1 Political Studies Association 64 th Annual International Conference 14 16 April 2014, The Midland Hotel, Manchester State theory Panel: State unity, authoritarian statism, and business dominance Economic power and the state: Rethinking the privileged position of business Paul Wetherly Leeds Metropolitan University (p.wetherly@leedsmet.ac.uk) Working paper the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie (Marx & Engels) the state.. [is]..a rather special institution, whose main purpose is to defend the predominance in society of a particular class (Miliband, 1969, p.3) governments award to business managers a privileged position in the play of power in policy making (Lindblom, 1980, p.74) the overriding purpose of the state is increasingly to serve corporate interests (Wilks, 2013, p.261) This paper is concerned with theories of corporate political power; that is, theories of the influence or control exercised by corporations over political decisions. In broad terms theories of corporate political power do three things: i. they make claims about the extent of influence or control exercised by corporations over political decisions; ii. they identify the nature of corporate or business interests and political objectives; and, iii. they seek to explain how this influence or control is exerted and sustained or, in other words, to elucidate the causal mechanisms at work. In short, they set out the extent, purposes and mechanisms of corporate political power. There is general agreement that corporations, individually and/or collectively, are powerful political actors that large business corporations possess political power is obvious, and anyone who maintains otherwise is peculiarly blinkered (Wilks, 2013, p.259). Furthermore, that corporations are relatively powerful or privileged, ie powerful compared to other groups or organised interests, is also widely acknowledged (e.g., see Wilks-Heeg, S., Blick, A., and Crone, S., 2012; but see also Coen, Grant & Wilson, 2010). But that vague statement needs more precise formulation.
2 This general agreement could be summarised as the defeat of pluralism, at least in its classical or conventional version as a theory of the fragmentation and dispersal of power in liberal democracies. The defeat of pluralism can be expressed in the general claim that power in liberal democracies is in fact concentrated, and the more specific claim that the concentration of power must be analysed largely (if not exclusively) in terms of corporate political power. Indeed it could be argued that this defeat was effected from within the pluralist tradition by Linblom s analysis of the priviliged position of business (1977). Thus Barrow distinguishes in general terms between egalitarian and ruling class conceptualisations of the power structure according to whether the institutional control of key resources is widely dispersed or concentrated (1993, p.14, op.cit.) However this dichotomy is misleading. It is better conceived as a spectrum since the distribution of a thing can evidently be conceived as more or less dispersed or concentrated (the famous claim in the Communist Manifesto that the bourgeoisie has achieved exclusive political sway is at the extreme of the concentration end of the spectrum, and appears implausible for this reason). In addition, since the distribution of power actually refers to a diverse set of actors, forms of power and issues or decisions there is not a single spectrum, and this means that it might be possible to combine egalitarian and ruling class conceptualisations of power an elite or ruling class model applying to some issues and an egalitarian one to others. For example, political power may be concentrated in the form of corporate influence or control only in relation to the, more or less extensive, range of issues that bear directly upon corporate interests. A related question concerns the possibility of variations in the distribution of power between different countries and time periods, or the distinction between general versus specific (conjunctural) theories of power. In fact this question is really about the level of generality or specificity of theoretical claims. For example, a general theory of the capitalist state from a Marxist perspective may be expressed in Miliband s claim that the state.. [in capitalist society is].. a rather special institution, whose main purpose is to defend the predominance in society of.. [the capitalist] class (Miliband, 1969, p.3). This level of generality/specificity of this statement is that it is intended to be valid for all western or advanced capitalist societies, that is capitalist societies at a specific stage of development, although the grounding of Miliband s analysis in Marx s writings on the state suggests a more general claim about the state in capitalist society and the capitalist class as a ruling class. 1 A more specific version of the claim might be that in contemporary conditions of economic globalisation a closer alignment is realised between the state s main purpose and the interests of the capitalist class. In this view the political power of the capitalist class varies according to specific stages or phases in the development of capitalism. If globalisation has had the effect of increasing corporate or capitalist class political power, this might be interpreted as an epochal shift such that globalised capitalism is seen as a 1 A more general version of this claim (not specific to capitalist society) to which Marx s theory of history is arguably committed (Cohen, 1978 and 1988; Wetherly, 2005) takes something like this form: the state.. [in all class-divided societies is].. a rather special institution, whose main purpose is to defend the predominance in society of.. [the economically dominant] class.
