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Business and Politics: A Critical Appraisal of Political Science*

Published online by Cambridge University Press:  02 September 2013

Robert A. Dahl
Robert A. Dahl
Affiliation:
Yale University
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Extract

For all the talk and all the public curiosity about the relations between business and politics, there is a remarkable dearth of studies on the subject. What is written is more likely to come from the pen of a sociologist, an historian, a lawyer, or an economist than from a political scientist. One would suppose that the role of business, particularly big business, in the political system would be a matter of central concern to political scientists. And so it may be. But those who write about it are men like Adolph Berle, a lawyer, C. Wright Mills, a sociologist, and Robert Brady, an economist; nor can political scientists legitimately lay claim to Peter Drucker, whose professional training and interests in business antedated his academic position as a teacher of political science.

Type
Research Article
Information
American Political Science Review , Volume 53 , Issue 1 , March 1959 , pp. 1 - 34
Copyright
Copyright © American Political Science Association 1959

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Footnotes

*

This paper is one of three prepared at the request of the Ford Foundation Program in Economic Development and Administration. Companion papers are by Paul Lazarsfeld, “Reflections on Business: Consumer and Manager,” and Mason Haire, “Psychological Research Problems Relevant to Business and Industry”; these will appear in the American Journal of Sociology and the Psychological Bulletin, respectively. The aim of the three, covering political science, sociology, and psychology, is to indicate research areas in the social sciences related to problems of business and industry.

References

1 The three periods are his. Some additional articles may be concealed under other headings, such as “politics, parties, and pressure groups.” Waldo, Dwight, Political Science in the United States of America, A Trend Report (UNESCO, Paris, 1956), p. 39 Google Scholar.

2 On this point, as on many others, Charles Merriam had many insights and suggestions; e.g., see his Public and Private Government (New Haven, 1944)Google Scholar. A number of political scientists have examined the internal government of private organizations, though they have not usually paid much attention to the business firm as such. The studies are too numerous to cite here, but of seminal influence are Garceau, O., The Political Life of the A.M.A. (Cambridge, 1941)Google Scholar and Truman, D., The Governmental Process (New York, 1951)Google Scholar, pt. 2. For a recent essay, see McConnell, G., “The Spirit of Private Government,” this Review, Vol. 52 (Sept., 1958), pp. 754–770 Google Scholar.

3 Sovereignty, An Inquiry into the Political Good (Chicago, 1957), p. 25 Google Scholar.

4 E.g., Drucker, P. F., The New Society, the Anatomy of the Industrial Order (New York, 1949), p. 44 Google Scholar and passim. In 1943, Drucker—then teaching political theory at Bennington College—was invited by General Motors “to study and to report on its managerial policies and organization from the standpoint of an outside consultant, in which capacity (he) served for eighteen months.” Out of this experience came The Concept of the Corporation (New York, 1946)Google ScholarPubMed, from which the quotation is taken, at page viii. Most recently, he has written a kind of handbook for executives, The Practise of Management (New York, 1954)Google ScholarPubMed. His first book, The End of Economic Man (London, 1940)Google Scholar was, despite the title, essentially a work in political theory, for it was an analysis of the rise of irrational behavior in the form of totalitarianism.

5 Washington, 1945, pp. 57–8.

6 U. S. Congress, House of Representatives, Report of the Committee Appointed Pursuant to House Resolutions 429 and 504 to Investigate the Concentration of Control of Money and Credit, 62d Congress, 2d Session, Feb. 28, 1913, p. 147.

7 New York, 1927, ch. 4 and passim.

8 The Modern Corporation and Private Property (New York, 1932)Google Scholar.

9 Gordon, op. cit., pp. 71–3, 75–7, 80–1, 91, 99, 105–7, 119, 122, 131–5.

10 Quinn, T. K., Giant Business: Threat to Democracy (New York, 1953) p. 145 Google Scholar.

11 Copeland, M. T. and Towl, A., The Board of Directors and Business Management (Boston 1947), esp. pp. 33–6, 42–3, 52–7, 65–6, and 71–2Google Scholar.

