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Business-Managed Democracy

“Business-managed democracies are those in which the political and cultural arrangements are managed in the interests of business”

Sharon Beder

Introduction

Corporations have always had a certain amount of power through their ability to make decisions concerning production and employment. And as they have grown in size and number that economic power has become significant and has been used to exert political influence.

Individual corporations frequently influence the political process on matters of immediate financial interest to themselves through donations and lobbying and the threat of transferring their activities abroad. They also play a major role in setting the political and the public agenda through their use of public relations, lobbying, and funding of third parties such as media, think tanks, and business organizations.

However, corporations have not been content with the degree of economic power and political influence they can wield individually. Since the mid-20th Century their top executives  have conspired to increase their power,  consolidating their political influence to pressure governments to make decisions in their favour, and combining and coordinating their economic resources to mount massive propaganda campaigns aimed at shaping community values, desires and viewpoints.

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Growth of Corporate Propaganda

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Corporate-funded propaganda campaigns have raised free-market beliefs and values above all others, so that economic considerations have priority in all policy making and the political agenda is narrowed to competing ways of furthering business interests. Nowhere has more effort been put into creating a capitalist, free market hegemony than in the US, where business groups have sought to identify every major institution with free enterprise.  The free market “remains the sacred cow of American politics and has become identified with America’s claim to be a model for a universal civilization.”

The weight of corporate propaganda has been augmented by the growth of business networks and coalitions aimed at shaping policy outcomes at the national and international level. Since the 1970s corporate coalitions have moved from defending their economic freedom from the demands and interventions of labour unions and governments, to being far more aggressive in their goals. They now seek to expand their freedom, destroy unions, and take over government responsibilities. Their progressive accomplishment of this has meant that as time goes by democratic power is undermined and thwarted, whilst corporate power grows. book cover

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Alex Carey, author of Taking the Risk out of Democracy, argued that the 20th Century has seen three related developments; “the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.” 

I would argue, from my vantage point at the start of the 21st Century, that the 20th Century saw the progressive eclipse of democratic power by corporate power as the result of the growth of corporate influence, the public-relations orchestrated spread of free market ideology, and the proliferation of business networks and coalitions aimed at exerting political pressure.

Corporate Power equation

Corporate propaganda aimed at subverting democracy has combined public relations techniques developed in the United States with free market ideology originating in 18th Century Europe. The purpose of this propaganda onslaught has been to persuade a majority of people that it is in their interests to eschew their own power as workers and citizens, and forego their democratic power to restrain and regulate business activity.

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Political Mobilisation

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cartoonThe political mobilization of business interests meant that corporations began to act as a class rather than a collection of competing companies with some common interests. The class consciousness of top corporate executives was facilitated by the growth of inter-corporate networks of ownership and interlocking directorates of large corporations, which gave rise to a growing number of corporate executives who occupied positions on the boards of several companies. This inner circle of corporate executives became politically active on behalf of business in general rather than individual companies. They provided the leadership for business coalitions and associations and were employed at the top levels of the largest corporations.

In the past large corporations have been more willing to accept shared power. Until the 1970s many large corporations had tended to take a progressive attitude towards unions, government and social reform for strategic reasons:

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The unalloyed exercise of raw corporate power, they recognize, can generate more problems than it is intended to solve. They are thus more prepared to accept the permanency of labor unions and government regulation, not in principle, but as a  necessary compromise whose alternative could generate adversarial turmoil far more threatening to the future of free enterprise.

This is no longer the case. Although the perceived threats to business of the 1970s have long since faded into history, the political mobilization by large corporations has gained a momentum of its own. Their success has ensured the triumph of free market ideology around the world and it seems that large corporations no longer fear that the exercise of raw power will cause them problems. They no longer accept labour unions, labour laws and government regulation as a necessary compromise. Today they are seeking total power.

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