3 step change a new stage of development in which enhanced corporate power is consolidated and permanent. Alternatively, a more specific theory of the connection between capitalism and political power may be made on the basis of distinct varieties or models of capitalism which have developed in different countries (Hall & Soskice, 2001). In this view there is not a single logic of development or sequence of stages that capitalism necessarily goes through. An implication is that capitalist power is an aspect of this variability, but the general theory states that it remains the state s main purpose to serve capitalist interests. Thus a Marxist approach may claim, at the most general level, that it is an irremediable characteristic of capitalism that the state s main purpose is to serve the interests of the capitalist class, but this general claim may be consistent with more concrete (specific) analyses of capitalism in temporal and/or spatial terms - at different stages of development or as manifest in different varieties. However if the general theory is read as making claims about actual capitalist states, such a theory does not appear to admit exceptions to the general rule about the state s main purpose. Thus any variability of capitalist power related to stages of development or varieties of capitalism will be consistent with this general claim. Similarly, while it being the main purpose of the state to serve capitalist interests allows some space for other secondary or subordinate purposes and for some variation ( ups and downs or shifts along the spectrum) of capitalist political power, this can only be within strict limits. What those limits are in precise terms depends on how the rather vague term main purpose (or any other general formulation) is defined, and the level of generality or specificity at which such a claim is made. Pluralism, as an egalitarian theory of the dispersal of power, does not deny the existence of elites in specific areas of life or in relation to specific public policy issues (specific spectrums), but maintains that there is no single elite that is dominant across all issue areas and that elites tend to face effective countervailing power so they do not win all the time in the policy areas they dominate. Ruling class conceptualisations of power argue more than that elites exist in specific areas of life or in relation to specific public policy issues but that there is an overall tendency for power to be exercised by a small and cohesive minority (though this may be consistent with some notion of the circulation or succession of elites). The question for theories of corporate power is whether they are in the pluralist mould (corporations constitute one elite among many whose power is exercised in a narrow issue area and who do not always win) or the ruling class mould (corporations constitute a preeminent elite whose power ranges over a broad area of issues and who normally win). Ralph Miliband s book The State in Capitalist Society: The Analysis of the Western System of Power (1969) made a major contribution to revival of interest in the state and in the Marxist theory of the state. It is ironic that interest in Marxism has receded since then while the central claim of his analysis regarding the political influence of business has come to constitute something of a consensus. For example, on the face of it there is little difference between the claims that the state.. [is]..a rather special institution, whose main purpose is to defend the predominance in society of a particular class (Miliband, 1969, p.3) and that the overriding purpose of the state is increasingly to serve corporate interests (Wilks, 2013,
4 p.261) 2. In each case this purpose is explained as the consequence of the exercise of political power by business, as the political power of the business corporation manifest[s] itself in influence over governments and the policies they pursue (Wilks, 2013, p.23). In other words, the underlying claim is that economic power is translated into political power. However, apart from a few acknowledgements of Marxist arguments in passing, Wilks puts forward a determinedly non-marxist analysis of the political power of the business corporation. Despite this, Wilks does not offer a systematic critique of Marxism, and this makes it interesting to explore more fully the relationship between Wilks s analysis and a Marxist approach. Since Wilks, as we will see, draws on elite theory and critical or neopluralism, this is also relevant to a more general appraisal of the relationship between the three classical traditions of state theory insofar as each has yielded claims regarding the political power of business and its privileged position. We are concerned, then, with the theory of what, as an initial approximation, may be termed the political power of business. Here political power can be defined, following Miliband and Wilks, as influence or control over governments and the policies they pursue 3 and the more specific claim is that this influence or control extends so far as to explain the state s main or overriding purpose. 4 To exercise political power in this sense is essentially 2 However it should be noted that an important difference concerns the level of generality at which these claims are made Miliband referring to advanced capitalist societies in general terms and Wilks referring to the specific model of the New Corporate State. Beyond this contrast, that there is little difference between these statements assumes that serving corporate interests and defending the predominance of a particular class amount to more-or-less the same thing. The particular class being referred to here is of course the capitalist class, and this class is certainly comprised of corporations or, more specifically, those who occupy positions of ownership and control. These are the people who wield economic power, and it is this aspect of economic power that is the common referent of the notion of the predominance of the class and corporate interests. In other words, the main or overriding purpose of the state is seen in terms of sustaining this arrangement of economic power. However, there are deeper issues which may disturb this appearance of agreement. First, ownership and control has been much debated, particularly in terms of managerial versus ownership control and whether this makes a difference to corporate objectives and behaviour, especially as regards profit versus non-profit objectives. This then opens up different conceptualisations of corporate or capitalist class interests. Second, corporate interests may be conceptualised at a range of levels of aggregation from individual corporations, through industries or sectors, to general or collective interests shared by all corporations (eg the shared interest in sustaining existing economic power arrangements). Similarly, political engagement may be undertaken individually or collectively. This raises questions about the balance between individual and collective corporate interests, the existence of divisive conflicts of interest, and the potential for unity and cohesion. Third, the concept of class needs to be defined and might be distinguished from other ways of conceptualising group formation and dynamics such as corporate elite 3 The fuller statement from Wilks is the political power of the business corporation manifest[s] itself in influence over governments and the policies they pursue. This has the same logical structure as the definition of power as the ability of A to get B to do what s/he would not otherwise have done (or not to do what s/he would otherwise have done). A distinction is commonly made between power as an ability or capacity and as the actual exercise of such ability. It can also be argued that the exercise of power links together the effect on B s behaviour (here the policies governments pursue being different to what they would otherwise have been) and the actions of A that have that effect. Thus the definition might be extended to the ability of A to get B to do what s/he would not otherwise have done (or not to do what s/he would otherwise have done) by doing X, where X is conduct likely to have the stated effect on B or observed to have done so. 4 This definition is taken from Wilks, with the addition of or control. In the opening page of The State in Captalist Society Miliband uses similar terms: men.. must.. seek to influence and shape the state s power and purpose, or try and appropriate it altogether. It is for the state s attention, or for it s control, that men compete.. (1969, p.1). Apart from the use of gendered language, these phrases suggest a conception of power in terms of agency. However Miliband does incorporate a structural conception of power in his analysis, and the definition used here - influence or control over governments and the policies they pursue is neutral between agency and structure.