12 “The control system in today's corporations, when it does not lie solely in the directors as in the American Telephone and Telegraph Company, lies in a combination of the directors of a so-called control bloc (a misnomer, incidentally) plus the directors themselves. For practical purposes, therefore, the control or power element in most large corporations rests in its group of directors and it is autonomous—or autonomous if taken to-gether with a control bloc. And inheritance-tax distribution of stock being what it is, the trend is increasingly to management autonomy. This is a self-perpetuating oligarchy.” Economic Power and the Free Society, A Preliminary Discussion of the Corporation (The Fund for the Republic, New York, 1958), p. 10 Google Scholar. Berle's pamphlet is one of three published so far under the auspices of the Fund for the Republic and its panel of consultants—of whom Berle is one—on “The Problems of the Free Society.” The other pamphlets are: Scott Buchanan (also a consultant), The Corporation and the Republic (New York, 1958)Google ScholarPubMed, and Hacker, Andrew, Politics and the Corporation (New York, 1958)Google Scholar.

13 To a remarkable degree, the objectives set out by Tawney, R. H. in The Acquisitive Society (New York, 1920)Google Scholar are attained by the modern corporation. Property owners no longer exert much influence on the conduct of business; responsibility rests upon those by whom the work is conducted; and management has become a profession. But while the forms advocated by Tawney are more nearly here than a Fabian socialist could have thought likely in so short a time, Tawney would doubtless object that the spirit of the acquisitive society remains unchanged. (Cf. particularly his comments on pp. 96–7, and ch. 7, passim.) For Brandeis' view, see Brandeis, L. D., Business—A Profession (Boston, 1914), pp. 1–12 Google Scholar. Cf. also Follett, Mary Parker, Dynamic Administration (New York & London, 1942)Google Scholar.

14 Simon, H. A., Administrative Behavior (New York, 1947)Google Scholar; March, J. G. and Simon, H. A., (with the collaboration of Guetzkow, H.), Organizations (New York, 1958)Google Scholar.

15 These studies are not yet published. However, cf. Cyert, R. M. and March, J. G., “Organizational Structure and Pricing Behavior in an Oligopolistic Market,” American Economic Review, Vol. 45 (March, 1955), pp. 129–39Google Scholar; ibid, “Organizational Factors in the Theory of Oligopoly,” Quarterly Journal of Economics, Vol. 70 (Feb., 1956), pp. 44–64; Cyert, R. M., Simon, H. A. and Trow, D. B., “Observation of a Business Decision,” Journal of Business, Vol. 29 (Oct., 1956), pp. 237–48CrossRefGoogle Scholar.

16 Cf. especially, Kaplan, M., System and Process in International Politics, (New York, 1957)Google Scholar.

17 E.g., Mack, R. W. and Snyder, R. C., “The Analysis of Social Conflict—Toward an Overview and Synthesis,” vol. I (June, 1957), pp. 212–47Google Scholar; Guetzkow, H., “Isolation and Collaboration: A Partial Theory of International Relations,” Vol. I (March, 1957), pp. 48–68 Google Scholar.

18 E.g., Truman, op. cit.; Latham, E., The Group Basis of Politics: A Study in Basing Point Legislation (Ithaca, 1952)Google Scholar; Dahl, R. and Lindblom, C., Politics, Economics and Welfare (New York, 1953)Google Scholar, chs. 12, 13; and 17.

19 The Economics of Collective Action (New York, 1950)Google ScholarPubMed.

20 American Capitalism: The Concept of Countervailing Power (Boston, 1952)Google Scholar.

21 A General Theory of Economic Process (New York, 1955)Google Scholar.

22 Bargaining: The Hidden Hand of Government (RAND, Research memorandum RM -1434-RC, 1955); see also his “Policy Analysis,” American Economic Review, Vol. 48 (June, 1958), pp. 298–312 Google ScholarPubMed.

23 Competition, Oligopoly, and The Theory of Games (Princeton, 1958)Google Scholar. One should also consult Raiffa, H. and Luce, D., Games and Decisions (New York, 1957)Google Scholar, ch. 6, “Two-Person Cooperative Games;” Nash, J. F., “The Bargaining Problem,” Econometrica, Vol. 18 (April, 1950), pp. 155–62CrossRefGoogle Scholar; Pen, J., “A General Theory of Bargaining,” American Economic Review, Vol. 42 (March, 1952)Google Scholar. For a summary and synthesis, see Cartter, Allan, Theory of Wages and Employment (New York, 1959), pp. 24–42 Google Scholar.

