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

• In Event: 438 - Regular Session. Political Sociology

Abstract

The importance of overt levers of business influence on government policy—notably campaign finance and lobbying—has been overemphasized. Using Executive branch financial policymaking during the Obama administration as a case study, with special attention of the Dodd-Frank Act in 2010, this paper shows that those paths of influence are only two of many, and not, in this case, the most important. Drawing upon documents from the Federal Reserve Board and other regulatory agencies, reports from the business press, and policymaker memoirs, the paper places special emphasis on the structural power that large banks and corporations wield by virtue of their control over flow of capital and its impact on employment levels, business investment, and tax collection. This control, often made visible by a drop in “business confidence” is frequently sufficient to veto progressive policies, irrespective of more overt channels of influence like campaign finance or lobbying. Other times, economically disruption disinvestment combined with overt demands from the business community for active government policy constitute an overt “capital strike,” which then impacts all aspects of the policy process. This has important implications for our understanding of political power in the United States, and consequently for progressive social movement strategy.

Authors

• Tarun Banerjee, University of Pittsburgh

• Kevin Young, State University of New York at Stony Brook

• Michael Schwartz, Stony Brook State University