5 what political struggle is all about. The term business is used here initially as more neutral than possible alternatives such as corporate elite or capitalist class since to speak of the political power of business begs the question of the nature of business as an actor or interest, and the answer to that question differentiates between theoretical perspectives. The claims of Miliband and Wilks give the same answer to the question of the extent of the political power of business: serving the interests of business is the main or overriding purpose of the state.. But there are two ways of conceptualising the issue of extent. The quoted statements consider this from the perspective of the state they answer the question how much of what the state does is directed to serving business interests? From the perspective of business the question is how much of the agenda of business interests is served? Conceivably, it could be true both that the state s main purpose is to serve business interests and that it manages to serve only a small part of the agenda of business interests (Position A in Diagram 1). Or, the polar opposite theory, it could be true both that it is only the state s minor purpose to serve business interests and that it manages to serve a large part or all of the agenda of business interests (Position D in Diagram 1). Intermediate positions could also be conceived (Positions B and C in Diagram 1).
6 Diagram 1. Business interests and the purpose of the state State perspective: How much of what the state does is directed to serving business interests? A. Main purpose of state / Business interests partially served C. Minor purpose of state / Business interests partially served B. Main purpose of state / Business interests largely served D. Minor purpose of state / Business interests largely served Business perspective: How much of the agenda of business interests is served? Theories of corporate political power are primarily interested in the second question, the business perspective (the horizontal axis), so that business exercises political power to the extent that the agenda of business interests is served by the state. The measure of business success in securing its interests is the measure of its political power. Whether serving business interests is at the same time the main purpose of the state is not strictly relevant to an assessment of corporate political power. From the perspective of business what matters is whether its interests are served, not whether the state also serves other interests. For this reason it is puzzling that the headline claims of theorists of corporate political power, such as Miliband and Wilks, express the perspective of the state rather than the perspective of business. 5 However, whether it is plausible that the state serves a large part or all of the agenda of business interests without this being, at the same time, its main purpose depends on the conceptualisation of the nature and scope of business interests and political objectives, and on the conceptualisation of the state. As the state is a complex set of institutions with a capacity for policy making and implementation across a wide range of issue areas, potentially affecting all aspects of economic and social life, it is necessary to be cautious 5 The title of Miliband s book is The State in Capitalist Society but it is essentially an analysis of the political power of business or the capitalist class
7 about treating the state as a unified actor with a singular or main purpose. It could be that much of what the state does, and large parts of its institutional complex, has purposes other than serving business interests. This would be more plausible if business interests and political objectives in short, what business wants from government involves a limited set of demands and requirements such as, for example, merely ensuring the basic conditions for markets to function (eg property rights, contract law, competition policy and legal tender). On the other hand, if what business wants from government involves an extensive set of demands and requirements then this may dominate the agenda of government. For example ostensibly non-economic policies such as social policy may be subordinated to the needs of business. The issue here is not just the scope of the business agenda but the existence of conflicts of interest. Serving the needs of business may be the main purpose of the state because these needs or objectives conflict with other interests in society. In this case the measure of corporate political power is not only its success in securing its interests but also its success in excluding conflicting interests. On the other hand, balancing business objectives with other societal interests may be crucial to sustaining the legitimacy of both corporations and the state, which is itself in the interest of business. In other words, the state can be seen as having to perform the two basic functions of accumulation and legitimation (O Connor, 1973; Gough, 1979). A theory of corporate political power needs to identify the nature of business interests (purpose) and explain how this influence or control is exerted, particularly by showing the causal mechanisms through which economic power is translated into political power (mechanisms). This is the common endeavour, from their differing theoretical perspectives, of Miliband, Lindblom and Wilks. Wilks identifies five broad theoretical perspectives on business power in the shape of pluralism, partnership, structuralism, comparison and internationalisation (2013, p.24) from which he distils his own approach. This is an idiosyncratic list in that these perspectives are concerned with different types of questions and are thus not strictly comparable, and in that it appears to omit some classical perspectives on the state which bear directly on business power, notably Marxism and elitism. 