The 2008 bailout is often taken as evidence of the domination of the US political system by large financial institutions. In fact, the bailout demonstrated the vulnerability of US banks to government pressure. Large banks in the United States could not defy regulators, because their future income depended on the US market. In Britain, by contrast, one bank succeeded in scuttling the preferred governmental solution of an industry-wide recapitalization, because most of its revenue came from outside the United Kingdom. This (...) was an exercise of structural power, but one that most contemporary scholarship on business power ignores or misclassifies, since it limits structural power to the automatic adjustment of policy to the possibility of disinvestment. We show that structural power can be exercised strategically, that it is distinct from instrumental power based on lobbying, and that it explains consequential variations in bailout design in the United Kingdom, the United States, France, and Germany. (shrink)

The focus of this article is on the Business Council of Australia, an association of the CEOs of the 100 or so largest companies operating in Australia. Since its inception the BCA has been an influential supporter of largely successful efforts to neoliberalize and internationalize the Australian economy. Running in parallel with these developments, however, the BCA has moved from being a “somewhat strong” to a relatively weak policy organization. This article argues these two trends are causally related. Neoliberal-inspired economic (...) restructuring and economic internationalization have weakened the “logic of membership” and the “logic of influence” of the BCA, leading to a process of organizational involution. Furthermore, potential offsets to what I describe as the organizational predations of neoliberalism and internationalization—especially via a willingness or capacity to forge supportive or mutualistic relations with the state—have not been realized. (shrink)

How do we theorize and analyze the structural power of finance when global capitalism itself undergoes constant and profound structural transformation? The literature continues to assume that the source of financial structural power is its unique ability to provide credit to the real economy, playing a crucial role in meeting the investment imperative. But recent research documents that most financial market activities no longer facilitate productive investment and can even be a drag on economic development. If the financial sector's primary (...) role is not to support productive investments, then on what basis does it continue to hold structural power? The contributions to this special issue engage with how decades of financialization have transformed the basis of structural power toward alternative functions that have gone unnoticed in the existing literature. These include household and real estate lending that fuels consumption-led growth, concentration and expansion of financial institutions as tools of geo-economic strategy, financing current account deficits that facilitate global imbalances, and wealth preservation that bolsters inequality. (shrink)

The priorities of French policy regarding genetically modified (GM) food shifted in the late 1990s from aggressive promotion to strict regulation based on precaution and separation of GM food. This paradigmatic policy change coincided with a rapid shift in the dominant meanings of GM food in larger French public discourses. Using data from media coverage, organizational documents, and in-depth interviews, the study examines the relationship between policy developments and GM food’s symbolic transformation. I argue that the interpretive dimension interacted with (...) and co-evolved incrementally with formal policy developments, and that it cannot be understood as epiphenomenal to political processes, or as preceding and propelling a policy change. I identify three mechanisms of symbolic transformation: (1) multiplication of meanings; (2) association with other salient issues; and (3) coupling with national identity (boundary work). Conversely, this symbolic transformation influenced the terms of political debates and viable strategies, influencing policy developments. The study also demonstrates how certain longstanding elements of French political culture shaped, and were changed or reproduced through, these processes. (shrink)

Using a combination of network analysis and descriptive statistics, this study examines the extent to which six important and longstanding policy-oriented nonprofit organizations — foundations, think tanks, and policy-discussion groups — were connected via their directors with the 250 largest corporations in the United States in 1935–1936 and 2010–2011. The results demonstrate that the six nonprofit organizations included in the study were well integrated into corporate networks in both periods, and had an even greater integrative role in 2010–2011 than they (...) did in 1935–1936. This finding supports the hypothesis that policy-oriented nonprofit organizations allow the corporate community to develop proposals, and to reach consensus, on major policy issues. This hypothesis is further supported by an overview of existing studies that illustrate the success of these organizations in shaping policy outcomes on a range of issues. Based on the overall results, the longstanding claim that corporations influence government primarily or solely at the “interest-group” level can be supplemented by the conclusion that policy-oriented nonprofits support a policy-planning process that links the corporate community to government on general issues. In addition, the findings cast doubt on the claim that the corporate community has lost its capacity for policy cohesion in recent decades, due primarily to a “fracturing” caused by a decline in bank centrality. Since general policies have been created within the policy-planning process since at least the mid-1930s, the decline in bank centrality is irrelevant to the corporate community’s ability to formulate general policy proposals. (shrink)

How can finance be durably democratized? In the centers of financial power in both the United States and the United Kingdom, proposals now circulate to give workers and the public more say over how flows of credit are allocated. This article examines five democratization proposals: credit union franchises, public investment banks, sovereign wealth funds, inclusive ownership funds, and bank nationalization. It considers how these plans might activate worker and public engagement in decision making about finance by focusing on three modes (...) of public participation: representative democracy, direct democracy, and deliberative minipublics. It then considers the degree to which democratization plans might be resilient to de-democratization threats from business. It argues that of the five, bank nationalization goes furthest in guarding against de-democratization threats but is still pocked with pitfalls if it relies solely on representative democracy. It argues that two criteria appear necessary for democratically durable alternatives: the active direct participation of workers and citizens and the weakening of businesses’ capacity for democratic retrenchment. (shrink)

Scholars studying the global diffusion of “corporate social responsibility” (CSR) practices and the associated rise of privatized forms of economic governance have tended to shift attention away from the role of corporations in motivating these processes to the one played by nonbusiness forces seeking social control of corporations. We bring corporate power back in by turning the spotlight to the agency of business classes, the business entities capable of pursuing transcorporate, societal-level, macro-political endeavors. Building on a comparative investigation of two (...) of the world’s earliest mass CSR adoptions, in postwar Venezuela and Britain, we argue that business classes responding to anti-capitalist challenges were the original diffusers of CSR practices and, interrelatedly, promoters of CSR-based, privatized forms of regulation and governance. Organized by peak business associations, the purpose of these “business-class CSR mobilizations” was to weaken the state in its relation to corporations and increase the control of business over social trends. We discuss the contribution of our historical perspective and analytical approach to a more complete and balanced picture of the global rise of CSR in late capitalism. (shrink)

Since the 1990s, most Latin American countries have significantly expanded noncontributory pension programs. In explaining this wave of expansion, research has focused on the protagonism of left parties and social movements and on electoral competition, generally disregarding the roles of organized business and conservative policy experts. This article demonstrates, through a detailed analysis of Chile’s 2008 noncontributory pension reform, that conservative economists played active roles in formulating a noncontributory pension policy characterized by moderate, targeted, and “incentive-compatible” benefits and financed by (...) the general budget. The conservative design of the program facilitated broad support from employers and private pension funds, critical for the eventual passage of the reform. The analysis illustrates the need to incorporate business interests into explanations of welfare state reforms in Latin America and the broader Global South, in particular by distinguishing the interests of employers and private providers and by focusing on their interaction with conservative policy experts. (shrink)