Updating Political Power

In the wake of the recent probes into Goldman Sachs and their trading operations, I thought it would be interesting to revise my discussion of the Business Networks and Political Power concept from Chapter 11 in Organizations and Organizing.  My original concept:

This section explains the cohesion among the elite in business and politics. Scott and Davis also explain the differing opinions surrounding the topic between pluralists and elite theorists.  The elites argue that there is cohesion among this capitalist class because they all come from similar backgrounds (schooling, socio-economic, etc) and that they share common interests. The pluralists argue that there are just as many things dividing business people as there are uniting them. For example they point out that different industries have differing objectives and cheap imported steel for car manufacturers, while beneficial to them, is not favorable to domestic steel producers. Scott and Davis also examine the connections between politics and business elites. They argue that more cohesion within business elite networks tends to be more effective in influencing policy change.

In retrospect I wish I had spent more time examining the political aspect of the concept. Scott and Davis explain that when the elites act on behalf of a corporation, they tend to band together and channel money towards political action committees or politicians that will positively impact their business—regardless of political affiliation. However, when personally contributing, they tend to focus on personal interests and trend towards conservative PAC’s and politicians.

In the wake of the probe into Goldman, I find this interested because of the huge amounts of money Goldman and other financial firms poured into campaigns and PAC’s over the last decade. Clearly the collective was not ultimately successful in thwarting off these types of political attacks and preventing the types of legislation now being pushed through both houses at break neck speeds. The political clout that seems to have gotten these firms along for the last decade is disappearing. This raises the question: at what point do normal, rational, constituent-based concerns trump the business elite’s interests? Based on what we’ve seen it takes two things: a major crisis like the recession, and an election cycle where politicians need to show average Joe that they are worthy of their vote.

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3 Responses

  1. Its crazy how capitalism offers the unique opportunity for business leaders to bribe politicians with campaign money who are in favor of pro business policies. After copious donations, politicians have the tricky job of balancing election votes from the general populous with the interests of donating elite. Its not always clear how much money politicians receive from each donor, but businesses offer up millions of dollars, as in the case of Goldman Sachs, to political figures, who align with current business interests. To address the question: “at what point do normal, rational, constituent-based concerns trump the business elite’s interests?” – Although I strongly agree with your two scenarios, I’d have to pose a third solution… take money out of politics. Its of course easier said than done, but its interesting to imagine a world where politicians are focused on votes rather than rubbing elbow with the rich and famous.

    • I agree that this would be an interesting approach, as it would essentially “level the playing field” for all parties involved–candidates and constituent groups. The question now, if moving forward with your proposal, is: what about Political Action Committees and other politically focused organizations? Are they to be banned from spending on specific candidates? What about specific causes/issues?

  2. […] Capitalist’s comments on the cohesion of politicians and wealthy elites in the blog Updating Political Power mirror a discussion of Karl Marx and the role of government in a capitalist society. Heartless […]

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