6 The international perspective concerns the implications of the multi-national form of the corporation for understanding the political power of business and, specifically, whether revised concepts and theoretical arguments are required. In this sense the international perspective is not comparable to the pluralist, partnership and structuralist perspectives but poses the question whether, say, the structuralist perspective can be used to analyse the political power of corporations in the context of economic globalisation and the dominance of large corporations which are characteristically multi-national in their scale of operations. Broadly, in what ways and to what extent does economic globalisation lead to a power shift between corporations and 6 Moran (2009) identifies pluralist, power elite and structuralist approaches. This is similar insofar as Wilks s partnership approach is comparable to the power elite approach. Wilson (2003) distinguishes between orthodox pluralist, revisionist pluralist and structuralist approaches. Fuchs (2007, pp.45-63) distinguishes between perspectives on business s influence on politics (including pluralism, (neo)corporatism, public choice perspective) and underlying conceptualisations of power distinguishing between instrumentalist, structuralist and discursive approaches. These forms of power are then related by Fuchs to specific mechanisms or processes of influence. In effect this approach unpacks the notion of mechanisms used here into abstract forms of power and the more concrete channels of influence in which they are manifest. For example, instrumental power can be manifested in lobbying or campaign funding..
8 states? The two related aspects of this concern the implications of economic globalisation for the sovereignty and/or autonomy of nation-states as both home and host nations, and the influence of corporate political power in relation to developing processes of global governance. For example the bargaining power of the multi-national corporation, conceived as a political actor, may be analysed in relation to the autonomous decisions of nationstates (eg domestic economic policy or the support of home nations for their MNCs operating overseas) and in relation to global governance involving a range of states and non-state actors. In these two interdependent arenas corporations may exert influence over decisions through instrumental power but the extent of influence and the precise repertoire of actions through which instrumental power is manifest may differ. For example, there is the question of whether the process of formation of a national capitalist class or corporate elite can be replicated at trans-national level, and whether class or elite interests are simply transferred from the national to the global level (Wilks, 2013; Sklair, 2001). Similarly, the comparative perspective is not comparable to the pluralist, partnership and structuralist perspectives but poses the question of the level of generality or specificity of theories of corporate power. In other words, in contrast with the generalising ambition to analyse the Western System of Power (ie the system of power in all advanced capitalist societies), the comparative perspective proposes to contextualise corporate power.. in varying national settings (Wilks, 2013, p.29). 7 More specifically, this means contextualising corporate power in relation to a limited range of models or varieties of capitalism. For example, Hall and Soskice distinguish between liberal and coordinated market economies (LME and CME) (2001, cited in Wilks, 2013, p.30). Thus, the comparative perspective poses the question whether the pluralist, partnership or structuralist perspectives can be used to equally good effect to analyse the political power of corporations in both varieties of capitalism or whether, say, the pluralist perspective needs to be revised to take account of relevant specific features of each variety. According to Wilks (2013, p.30), the varieties of capitalism perspective underlines the common sense view that corporate power varies according to context. However the key questions are in what ways and how much it varies does the extent of influence vary (eg is corporate power more balanced in one variety?), or just the specific repertoire of actions through which corporate power is manifest? 8 Again, it is worth emphasising that the issue is not general versus specific theory, but understanding what claims about corporate power can be supported at different levels of generality/specificity at the levels of the Western system of power, the variety of capitalism, or specific national settings within each variety (and ups and downs of corporate power through time at each level). Putting the international and comparative perspectives to one side leaves us with the pluralist, partnership and structuralist perspectives as the main theoretical options for analysing corporate political power. This enumeration apparently omits the Marxist and elitist perspectives. However, the partnership perspective is essentially a variant of elitism, and we will return to Wilks s criticisms of Marxism. Wilks adopts and advocates an eclectic 7 The international perspective and comparative perspective are obviously related, and the central question is whether the international perspective leads to the conclusion that differences between national settings are being eroded by corporate power exerting the same pressures and demands on all states, eg leading to convergence on a competition state model (Cerny, 2000) 8 For example, Wilks argues that the structuralist perspectie is more relevant to the Anglo-Saxon (LME) model
