The influence of big business on democracy

Big business has an undue influence over government. What is “big business” depends upon the times. At one time big business was the large trading corporations, often benefiting from a state bestowed monopoly, like the East India Company. Other times it was large industrial manufacturing concerns and at other times mining concerns. The “big” in “big business” is a relative term, not a term of science.

Such large businesses have always had the ear of democratic governments and exereted undue influence over governments. Governments seem to think that simply because a business is large and powerful, the government should keep in constant touch with them in order to let the businesses influence government policy. So we saw, in the United Kingdom,  the head of multinational concerns, like BP and the large banks, have a hotline to government.

Government thinks that big business delivers jobs and luxuries (or bread and circuses) and tends to balance the needs of big business with the wishes of the government’s electorate. The electorate may wish one outcome but that outcome may harm big business and then the electorate would be deprived of its bread and circuses and the government would fail. Therefore governments give as much weight to big business as they do to electorates.

It is hardly a democratic process but one that exists in every nation and was always thus.

If big business finds a proposal that costs it money (or potentially does) it will lobby hard, persuade, directly confront and argue with government drawing on huge resources that it can invest in public relations, advertising and similar propaganda tools.

In the fields of big business few businesses are as big as energy companies. They are critical to the democratic processes and also critical to thwarting democracy.

If a large concern believes its profits will be threatened by a particular policy it will seek to change that policy. So, if the head of an energy company telephones the UK’s energy minister, the energy minister will take the call, listen to the point being made, and then consult with advisors about it. If the Chief Executive of a major energy company rings, then the government will want to know what he or she says. It will be important, so the government will perceive, and it will be important but more important to the profits of the big business rather than the welfare of the country. In some cases there is no conflict between the profits of the big business and the welfare of the nation, but in many cases what is in the interest of big business is not necessarily in the interests of the nation, as the recent banking crisis illustrated.

The core desire of every big business is to become bigger; ideally it would wish to be a monopoly, like the old East India Company. Its biggest obstacle in doing so is the government so it keeps its enemy as close as possible and usually manages to get its way with the government.

Although there are few very big businesses employing many people, there are very many small businesses that employ even more people than all the big businesses combined and create more wealth and prosperity for greater numbers. In Europe most people work for small businesses.

However, if a small business feels that its livelihood threatened (not merely its profits but its existence and the existence of the jobs of people working there) what can to do?

The ministers responsible will not meet or talk to the proprietor. They are too concerned with big business to do so. After hours of writing and telephone the proprietor, may, if he or she is lucky, speak to a junior civil servant with of por intellectual quality and no authority to make any change and unable to influence change.

Two years ago I attend a meeting In London organised by the Department then responsible for renewable energy. There were, I think, about twenty of us there, mostly leaders of small businesses, most of who had to take a day off work from their business. They wanted to explain their ideas to the civil servants (no chance of a Minister) conducting the meeting. The senior civil servant there attended the meeting for an hour and then left for a more important engagement. That behaviour speaks for itself.

We as a people elect governments to protect the people and further their interests. The Chief executive has just one vote, the same democratic influence as a bus driver or housewife or worker but the Chief Executive actual influence is more than the votes of a million ordinary people.

The democratic process is bent crooked by the relations between big business and government, even though in the aggregate small businesses are more important than big ones.

One Response

  1. […] Kyriakides defines big business as those corporations that are so large they have undue influence over government. This is certainly a valid definition. Part of the problem I want to address is Big Money in […]

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