3155+Frameworks;+models+of+business+and+models+of+policymaking

=Pol Sci 3155 Business & Public Policy, Fall 2008 (Dr. Howard)=

Class notes for Friday Sep 5
Models of business/govt relations || History of American business gov’t relations || Lehne chapter 2 || Lehne Chapter 1 || “Conflict of Interests” by Nicholas Lemann, The New Yorker, August 11 & 18, 2008 “Chapter 1: Pluralism” by Martin Smith, from The State, edited by Colin Hay, Michael Lister, and David Marsh, Palgrave Macmillan, 2006 “The Wrecking Crew: how a gang of right wing con men destroyed Washington and made a killing,” Harper’s Magazine, August 2008 || Seminar sign up? Go to webpage for this site: ||
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 * New students?**
 * Questions, problems?**

What is the proper role of the government, or state, in the economy?

 * Framework
 * Promotional
 * Regulatory
 * Social services

Additional views?
 * The accumulation state?
 * Military industrial complex?

Preliminary Comments on Models…
· When academics talk about or research some real-world phenomenon, they generally begin with a set of preconceived ideas about their subject—they have ‘theories’ about how things work, and these can be expressed as ‘models’ of the some process or phenomenon ==Lehne offers four models of business and government relations—really the first two are views of how government and business relate as regards public policy; the second two are views of the nature of companies themselves==
 * ‘Models’ in this sense are simplified descriptions of the world; they tell us what to expect and where to look for evidence of cause and effect
 * Our models should always be, at some level, open to revision…we’re not ideologues and we revise our views of the world on the basis of evidence
 * Models of Bus and Gov’t: relations “express [scholar’s] understanding of what the rel between gov’t, bus, and non-business groups in the society is or should be…” Lehne 28;
 * Which of the models Lehne offers do students find attractive (in the empirical //is// sense, or the normative //ought// sense? and why?)
 * Pluralism
 * Business dominance
 * Market capitalism
 * Stakeholding

Which of the models Lehne offers do students find attractive (in the empirical //is// sense, or the normative //ought// sense? and why?)

Pluralist and revisionist pluralist view of policy making

 * State/gov’t as neutral arena of public debate—policy as outcome of competing groups, and all interests potentially represented…
 * This has been described as the ‘official ideology’ of capitalist democracy…
 * Groups offer countervailing power
 * Vogel sees that:
 * Business often doesn’t win the big fights
 * Business isn’t united
 * Power open to competition, but participation and equality circumscribed by unequal access to resources and d-making processes…
 * Revisionist pluralists (‘neo-pluralists’) see closed networks and emphasize the privileged position of business.
 * Problems with pluralism?
 * How significant is countervailing power?
 * Access isn’t equal
 * Deemphasizes government bureaucrats, etc.
 * Fails to emphasize role of ideology
 * Where are the ‘potential’ groups?
 * Is consultation real?
 * Structural source of power rather than group sources of power

Business dominance view of policy making

 * The Marxist view of the capitalist state as the servant of the bourgeoisie
 * The direct expression of class needs
 * As arbiter between different capitalist interests…
 * Non-Marxist American analyses…Beard to Domhoff via Lindblom
 * Emphasizes class control or dominance of economy by small group of individuals or companies
 * Beard on the Constitution
 * And Mills (The Power Elite) and later Domhoff (most recently, in State Autonomy or Class Dominance), looking at overlapping networks of individuals on Boards of Directors of Companies, Foundations, Think-tanks, Universities, etc.
 * But the key analysis is: Lindblom’s ‘privileged position of business’
 * In this analysis, Lindblom showed that business is uniquely powerful in 3 ways:
 * It has a key place and influence in the economy: if business loses so do we all…
 * It participates directly in the political process through lobbying
 * It can shape the climate of public opinion…

The Market Capitalism model of business corporations

 * Businesses are and should be above all about making profits for shareholders (owners)
 * Market dominated/laissez faire economics are desirable:
 * -Free entry into/out of markets
 * -Minimal regulation of commerce, labor
 * -Markets set prices, not indiv firms
 * -Price changes promote economic change
 * -Economic adjustment by creative destruction…
 * -Efficient
 * In this system, the proper role of companies is shareholder value maximization
 * Companies attract capital by maximizing returns relative to other investment opportunities…this leads to efficient allocation
 * And Consumers and creditors tend their interests carefully…
 * Political implications
 * -Gov’t regulation is harmful because it interferes with efficiency
 * -Problems with expectations of social justice and provision of public goods…

The Stakeholder model of business corporations
· Companies are the hub of relations among societal groups; companies have a variety of constituencies of whom shareholders are only one: o Shareholders o Creditors o Workers o Customers o Suppliers o Community o Environment? o State? · Companies must balance these interests and what is more they already do balance these…tho’ perhaps we might want greater emphasis on workers and customers, less on shareholders… · Note the distinction between the US idea of stakeholding and the Euro version o In the US, the idea is that companies balance interests of multiple constituencies o In Europe (outside UK) it’s corporatism: organized high level cooperation and codetermination between social partners