9 (2013, p.40) or horses for courses approach. In this view it is recognised that business power is variable and conjunctural, it varies between countries, industrial sectors, policy arenas and the conjunctures of issues, forces and timing (2013, p.40). This means that none of the perspectives on its own (or indeed any combination / synthesis of the perspectives) can furnish a general theory of corporate power: [t]here is no single theoretical perspective that provides an adequate understanding of the corporation as a political actor (Wilks, 2013, p.40). 9 Rather, the perspectives.. offer a repertoire of insights and concepts which can be used in a variety of settings to analyse corporate power (2013, p.32), so that in some settings pluralist concepts may appear more important, in others structural determinants may appear decisive (2013, p.32). However Wilks is somewhat equivocal on both the eclecticism and the need for conjunctural analysis. Clearly gross generalisations about corporate political power are unhelpful, such as the idea that corporations.. control the state regardless of whichever government is in office (Wilks, 2013, p.24). Yet, at the same time, [t]his is not to argue that generalisations are impossible or that conclusions cannot be drawn [Rather] there are patterns in the operation of corporate power which allow us to evaluate its effects and, to some extent, to predict outcomes (2013, p.40). But the distinction between gross generalisation (bad) and generalisation (good) is difficult to make sense of (and is not clarified by Wilks) and probably not helpful. Rather generalisation is a desirable aspiration in social theory, and it is valuable for explanatory statements or claims to be as general as possible. A specific or particular claim (such as that corporations control the state in a particular setting defined in terms of country, time and party in power) always invites the question whether it is a unique case or an instance of a pattern such that generalisation is permissible. The question is what statements or claims can be supported at different levels of generality, not what level of generality is helpful. Thus the claim that corporations.. control the state regardless of whichever government is in office is arguably an example of such a supportable claim. 10 9 This statement evidently depends on what is meant by a perspective and what kind of understanding of the corporation as a political actor is sought, ie what questions about corporate political power we are seeking to answer. Again the distinction between the perspective of business and the perspective of the state is relevant here. The former focuses only on those issues which constitute the business agenda, based on an understanding of corporate interests, and in which corporations engage as political actors in the play of power. It is not concerned with all those issues outside of the business agenda, which are the concern of the perspective of the state. Thus it is necessary to clarify explanatory ambitions. Wilks s argument against reliance on a single theoretical perspective seems to be an argument against single factor explanations in favour of recognition of multiple causal factors, allied to the claim that these causal factors are likely to play out differently in different settings, hence the need for conjunctural analysis. It can be argued against this that a theoretical perspective is not the same thing as a single factor explanation but can incorporate a combination of causal mechanisms or chains, as can be seen in the work of Miliband and Lindblom. Indeed developing a perspective of this sort is precisely the aim of Wilks s own work. Whether it is then possible to account for any phenomenon fully using a single perspective defined in this way depends on what it is we are trying to explain and so what counts as an adequate understanding. Wilks seems to suggest that the answer lies in narrowing the focus to a specific setting, thus allowing the precise combination of causal factors to be elucidated in each case a bit more pluralism here, a bit more structuralism there. In this way, contra Wilks, a single theoretical perspective can provide an adequate understanding of the corporation as a political actor. But an adequate understanding can also be attained at a more general level, for example at the general level of variety of capitalism as well as at the level of a more specific setting such as a particular country in relation to a specific policy issue in a determinate period. We might be able to say that the mechanisms of corporate political influence in variety of capitalism A are X, Y and Z, and that in this country at this time mechanism Y was the principal factor. 10 It is such a claim that Miliband (1969) defends, and Lindblom s claim that business enjoys a privileged position in policy-making is not dependent on which government is in office
10 In fact Wilks s own claim that the overriding purpose of the state is increasingly to serve corporate interests (2013, p.261) does not have regard for whichever government is in office. It relates specifically to the UK which has undergone a transformation involving the completion of a new political settlement in the form of the New Corporate State (2013, p.261). This transformation has been effected under a succession of governments from the 1980s, commenced by Thatcherism and consolidated by New Labour. The implication is that so long as the New Corporate State (NCS) remains in place the state will continue to serve corporate interests, whoever is in power. The UK is analysed as an exemplar of the NCS, but the argument is not really about the UK but about this form of state. The generalisation is that the state always serves corporate interests when the NCS form prevails. Wilks s eclecticism involves a somewhat equivocal view of pluralism, a strong emphasis on elitism, and limited attempt to forge a theoretical synthesis. Wilks sees pluralism, the mainstream perspective on power in liberal democracy, as deeply complacent (p.24), increasingly misleading (p.105) and ultimately as a fairy tale (p.255). Yet Wilks also seeks to incorporate pluralism within a theoretically eclectic approach (p.40), and also suggests a merger between pluralist and elite perspectives. Because pluralism is misleading, the eclectic approach places more emphasis on the structuralism and the partnership theories (p.41). However the way the three