24 Schelling, T. C., “An Essay on Bargaining,” American Economic Review, Vol. 46 (June, 1956), pp. 281–306 Google Scholar; “Bargaining, Communication, and Limited War,” Conflict Resolution, Vol. 1 (Mar., 1957), pp. 19–36 CrossRefGoogle Scholar.

25 This view is shared by a number of economists; e.g., Ross, Arthur, in Trade Union Wage Policy (Berkeley, 1956)Google Scholar concludes that unions must be considered essentially as political organizations.

26 E.g., Beard, Miriam, A History of the Businessman (New York, 1938)Google Scholar; Schlesinger, A. M. Sr., Colonial Merchants of the Revolution (New York, 1917)Google Scholar; East, R. A., Business Enterprise in the American Revolutionary Era (New York, 1938)Google Scholar; Cockran, T. C. and Miller, W., The Age of Enterprise (New York, 1942)Google Scholar.

27 As evidence, I would offer Hartz, L., Economic Policy and Democratic Thought: Pennsylvania, 1776–1860 (Cambridge, 1948)CrossRefGoogle Scholar; White, L. D., The Federalists 1789–1801 (New York, 1948)Google Scholar and the three succeeding volumes in his administrative history; Dauer, M. J., The Adams Federalists (Baltimore, 1953)Google Scholar.

28 Vol. 15 (May, 1921), pp. 186–214. Cf. also Follett, M. P., The New State (New York, 1918)Google Scholar and Ellis, E. D., “The Pluralistic State,” this Review, Vol. 14 (August, 1920), pp. 393–407 Google Scholar.

29 Baltimore, 1929. His Public Administration and the Public Interest, which reflects a similar approach, appeared seven years later (New York, 1936)Google ScholarPubMed. Concern with pressure groups and lobbying has remained at a fairly high level. For example, Zeller, B., Pressure Politics in New York (New York, 1937)Google Scholar; McKean, D. D., Pressures on the Legislature of New Jersey (New York, 1938)Google Scholar; Blaisdell, D. C., Economic Power and Political Pressures (T.N. E.C. Monograph No. 26, Washington, 1941)Google Scholar; Unofficial Government: Pressure Groups and Lobbies, Blaisdell, D. C. ed., The Annals, Vol. 319 (Sept., 1958)Google Scholar. That the concern with “interest groups” and “pressures” is no longer an American hobby is indicated by the recent publication of Interest Groups on Four Continents. Ehrmann, H. W., ed. (Pittsburgh, 1958)Google Scholar.

30 Politics, Pressures and the Tariff (New York, 1935)Google Scholar. A more recent analysis of business attitudes on the tariff reveals a striking reversal of opinion since the days of Smoot-Hawley, Cf. Bauer, R. A., Keller, S., and Pool, I. de S., What American Trade Policy Does American Business Want? (Center for International Studies, M.I.T., Cambridge, 1955)Google Scholar. Bauer, and Pool, de S. also have a forthcoming book, American Businessmen and International Trade: Code Booh and Data from a Study on Attitudes and Communications (Glencoe, 1959)Google Scholar.

31 Politics, Parties, and Pressure Groups (New York, 1958, 4th ed.)Google ScholarPubMed, ch. 4.

32 Latham, E., The Group Basis of Politics, A Study in Basing Point Legislation (Ithaca, 1952)Google Scholar. Latham has a forthcoming volume, The Politics of Railroad Coordination, 1933–1936 (Cambridge, 1959)Google Scholar, and an essay, “The Body Politic of the Corporation” (to be published by the Fund for the Republic under the editorship of Edward S. Mason).

33 Garceau, O. and Silverman, C., “A Pressure Group and the Pressured: a Case Report,” this Review, Vol. 48 (September, 1954) pp. 672–91Google Scholar.

34 Among the exceptions: Prothro, J. W., The Dollar Decade, Business Ideas in the 1920's (Baton Rouge, 1954)Google Scholar; Palamountain, J., The Politics of Distribution (Cambridge, 1955)CrossRefGoogle Scholar; Gable, R. W., “NAM: Influential Lobby or Kiss of Death?” The Journal of Politics, Vol. 15 (May 1953)CrossRefGoogle Scholar.

35 New Haven, 1954.

36 V. O. Key, op. cit., 3d ed. (New York, 1952) p. 118.

37 The study by Bauer, Keller, and Pool, supra, n. 30, is an important exception.

36 Cf. “The Businessman and Civil Liberties,” Fortune, May, 1955, pp. 114–15Google ScholarPubMed. These data in Fortune were a part of a larger study, but were omitted from the book, Communism, Conformity, and Civil Liberties, (New York, 1955)Google Scholar.

