Volume 11, Issue 1

Lobbying in general – but business lobbying in particular – has changed a lot in the past two decades with the transformations in technology, the continued polarization of Washington, and the fragmentation of the media. In this new world, business lobbying – both strategically and tactically – is beginning to look a lot like electoral campaigns. And this raises a host of questions about what’s the most effective means of advocacy in this new world. The use of research, media (both earned and paid), grassroots and elite mobilization, are playing more prominent roles in the advocacy world. But just like political campaigns are asking new questions about the effectiveness of various tactics – business groups need to start doing the same. The fact that the growth in the size of the lobbying industry is both a direct result of the growth of government – but also a facilitator of government growth – is also explored in this article. Finally, all of the changes in the tactics of lobbying raise serious questions about whether the current legal framework and even the popular or academic understanding of advocacy accurately captures who is really engaged in the influence business.

This essay explores the concern that in contemporary American Politics, business exercises outsized and historically unprecedented influence. Focusing on the largest sector of our economy, the banking industry, the analysis tracks the systematic, purposeful, and bipartisan deregulation of the financial services industry from the Carter Administration thorough the 2008 financial collapse. The claim of business hegemony is examined from an historical/institutional perspective and placed in the context of political science theory, and the conclusion is that while business, represented in this case by the “too big to fail” banks, enjoys significant organizational and structural advantages, business power remains both variable and contingent rather than fixed and hegemonic.

The real estate and mortgage finance (REMF) industry has considerable political power. This power stems from its use of targeted campaign contributions and lobbying efforts, and manifests itself as politically structured markets that extract rents from consumers. REMF has used this power not just to structure markets in its favor, but also to escape the normal regulatory limits on criminal and quasi-criminal behavior. Consumers and regulators alike are unlikely to set limits on the REMF, because both normal collective-action dynamics and deep pockets favor finance. This situation is, however, also self-destructive for REMF, as the subprime mortgage financial crisis shows.

As American business looks toward the future and its role in the policy-making process, it must consider how it is going to be affected by this country’s ongoing demographic changes. As was the case in the 2012 elections, the changing face of American politics has the potential to produce a dramatic impact on the nature of business-government relations. This essay examines the future of business advocacy in the context of America’s emerging demographics in three areas. First, although Republicans have long claimed to be “the party of business,” the turn to the right by the GOP has created significant difficulties for business lobbies. Second, since the political profile of business can be influenced by the ways in which they define corporate social responsibility, analysis turns to the pressures business faces from both their own employees and outside groups to embrace particular values or causes. Finally, the essay addresses business leadership. If business leaders looked like America, would it make any difference in terms of business advocacy?