Tag Archives: Investment Theory Of Party Competition

Political Power Comes from Organization

I’ve come to realize I have a certain assumption of how I think political systems work that underlies a lot of my opinions so I thought I’d lay it out.  It’s really very simple, but I think it explains a lot.  It can be summed up in one sentence:

Power over social decision-making requires organization.

“Organization” is to be interpreted very broadly here.  It could be a business, a political party, a union, or any other organization.  There are many advantages to organization.  An organization can collect information and distribute it to its members, rather than each individual having to do his own research, collect information from its members to advocate on their behalf (what political science calls issue articulation) and channel money and resources to influence the political process.

If we assume the above paragraph to be true, then applying it reveals some interesting insights.  Who is organized in the US?  Clearly, major corporations have the largest organizations and resources available to them.  While tiny in comparison to the business sector, labor unions organize about 10% of the labor force.  There is a vast array of non-profit organizations advocating many causes, which have some impact, but they have far fewer resources than the business community.  So it should come as no surprise if government policy disproportionately serves the interests of the wealthy.  It can also be seen if we look at the background of three of Obama’s cabinet posts:

Treasury Secretary Tim Geithner: son of VP of Public Relations of Ford Motor Company, began career at Kissinger Associates

Secretary of State Hilary Clinton: Yale Law School and on the board of directors of TCBY (1985-1992), Wal-Mart (1986-1992), and Lafarge (1990-1992)

Attorney General Eric Holder: In addition to Justice Department positions, he was an attorney with Covington and Burling, an international law firm that represents major corporations.

This is not to suggest any conspiracy, but to point out that a) corporations are organized and b) their interests and those of the government tend to align. What about someone like Bernie Sanders, the progressive Senator from Vermont?  Isn’t he proof that politicians don’t have to be supported by big business?  Sanders actually proves the point quite well, since the vast majority of his top campaign donors are labor unions.  That is why he is able to be the most leftist Senator. UMASS Boston Professor Thomas Ferguson has actually done some great work on what he calls the “investment theory of party competition,” outlining how political parties align to those who are organized (mostly business), while the wishes of the electorate play a secondary role.   He in fact shows that one reason the New Deal was successful was due to an alignment of labor union and capital-intensive industry.  An excellent documentary about his ideas is below.