39 Trow, Martin, Support for McCarthy and Political Tolerance in a New England Town (Mimeo, 1956)Google Scholar, ch. II, “Class and Occupation.”

40 Schattschneider, op. cit., pp. 159 ff.

41 See Dexter, L. A., “Congressmen and the People they Listen To” (Mimeo, 1955)Google Scholar.

42 Long, Norton, “Public Relations of the Bell System,” Public Opinion Quarterly (Oct., 1937) p. 18 Google Scholar.

43 Op. cit., p. 163.

44 On campaign contributions see Overacker, Louise, Presidential Campaign Funds (Boston, 1946)Google Scholar, Money in Elections (New York, 1932)Google ScholarPubMed and numerous articles in this Review; Pollock, J. K., Party Campaign Funds (New York, 1926)Google Scholar; U. S. Senate, 84th Cong., 2d sess., Hearings on 1956 Presidential and Senatorial Campaign Practices (1956); and 1956 General Election Campaigns (1957); Heard, A., Money and Politics (Washington, 1956)Google Scholar; his forthcoming work is entitled The Costs of Democracy. On lobbying, cf. ch. 6 of Key, op. cit., (4th. ed.) and passim.

45 Mills, C. W., The Power Elite (New York, 1956), pp. 23–71 Google Scholar and passim. The idea may have been suggested by Mannheim, Karl, who in his Man and Society in an Age of Reconstruction (London, 1940)Google Scholar spoke of “key positions” in a rather similar sense (pp. 153–4, 194, 202, 231, 363). It is significant that under the influence of the benign political institutions of Great Britain, Mannheim pretty much left these earlier views behind in his Freedom, Power and Democratic Planning (New York, 1950)Google Scholar.

46 Brown, Rlaph, Loyalty and Security (New Haven, 1958)Google Scholar, chs, 5–7, 18.

47 A. A. Berle, Jr., Economic Power and the Free Society, op. cit.

48 Whyte, W. H., The Organization Man (New York, 1956)Google Scholar; Mills, C. Wright, White Collar (New York, 1953)Google Scholar; A, Hacker, op. cit.

49 In the often quoted survey by Woodward and Roper, about a third of the “executives” interviewed were rated as “very active” politically. According to the scoring system used, an individual who voted regularly, discussed politics frequently, and belonged to a political party was rated as “very active.” Cf. Woodward, J. L. and Roper, E., “Political Activity of American Citizens,” this Review, Vol. 44 (Dec. 1950), pp. 872–85Google Scholar. In response to the question “Have you ever written or wired your Congressman or Senator in Washington?,” 67 per cent of the “professional and business' respondents of the American Institute of Public Opinion answered “No.” (AIPO, Sept. 24, 1949).

50 Mathews, D. R., The Social Background of Political Decision-makers (New York, 1954), Table 7, p. 30 Google Scholar. Cf. also his “United States Senators and the Class Structure,” in Political Behavior (Glencoe, 1956), pp. 184–92Google ScholarPubMed.

51 New York, 1957.

52 Kelley, Stanley Jr., Professional Public Relations and Political Power (Baltimore, 1956), pp. 9–12 Google Scholar.

53 Senate Document 92, Part 71 A, 70th Cong., 1st sess., p. 17, quoted in Kelley, pp. 12–13.

54 “The Public Relations Policies of the Bell System” (Ph.D. dissertation, Harvard, 1937)Google Scholar and “Public Relations of the Bell System,” op. cit.

55 Fesler, J. W., The Independence of State Regulatory Agencies (1942)Google Scholar.

56 Lynd, R.S. and Lynd, H. M., Middletown (New York, 1931)Google Scholar; ibid., Middletown in Transition (New York, 1937); Warner, W. L., The Social Life of a Modern Community (New Haven, 1941)Google Scholar; Hollingshead, A., Elmtown's Youth (New York, 1949)Google Scholar; West, J. (Withers, C.), Plainville, U.S.A. (New York, 1945)Google Scholar; Hunter, F., Community Power Structure (Chapel Hill, 1953)Google Scholar.

57 These studies include San Francisco (by G. Belknap), Atlanta (by P. Cleaveland), Boston (by N. Long), Chicago (by E. Banfield), and New Haven (by R. Dahl).