perspectives can be combined in a particular setting is alluded to in relation to the UK since 1990. Here theories of structural dependence appear particularly revealing.. But corporations clearly also used their increasing structural authority to their own advantage and exploited pluralist avenues of lobbying. In parallel they also worked to popularise ideas of partnership.. (Wilks, 2013, p.32). However, beyond this brief statement Wilks does not attempt systematically to develop an eclectic approach in theoretical terms. In this statement it can be argued that Wilks elides pluralist avenues of lobbying with a pluralist perspective. But pluralist avenues of lobbying is a way of referring to instrumental forms of power (including not just lobbying in a narrow sense but also donations to political parties, campaign funding, public relations, funding of think tanks, and so-on) which are not the preserve of pluralist theory. The pluralist perspective emphasises these forms of instrumental power and claims that, through them, all interests are articulated and taken into account. Critics of pluralism do not discount such avenues but reject the claim that power is dispersed through them, and point to other forms of power. Thus lobbying is a characteristically but not exclusively pluralist avenue, so incorporating it in an eclectic approach does not amount to incorporating the pluralist perspective. Indeed there is nothing particularly eclectic about such an approach. For example, Miliband s Marxist theory of the state in capitalist society criticises and rejects pluralist theory largely in its own terms, through an analysis of such instrumental forms of power characterised as imperfect competition in which business enjoys a massive superiority outside the state system.. in terms of the immensely stronger pressures which, as compared with labour and any other interest, it is able to exercise in the pursuit of its purposes (1969, p.146 and see pp.146-178). 11 11 Another way of expressing this distinction between pluralist avenues, and the pluralist perspective is between the evident plurality of interest groups and pluralism as a theory of dispersed power. What is wrong with pluralist-democratic theory is not its insistence on the fact of competition but its claim.. that the major organised interests.. compete on more or less equal terms (Miliband, 1969, p.146). Similarly, Lindblom s analysis of the privileged position of business incorporates analysis of the disproportionate influence of
11 Wilks s actual criticisms of the pluralist perspective echo in part those of Miliband. Thus pluralism regard[s] business as a participant in a more or less pluralist system.. [in which].. business has a powerful voice.. but other groups in society are also highly influential. While politicians and the state apparatus are receptive to business pressures they must also balance, negotiate, listen to other interests and business does not always get its own way (p.105). Whereas, in reality, corporate goals.. dominate the policy agenda [and] [o]ther interests are marginalised (p.255). In addition, though, Wilks, claims that pluralism is potentially misleading (p.41) because the role of corporations in contributing to.. [good governance] goals is.. poorly understood (p.41). This criticism assumes that pluralist theory conceptualises corporate goals narrowly in terms of self-interest, and Wilks also sees this as a criticism of Marxism which conceptualises the corporation in terms of class struggle and exploitation (p.35). In contrast, Wilks claims that, though corporations do of course pursue self-interested goals, they also share political goals that are of the essence of good government such as stability, prosperity, economic freedom, good public services and a sustainable environment (p.41). This claim ultimately informs a strategy of political reform which will make corporations accountable and harness their potential for meeting societal ends rather than their own (p.261). However this needs to be assessed in relation to a theory of corporate or capitalist interests, and the relationship between these interests and a conceptualisation of the essence of good government. But it is a third criticism of pluralism that is given most weight by Wilks, and this concerns the how of corporate power rather than its extent or purpose. For although, as we have seen, Wilks allows a role for pluralist avenues of lobbying in his eclectic approach, his main criticism of the pluralist perspective is precisely that it defaults to the study of business as a pressure group, or multitude of pressure groups, engaged in a variety of ways with lobbying governmental bodies.. (2013, p.105). This conceptualisation of business as a pressure group is, for Wilks, increasingly misleading because it is no longer the case that corporations rely on lobbying government from the outside and governments are essentially autonomous from corporations. Rather the pluralist perspective needs to be supplemented, and largely superceded, by a governing institution persective in recognition of the fact that in many areas corporations have.. become partners in policy making. In other words, corporations have entered government, creating a mode of governance with policy making and implementation undertaken jointly by one or a few corporations together with the specialised sections of government ministries or agencies (2013, p.109). Thus pluralism is anachronistic it emphasises a mode of corporate power that still operates but is of declining significance, and so it can only be a minor theme within an eclectic approach. Hence Wilks places more emphasis on partnership and structuralism. In fact the partnership or governing institution perspective is the dominant strain within Wilks s theory, and this is elaborated explicitly as a form of elitist perspective. The theory revolves around the three concepts of the governing institution, the corporate elite and the New Corporate State (NCS) (2013, p.260). These concepts are closely inter-related. The NCS is a form of state in which corporations share in government there is partnership or business as a political actor through the electoral process and interest group activity, as well as control without trying through structural dependence (Lindblom, 1977 and 1980; Lindblom & Woodhouse, 1993). This is referred to by Wilks briefly (2013, p.28)
