Business and politics in the United States and United Kingdom

Conclusion

A central objective of the business mobilization of the late 1970s and early 1980s in both the United States and Great Britain was to restore company profits to levels of an earlier decade. In the name of “reindustrialization” and “recapitalizing capitalism,” government spending was targeted as the chief impediment to such prosperity.⁶⁴ In the American case, government restraint on business decisions has also been named as a critical target. And in Britain, government failure to resist and control organized labor has been identified by business as a first priority as well. All point toward government reductions in social spending, the dismantling of programs that regulate business, and the scaling down of programs that benefit labor.

The political thrust, electoral success, and continued commitment in office of the Thatcher and Reagan governments were in no small part a product of this business rush into politics. Both governments sharply reduced controllable social spending, lifted controls on business, and cut back unemployment, welfare and other programs of special interest to labor. The squeeze on the private sector was thus translated into a shrinking public sector, with the exception of military spending. The decline of the welfare state, the slowing of social spending, and the end of activist government in the U.S. and U.K. were thus not simply, and indeed not largely, a product of spontaneous disaffection with the socially interventionist state. Not were they the product of an unarticulated, inchoate response to the chronic stagnation of the “British disease” and its American strain.

Rather, the rise of new conservative forces that were among the pillars of the Conservative and Republican governments was importantly a product of the formation on both sides of the Atlantic of informal and formal organizational networks linking together most large corporations. These networks facilitated the political mobilization of business - by helping business to identify the public policies most needed for its aggregate welfare, and by helping business to express these preferences in electoral campaigns, government lobbying, and other forms of intervention. There was, however, no certainty of outcome. Although both the Reagan administration and Thatcher government ruled in part because of their corporate allies, neither was particularly responsive to the changing calculus of business, nor of the economy for that matter. In power, these governments were guided by their own agendas, coincident only in part with what large corporations and the inner circle would have liked to see achieved.

The formation of a classwide system of organization within the corporate community is rooted in the rise of institutional capitalism, and this system is generically akin to that expected by instrumentalist analysis. But the classwide organization has emerged alongside the far more atomized system based in managerial capitalism and expected by pluralist and structuralist analysis. Thus, both schools of theory and analysis are partly right. Pluralism and structuralism have tended to read the organizational patterns associated with managerial capitalism, while instrumentalism has more often read the patterns associated with institutional capitalism. But both portrayals are partly wrong if overextended in application. And both miss much of the diversity and complexity in the social organization of the corporate community that is fundamental to corporate political behavior.

Accordingly, we should revise our thinking about how the corporate community is organized and how it enters the political process. With emergence of classwide organization, more overall planning initiative is assumed by business, less by government. Rather than having to sift through the disparate demands of a thousand chief executives, government officials are presented with an integrated vision already developed by those members of the corporate community best positioned to reconcile the competing demands. Of course government decision makers are subjected to numerous other constraints and pressures, and there is no certainty that any given business position will prevail. Indeed, many are certainly rejected. The Confederation of British Industry and the Business Roundtable were frequently at odds with the Thatcher and Reagan governments. Still, the classwide foundation of the inner circle makes its position more authoritative and less easily ignored.

We also need revision in our thinking about the nature of the firm. Under managerial capitalism, corporate principles prevail, and the firm is the primary unit of action. Professional management is fully in charge, the company's profits are the first and final order of business, and a Hobbesian competition of all against all is the environment. The thrust of corporate decisions and politics under managerial capitalism are quite different from those during the era of family capitalism, when upper class principles prevailed, and family was the central unit of action. The founding entrepreneur and kin held control, family fortunes were of guiding concern, and intermarriage produced alliance and reduced competition.

But the emergence of institutional capitalism and classwide principles of organization have introduced still different rules. The firm remains a primary unit of action, but the transcorporate network becomes a quasi-autonomous actor in its own right. Company management is now less than fully in charge; classwide issues intrude into company decisions; and competition is less pitched. Management decisions to underwrite political candidates, devote company resources to charitable causes, give advertising space to matters of public moment, and assume more socially responsible attitudes derive in part from company calculus, but also in part from a classwide calculus.

Structuralist analysts emphasize the “relative autonomy” of the state, signifying that the government's partial independence from business permits it to more effectively formulate policies facilitating the profitable growth of all large companies.⁶⁵ We find relative autonomy too, but in a different location. The network of the inner circle arises from a corporate base - but at the same time enjoys a degree of autonomy from it. Yet it is also a limited autonomy, for it is structured in a way that closely channels inner circle actions toward improving the political climate for the entire corporate community. The state may well add further shaping to the policies that emerge from the corporate community, but the relative autonomy of the inner circle now ensures that a significant part of the process of interest aggregation is achieved within the business community itself.