Capital Strikes as a Corporate Political Strategy: The Structural Power of Business in the Obama Era

Abstract

The importance of overt levers of business political influence, notably campaign donations and lobbying, has been overemphasized. Using executive branch policymaking during the Obama administration as a case study, this article shows that those paths of influence are often not the most important. It places special emphasis on the structural power that large banks and corporations wield by virtue of their control over the flow of capital and the consequent effects on employment levels, credit availability, prices, and tax collection. At times, business disinvestment, combined with demands for government policy reforms, constitutes a conscious “capital strike,” which has the potential to shape political appointments, legislation, and policy implementation. At other times, the threat of disinvestment, the hint of a drop in “business confidence,” or rhetoric about job creation is sufficient to achieve those objectives. The present analysis has important implications for our understanding of political power and social change in capitalist economies.

Class Dominance or Fracturing? Sources of Broad Interest in Lobbying by Fortune 500 Corporations

“…This suggests that a globally oriented corporate elite, united by broad class interests developed in the policy-planning network, are in positions of influence in the Trump administration. Crucial to our understanding, many of these same firms and industries were represented on advisory committees put forward by his predecessor, President Obama, often by the very same individuals (Young, Banerjee, and Schwartz 2018). What these tell us is that, instead of marking a retreat or disarray of the corporate elite, the Trump administration provides a continuation of many of the same mechanisms of business political action: senior executives linked through a variety of corporate networks.…”

“…Specifically, their control over capital flows (however reduced) enables them to exert direct leverage on the political system. By threatening to redirect capital flows unless certain policy concessions are made, the “capital strike” provides another avenue for shaping public policy (Young et al 2018).…”

To change banks or bankers? Systemic political (in)action and post-crisis banking reform in the UK and the Netherlands

“…I argue that this owes to distinctive features of the countries' party systems. It catalyzed the British 35 See, for example, Bernhagen and Bräuninger (2005) and Young, Banerjee, and Schwartz (2018). 36 Pagliari and Young (2016).…”

Power at a distance: Organizational power across boundaries

“…But much of what we know about organizational power presumes large and integrated organizations. In politics, large and centralized firms can mobilize to influence policy and public opinion (Walker & Rea, ) or exert structural power over policymakers through their control of investment and jobs (Young, Banerjee, & Schwartz, ). Within organizational boundaries, executives and managers work to shape the behavior and outlook of employees or members, producing their image of the “ideal worker” (Williams, ) or fostering game‐playing that increases efficiency (Burawoy, ), for instance.…”

“…But much of what we know about organizational power presumes large and integrated organizations. In politics, large and centralized firms can mobilize to influence policy and public opinion (Walker & Rea, 2014) or exert structural power over policymakers through their control of investment and jobs (Young, Banerjee, & Schwartz, 2018).…”