12 shared power (p.26) - and is seen by Wilks as a new political settlement, in contrast with the postwar settlement in which corporate political power was more balanced or constrained. Not all corporations are powerful political actors, and the main focus is therefore on an elite of large (especially multinational) corporations, the corporate elite, which provid[es] the foundation for a managerial elite (p.33). 12 In contrast with the pluralist idea that business comprises a multitude of pressure groups, Wilks sees this elite as cohesive. These corporations are governing institutions in virtue of partnership with the political elite. More specifically, Wilks highlights the role of professionalised leaderships constituted by career politicians which control the political parties. 13 This is seen by Wilks as a partnership of equals (p.100), the point being that the corporate elite is by no means subordinate to the political elite. Thus the elitist approach assumes that those making up the [corporate] elite become a governing elite.. they have dominating influence over public policy and render the democratic process ineffectual in establishing real control over government (p.33). It is worth noting, again, that although Wilks characterises the NCS as a new political settlement, the claim that corporations have entered or colonised government and become governing institutions is not in itself new. It is, of course, an essential claim of the neocorporatist perspective, though a clear contrast with the NCS is the shift from tri-partism to a partnership model excluding labour. Similar claims are also made in the work of Miliband and of Lindblom. Thus Miliband argued that large scale business enjoys a decisive and permanent advantage.. inside the state system, which is supplemented by its massive superiority outside the state system through imperfect competition (1969, p.146). Thus there is a similar theoretical and empirical mix of inside and outside mechanisms. Miliband refers to the entry of businessmen in the state system (1969, p.55), including in government and their growing colonisation of the upper reaches of the administrative part of the system (p.57). This colonisation has taken on new forms as analysed by Wilks (eg whereas Miliband refers to the management and control of nationalised industries, the new form involves control of regulators of privatised companies), and is now more extensive (eg Miliband notes that businessmen constitute a relatively small minority of the state elite as a whole (p.59)), but is not in itself new. Wilks places emphasis on recent ideological convergence between the main political parties and identifies the political elite in terms of party leaderships, supporting the claim that the NCS is a new political settlement or form of state. Yet the ideological convergence between the main parties, led by bourgeois politicians was already emphasised by Miliband. In addition, whereas Wilks implies that democratic politicians are the key actors in charge of the state, Miliband places more emphasis on the state system as a whole and the constraints placed on governments the fact that the government does speak in the name of the state and is formally invested with state power, does not mean that it effectively controls that power (1969, p.50). Wilks characterises the pre-thatcher civil service as part of the Establishment, distinct from the business elite and unsympathetic to business interests. Again, this serves to highlight the 12 The elite of business corporations..is easy to define..by size (turnover, employees or market capitalisation) (Wilks, 2013, p.37). Large corporations operating in oligopolistic markets are able to devorte resources to political goals because market power entails discretion or room for manoeuvre. 13 In place of alliances with the Establishment the political elite negotiated the Settlement of the New Corporate State which rested on a partnership between the corporate elite and the party-political elite which dominates the cadre political parties (Wilks, 2013, p.99)
13 novelty of the NCS, with civil service reform being a key element in its establishment. However in Miliband s work we find empirical evidence to support the claim that the senior civil service, and other command positions in the state system (ie the state elite) was already, on account of its social origin, education and class situation (p.66), in tune with business interests through its general outlook, ideological dispositions and political bias (p.68). In later work Miliband characterised the relationship between corporate power and state power as a partnership constituting a power elite bound by a high degree of cohesion (Miliband, 1991, p.32; also see Miliband, 1983). Though Wilks argues that the pluralist default conceptualisation of business as a pressure group needs to be replaced with a partnership model which is a form of the elitist perspective, there is another way in which his eclectic approach incorporates a pluralist dimension. As we saw earlier, elitist and pluralist models of power can be seen as ends of a spectrum or continuum rather than as presenting a stark dichotomy. Movement along the continuum may be conceived in this way: a theory is more pluralist to the extent that power is more dispersed among more actors. 