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POLS 3470 (45)
Tim Mau (45)
Lecture 2

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University of Guelph
Political Science
POLS 3470
Tim Mau

BUSINESS-GOVERNMENT RELATIONS IN THE US KEY CHARACTERISTICS • MOST CAPITALIST COUNTRY IN WORLD • NO SUCCESSFUL SOCIAL DEMOCRATIC PARTY • WEAK UNIONS – ONLY 12% OF WORKFORCE • LIMITED GOVERNMENT SPENDING • SMALL WELFARE STATE o No national health insurance (historically) 1 in 6 no regular access to health care o Obama (2010) provides subsidies, business encouraged to provide coverage o 19% without – 2016 expected to be 8% (illegal immigrants) • FEW NATIONALIZED INDUSTRIES AMERICAN EXCEPTIONALISM o STRONG SUPPORT FOR CAPITALISM o LIMITED ROLE FOR GOVERNMENT o LOWER GOVERNMENT SPENDING o Why? o Prosperity, high standing of workers o Unique historical development o Developed as a new nation – capitalism dominant form o White males full citizenship as soon as country formed, hard to socialism to form o Some – isn’t as exceptional as it claims to be – historically adopted policies to economic development – CN rail way, tariffs o Individual companies not immune to public criticism o No level of class consciousness o Most capitalist country in the world o Strong support of capitalism by citizens • RELIANCE ON FREE-MARKET PRINCIPLES OVERSTATED • GOVERNMENT ROLE IN PROMOTING THE MARKET: 1) TARIFFS; 2) REGULATION; 3) UNIONS o Government more activist/interventionist o Efforts to promote unionization GLOBALIZATION • FROM PROTECTIONISM TO FREE TRADE • Strong globalization • Shift away from tariffs inhibiting trade among other nations • Strong advocates of free trade • Lead role of developing international institutions – world bank, IMF • Move to other countries – pay workers way less than Canada or US • Capitalize on cheaper labour, few regulations REPRESENTATION OF BUSINESS • CORPORATE LOBBYING o Washington, DC o Secure corporate sales, interest in broader economic policies • CAMPAIGN CONTRIBUTIONS o PAC – political action committees o US 1970s o Amendments to federal election campaign act o Influence players in decisions once elected into public office • CONTRACT LOBBYISTS o Smaller corporations don’t have resources to set up own office o Can pay someone else to do this for them – lobbying firm • TRADE ASSOCIATIONS/PEAK ASSOCIATIONS o Don’t have peak associations in US o Weakness of trade associations – cannot be voice of business • BROAD-BASED BUSINESS ASSOCIATIONS o NATIONAL ASSOCIATION OF MANUFACTURERS (NAM)  Late 19 century, oldest in US  Manufacturers only o US CHAMBER OF COMMERCE  Heavily associated with small business  Overly aligned with right-wing politics o BUSINESS ROUNDTABLE  CEO’s of major corporations in US  Limited to most significant economic players  NAM and chamber too closely aligned with republican politics  Given voice to significant players  7.4 trillion $ of revenue  16 million employees o NATIONAL FEDERATION OF INDEPENDENT BUSINESS  CFIB (Canada)  Represent small/medium businesses in US • FRAGMENTED & COMPETING INTERESTS o Decentralized o Individual enterprises o Difficult for gov to develop close ties with businesses o Why? Business never confronted by any serious challenge like other places in the world o Business interests fragmented o Impossible for gov to provide access to businesses when creating policy o No interest group guaranteed a monopoly FEDERALISM & LOCAL GOVERNMENTS • Enhances structural power of business • Serve to strengthen power of business • Power of exit • Many local governments in intense competition with each other • Municipalities buy investments from around the world • Attraction to community important – taxation, city planning • Can offer structural advantages for business • BUSINESS-GOVERNMENT RELATIONS IN BRITAIN • MARKED BY INSTABILITY • BORROWED FROM DIFFERENT APPROACHES/MODELS • ENVIRONMENT CHANGED POST-1979 o Thaturism o Neo-liberal, neo-consevativism • POST-WAR CONSENSUS o Strive for greater competitiveness o Was leading power in world – economic decline o Still advanced, rich – lost ground in comparison to other countries o Up until l1980 policies had to be acceptable for both unions and business o Average Britain still better off than historically o Affluence flowing more slowly than other countries o GOVERNMENT RESPONSIBLE FOR FULL EMPLOYMENT o GOVERNMENT OWNERSHIP • Key industries o WELFARE STATE • Social safety net • Programs and services o UNION AUTONOMY • Government not to interfere with unions bargaining with businesses • THATCHERISM o Industrial unrest o Inflation, stagflation (unemployment and inflation) o Divide between finance and manufacturing o Openness
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