Business has too Much Political Power


In the last two decades, corporate world shows tremendous growth by increasing their political power. Corporate involvement in the political process is significant and essential means of multiplying shareholder value, effectiveness of business reputation, and pursuing robust corporate citizenship. Corporate political participation can be a route to safeguard the economic future of the company and also the way of appropriate participation in democratic and free society (Leonnig 2010). It is obligatory for corporations to operate their ability within the legislative and regulatory policies developed at the federal, local and state levels. Decisions of policy makers influence corporations every day. Therefore, they feel it essential to involve actively in the political process. They extend support to associations, groups, and candidates supposed to serve their interests in business strategies. These corporations more often practice their economic power to persuade government, and they believe that this is an essential part of the costs of expanding business. Campaign money for fielding political candidates, soft money for political committees, lobbying in the halls of Congress often facilitate those types of legislation which benefits the corporations. This rapidly increasing private power of companies contradicts the interests of public tremendously much. Therefore, people think “money can buy the best government". The prime focus of this article is to ascertain the extent of corporation’s involvement in acquiring political power, to figure out how far they are successful in satisfying their own interests, and also to analyze, whether their active participation in the political process is beneficial to the country and citizens of the state (Cioffi 2006).

1. The Political Influence of Corporations in USA, Japan and Australia

Involvement of American Business in Politics

American companies are generous donors and powerful actors in the political process by extending their support to candidates, ballot measures, political action committees that seek to influence policymakers, regulators, and election results. Corporations usually offer financial aid to strengthen their long-term objectives, or back up public policies that synchronize with their corporate and business strategy. However, this political spending always necessitates an uncertainty in a political environment. These activities and expenditures can pose substantial risks to their boards and their stakeholders (Edward 1995). Some of the nation’s blue chip and richest corporations, including Goldman Sachs, Wal-Mart, Unilever, Coca-Cola, BMW, Koch Industries AT&T and GM invest billions of dollars each year to boost the careers of state legislators and their safe passage to legislation that satisfies corporate interests ahead of the interests of American citizens (Hall 2001).

The American Legislative Exchange Council, popularly known as ALEC, compromises 2,000 members from state legislators and corporate executives. They sit together and work hand-in-hand to draft “model” bills that reach American citizens ranging from taxes on environmental protection to voting rights. Then they work jointly to seek these bills approved in statehouses across the nation. For example, on recommendations of ALEC, legislators in seven states last year agreed to withdraw legislation from their states designed for fighting global warming. This council also is a significant actor in a national campaign, in toughening voter regulations, so far successful in 19 states.Further, in light of a number of Supreme Court judgments lowering restrictions to political financing, ALEC has inspired states to reject those bills that would require corporations to seek shareholder permission for their political contributions. The funding also has strengthened ALEC’s issue agenda, signified in the group’s model bills. ALEC also promotes public subsidies for private institutes, the improvement of private prisons, restrictions on the voting rights of senior citizens and thousands of college students and unlimited, secret corporate funding on behalf of parties and political candidates (Smith 2011).

2. Involvement of Japan Businesses in Politics

This paper concerns with a few aspects of business government relations in Japan. Many scholars have studied the informal interaction between government officials and leading businessmen, and the operations of the Federation of Economic Organization (Keidanren) and the other key economic organizations to find out what makes business-government collision in Japan supposedly unique. There is no doubt that the Japanese Ministry of International Trade (MITI) used to have a close relationship with Japanese business in the past. It is also true that the traces of Japanese government endorsement of capitalism in the period of Meiji had a powerful influence on the trend of business-government interaction. The Japanese government cannot liberally impose its decisions on the corporate structure. It can inspire but not dictate formal combinations or mergers. Therefore, MITI is little successful to encourage consolidation through implementation of a variety of levers on the corporate world (Culpepper 2011).

One of the key features of peer Japanese politics is the limited participation of corporations in elective politics and appointive government offices. Unfortunately, this differentiation is not often seen today in the government, as present circumstances show the erroneous view that large corporations represent in large numbers. One recent study shows that around one-third of the Japanese House of Representatives consists of corporate executives and that large corporations formally represent in the government with the choice of Cabinet Ministers. By analyzing political nexus data, we discover that corporations account approximately 14 percent of the lower house members in the Liberal Democratic Party (Roscoe 2009). Corporations rank only third in representation in the Liberal Democratic Party Diet delegation, much behind bureaucrats, who constitute around 30 percent of the Diet delegation. One of the most salient features of the Liberal Democratic Party is the degree of its dependency on the corporation’s contribution to financial support. The part of that support is not for public viewing. The Japanese society traditionally has been free of corruption. It is worthy to note that substantial illegal funding of the political parties has become an integral part of the political system. The possibility of forming the strong moderate opposition party with power rules out, as it will weaken the legitimacy of any business and immobilize funds from the LDP. Though, a second moderate party is the demand of time, but the birth of a strong opposition party may help to increase the corporation’s political influence by depriving the LDP financial support, if certain policies are not favorable (Gourevitch 2005).

Furthermore, wealthy businessmen who are not part of the large corporations have created a new style of political financing. Citizens who made fast fortunes in last two decades such as in construction, land development, and real estate form a powerful political force nowadays. They set demands, and government fulfills their demands for some bonuses. They are not a prominent part of the powerful business community, but most of them have close relations with LDP politicians and are the source of “under the table" money that passes hands between politicians and businessmen (Culpepper 2011).

3. Involvement of Australia Businesses in Politics

Recent events in Australia show the deep involvement of corporations dominating at the moment in politics. In a survey of 1,500 Australians held by the Australian Chamber of Commerce, four people out of five agree that corporations influence is continuously increasing and that corporations possess too much power over the government. Meanwhile, one out of four agrees that it is acceptable for corporations to influence the politics. During the tenure of one of the former Prime Ministers, the mining industry underwent a significant increase in taxes with recommended Resource Super Profits Tax. This original RSPT caused an increase of estimated $10 billion in taxes annually; the actual number was more than this amount (Denniss 2010).

Australia witnessed an intensified lobbying and advertising by the mining industry, which created a large mess that had to be cleared before the election. The replacement of the new Prime Minister solved this problem, as the new legislation brought concession and relief for the mining industry and secured their agreement to end the advertising war. Miners were also powerful in scrapping the Carbon Pollution Reduction Scheme. Energy costs count approximately 15 per cent of the mining output value. Any price on carbon poses a substantial threat to profits of the mining companies (Kelly 2008).

The power game of money supported massive advertising and lobbying efforts, replacing an opposition leader who brought political agreement on carbon pricing, and gave relief to the mining industry. The happenings of the CPRS and mining tax have set an alarming precedent in Australia. This shows that businesses with money power can dictate to government and force it to agree on the level of tax they want to pay (Farnsworth 2011).


Scholars are still far from understanding the political process and a role of companies within that process. The mixed complicated and often hidden motives of political actors and corporations create substantial hindrances to studying the influence of corporate political activity. Moreover, it is difficult to foresight the range of business political activity and the scope of corporate activities that create an impact on the political process. process. Nevertheless, increased levels of participation by corporations in politics leading to unlawful campaign financing seek better regulations in business political activity. The Article looks inside the black box and examine the nexus of corporate participation in the political process. This study provides the first hand in-depth analysis of the manner in which businesses develop and use their political capital for a series of policy initiatives. The results give valuable insights with the wide range of activities that affect legislative policymaking, their potential effectiveness in acquiring the corporation’s desired policy, and also in strengthening its market position. In particular, this article proves that corporate political participation is a key component of the corporate strategy (Coulson 1997).

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