14 In this sense Wilks argues that elite theory.. merges with pluralist positions in the plausible concept of a plurality of elites who compete for control of government and allow some popular accountability (2013, p.34). Alongside the previously mentioned suggestion that elites in general, and the corporate elite specifically, may pursue goals that are in the interest of society as well as self-interested goals, this plurality of elites is the saving grace of elite domination of society.. The idea of a plurality of elites giving rise to a circulation of elites provides the reassurance of a degree of accountability and popular influence. Economic elites may be powerful but they are constrained by constitutional settlements enforced by the state, and competitor elites remain influential (Wilks, 2013, p.65). There are three related aspects to Wilks s argument here that need to be considered: that elites are not purely self-interested but may sometimes pursue societal interests for their own sake; that competition between a plurality of elites induces some measure of responsiveness to other interests in society in order to win control of government (particularly in conditions of liberal democracy); and, that corporate power is constrained by the nature of the constitutional settlement (again, particularly in conditions of liberal democracy). It could be argued that Wilks is stating the obvious in that a variant of elite theory that rejected these points, and maintained that a singular cohesive elite rules purely in its own self-interest and without any meaningful constitutional constraints on its power, would be unrealistic. For example, these points can all be found in the work of Miliband and in Marxist state theory more generally. Thus it is possible to argue that there is some overlap between capitalist class interests the common affairs of the whole bourgeoisie and societal needs, or between the needs of capital and the needs of labour, and that corporations can adopt a stakeholder perspective in relation to some systemic risks or threats (eg Gough, 2000). The Marxist argument is not that there is a straightforward translation of economic power into political power. There could not be such a straightforward translation due to: competing fractions of capital; the existence of other classes, social forces and interests; and, the institutional form of the state, which is not a simple instrument controlled by the capitalist class. According to Miliband, the power 14 More actors in itself simply equates to more plurality; power being more dispersed among these actors is necessary for more pluralism
14 wielded by the corporate elite is not absolute, undivided or unconstrained it is obviously the case that other forces in society do exercise a certain amount of influence and power, and do sometimes place corporate power on the defensive. [And the power of the state] has often been used for purposes and policies which were not only pursued without reference to the capitalist class, but also at times against the wishes of many parts of that class, or even the whole of it (1991, pp. 29 & 31). So the question is what difference do these points make to the exercise of corporate political power? To what extent does the theory become more pluralist as a consequence of these factors? According to Wilks s argument, the transition to the New Corporate State in the UK since the 1980s has moved things in a less pluralist direction, away from a postwar settlement in which corporate power was more balanced and constrained. In this transition the circulation of elites has consisted of a shift of power from a traditional Establishment to the corporate elite: The old Establishment elites declined, to be replaced or overshadowed by an empowered corporate and financial elite (Wilks, 2013, p.70). The broad analysis of the shift from a postwar settlement to a post-thatcher settlement is persuasive and consistent with a widely accepted framing of this period in terms of a shift from a social democratic consensus to neoliberalism. And the claim that this transition has to be understood as a dramatic enhancement of corporate power (rather than as a shift to a free market economy) is also persuasive. However, Wilks s analysis, and particularly the circulation of elites framework, is open to a number of criticisms. The plurality of elites turns out to be rather limited, with little scope for circulation. Wilks identifies the following four elites: a traditional elite or Establishment (comprised of several elements: monarchy, aristocracy, the City, Church of England, military, constitutional elite of the civil service and judiciary); business elite; union elites; and a cultural and arts-based elite (pp.66-7). The cultural and arts-based elite seems to be rather marginal, and does not play a central role in either the postwar settlement (seen as a compromise between the Establishment on one side and the unions and labour on the other) or in the shift to the post Thatcher settlement (seen as a shift from the Establishment to the corporate elite and, by implication, a defeat for the unions and labour). By working within the confines of a circulation of elites framework Wilks can only acknowledge the elite of unions and this precludes awider consideration of the role of class forces and bottom-up pressure in the postwar settlement. The distinction between the Establishment and the business elite, and therefore of a shift from the former to the latter is questionable. In particular, according to Wilks the former includes the City and elements of the state elite (the constitutional elite the civil service and judiciary). But this is a contentious assignment and arguably understates the extent to which these elements had already been transformed by the postwar period. The inclusion of the City in the traditional elites seems questionable, and indeed Wilks identifies a corporate and financial elite as empowered by the post-thatcher settlement. According to Miliband elements of the state elite the civil service and judiciary - were not semi-detached from the business elite but shared the same ideological dispositions as members of the capitalist class in virtue of common social origins and were thus part of the apparatus of capitalist political power.