58 C. W. Mills, The Power Elite, op. cit., ch. 2, “Local Society.”

59 Some industrialists do appeal to their brethren to be more active in politics. At the annual meeting of the American Petroleum Institute in Chicago, Ill., in Nov., 1958, L. R. Boulware, vice-president of General Electric (and a former War Production Board official) asked each industrialist to visit and convert fifty families to “a sound way of thinking and to an immunity to demagogues.” At the same meeting, however, G. Romney, president of the American Motors Corporation “counselled big companies to stay out of politics. Instead of duplicating labor's political activities, business should ‘deplore’ them.” The New York Times, Nov. 12, 1958.

60 Cf. Lundborg, L. B., Public Relations in the Local Community (New York, 1950), pp. 68, 76, 78, 94, 206, 210 Google Scholar; and Henderer, F. R., A Comparative Study of the Public Relations Practises in Six Industrial Corporations, (Pittsburgh, 1956), p. 109 Google Scholar. However, see Walker, S. H. and Sklar, P., Business Finds its Voice: Management's Effort to Sell the Business Idea to the Public (New York, 1938)Google Scholar.

61 Under the general title United States Business Performance Abroad, the monographs include Sears, Roebuck De Mexico, S.A. (1953), Casa Grace in Peru (1954), The Philippine American Life Insurance Company (1955), The Creole Petroleum Corporation in Venezuela (1955), The Firestone Operations in Liberia (1956).

62 Houser, T. V., Big Business and Human Values, (New York, 1957) pp. 69–78 Google Scholar.

63 The Theory of Business Enterprise (New York, 1904, 1935), p. 286 Google Scholar.

64 Brady, O. R., Business as a System of Power (New York, 1943)Google Scholar; Burnham, J., The Managerial Revolution (New York, 1941)Google Scholar. And see citations in footnote 56, supra.

65 It is an interesting and perhaps significant fact that the neo-pluralists are mostly political scientists, while the first group is made up mostly of sociologists.

66 Kelley, op. cit., p. 43.

67 “The Great Free Enterprise Campaign,” in Is Anybody Listening? (New York, 1952), p. 7 Google Scholar.

68 Mills, op. cit., p. 315. Cf. also Packard, V., The Hidden Persuaders (New York, 1957)Google Scholar.

69 Lane, R. E., The Regulation of Businessmen, Social Conditions of Government Economic Control (New Haven, 1954), pp. viii–ixGoogle Scholar.

70 Ibid., pp. 19–20, 72, 121–7.

71 The Survey Research Center, Institute for Social Research, University of Michigan, Big Business from the Viewpoint of the Public (Ann Arbor, 1951)Google Scholar.

72 Ibid., pp. 18, 20, 26, 44, 56.

73 It is only fair to point out that the SRC study (a) calls attention to some of these gaps (p. 134) and (b) reports that census-type variables “do not seem to differentiate those seeing or desiring different order positions [i.e., in ranking Big Business with the other four institutions] to any significant degree.” (p. 103).

74 Economic Power and the Free Society, op. cit.

75 Political scientists who teach courses and/or write textbooks on “government regulation of business,” “public control of business enterprise,” etc., might feel, with considerable justification, that they have been given short shrift in this section and indeed in the whole essay. Since I have been largely concerned with gaps in our knowledge, I have not stressed the one area where a good deal of work has been done, namely the operation of legal and administrative regulatory mechanisms. Standard works include Anshen, M. and Wormuth, F. D., Private Enterprise and Public Policy (New York, 1954)Google Scholar; Dimock, M. E. Business and Government (New York, 3d ed., 1957)Google Scholar; Koontz, H. and Gable, R. W., Public Control of Economic Enterprise (New York, 1956)Google Scholar; Smith, H. R., Government and Business (New York, 1958)Google ScholarPubMed; Fainsod, M. and Gordon, L., Government and the American Economy (rev. ed., New York, 1948 Google Scholar; a new edition is under preparation by J. Palamountain); Redford, E. S., Administration of National Economic Control (New York, 9152)Google Scholar, and his Public Administration and Policy Formation (Austin, 1956)Google ScholarPubMed. Cf. also Fainsod, M., “The Study of Government and Economic Life in the United States,” in Contemporary Political Science (Paris, UNESCO, 1950)Google Scholar.

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