including business lobbying activity), political parties (including the class alignments of the parties, leadership and policy changes, patterns of electoral support, composition of party membership and the major sources of campaign funding), the change in the prevailing economic orthodoxy from Keynesianism to neoliberalism, the media representation, popularisation and justification of neoliberal ‘structural adjustment’, and the state, including its specific institutional structure, the role and ideological orientation of state agencies involved in policy-making, the interests of state actors, and the party political composition of government. 

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.  


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