Business in Politics Modified

7/27/2019 Business in Politics Modified

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Business in Politics

This session:

Explains how corporations, now and in the past,

have exercised political influence.

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The Structure of American

Government

Several basic features of the Constitution shape

the political system:

Sets up a federal system, or a government in

which powers are divided between a national

government and 50 state governments.

Establishes a system ofseparation of powers.

Provides forjudicial review.

The First Amendment protects the right of abusiness to organize and press its agenda on

government.

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A History of Political Dominance by

Business

The Revolutionary War of 1775-1783 that created

the nation was, according to some historians,

fought to free colonial business interests from

smothering British mercantile policies.

The noted historian Charles Beard argued that the

Constitution was an economic document drawn

up and ratified by propertied interests, for their

own benefit.

Yet the record since adoption of the Constitution in1789 is one of virtually unbroken business

ascendancy.

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Laying the Groundwork

The economy was 90 percent agricultural,

so farmers and planters were a major part

of the political elite.

Under the leadership of Secretary of theTreasury Alexander Hamilton the new

government was soon turned toward the

promotion of industry.

As the young nations economy expanded,

so also did the political power of business.

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Ascendance, Corruption, and

Reform In the period following the Civil War, big business

dominated state governments and the federalgovernment in a way never seen before or since.

Through ascendancy in the Republican Party,

corporations had a decisive influence over thenomination and election of a string of pro-businessRepublican presidents from Ulysses S. Grant in1868 to William McKinley in 1900.

In Congress, senators were suborned by businessmoney and corruption was rampant.

Late in the century, farmers tried to reassertagrarian values through the Populist party.

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Ascendance, Corruption, and

Reform (continued) Business adversaries that emerged:

The populist movement

Organized labor

The Anti-Saloon league

After 1900, reforms of the progressive movement curtailedoverweening corporate power.

Big business feared giving women the vote.

The great political reforms of the progressive era were

reactions to corruption in a political system dominated by

business.

While business was more often checked after the turn of the

century, it remained preeminent. Corruption continued.

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Business Falls Back under the New

Deal

Conservative business executives argued that thedepression would correct itself without government action.

After the election of Franklin D. Roosevelt in 1932,corporations fought his efforts to regulate banking andindustry, strengthen labor unions, and enact social security.

Corporate opposition to New Deal measures ran counter topublic sentiment.

Roosevelt was hurt by all the hate and felt that through hismajor New Deal programs, he had saved capitalism in spiteof the capitalists.

One lasting legacy of the era was the philosophy thatgovernment should be used to correct the flaws of capitalismand control the economy so that prosperity would no longerdepend solely on unbridled market forces.

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Postwar Politics and Winds

of Change

In the 1940s, industries patriotic World WarII production record and the subsequentpostwar prosperity quieted lingering publicrestiveness about corporate politicalactivity.

During the 1950s, corporations once againpredominated in a very hospitable politicalenvironment.

During the 1960s and 1970s, nationalpolitics became dominated by a liberalreform agenda.

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The Rise of

Antagonistic Groups During the 1960s, the climate of pressure politics

changed with the rise of new groups focused onconsumer, environmental, taxpayer, civil rights,and other issues, changing the political arena for

business. The rise of groups hostile to business is part of a

broader trend in which new groups of all kinds,including business groups, have been stimulatedby growth of government.

In the 1990s there were an estimated 23,000organized interest groups, roughly 400 percentmore than in the 1950s.

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Diffusion of Power

in Government

A second change in the climate of

politics, besides new groups, has been

the diffusion and decentralization of

power in Washington, D.C. caused by: Reforms in Congress

The decline of political parties

Increased complexity in government

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The Universe of Organized

Business Interests

Literally thousands of groups represent business.

The most prominent groups are peakassociations that represent many differentcompanies and industries.

More than 6,000 trade associations representcompanies grouped by industry.

More than 700 corporations have staffs ofgovernment relations experts in Washington.These Washington offices are set up mainly bybig companies.

Business interests also form coalitions to createbroader support.

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Lobbying

There are two broad areas ofbusiness involvement in politics: Government relations, or lobbying

The electoral process

A lobbyist presents the position of acorporation, interest group, or tradeassociation to a government official.

Lobbyists provide critical intelligenceto lawmakers.

In Washington today, legislators arereceptive to lobbyists.

Lobbyists are only loosely regulated.

Lobbying

Advocating a

position to

government.

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Lobbying Methods

Major lobbying efforts nowresemble political campaigns inthe way they combine a broadrange of methods including:

Direct contact Background lobbying

Public relations

Legal support

Polling Policy analysis

Grassroots work

Grassroots

lobbying

The technique of

generating an

expression ofpublic, or

grassroots,

support for the

position of a

company orlobbyist.

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Paths of Pressure

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Efforts to Limit

Corporate Influence An effort at reform came after the election of 1904,

when Republican Theodore Roosevelt, whocampaigned as a reformer, was embarrassed by hisopponent, Democrat Alton B. Parker, for taking largecash contributions from corporations.

In 1907 progressive reformers pass the Tillman Act,making it a crime for banks and corporations todirectly contribute to candidates in federalelections, and this is still the law today.

After 1907 the spirit of the Tillman Act was quicklyand continuously violated.

Since the Tillman Act did not limit individualcontributions, wealthy donors stepped in.

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The Federal Election Campaign

Act In the years following the Tillman Act, Congress added to the

body of election law although none of these measures

limited the influence of what continued to be the main source

of campaign funding corporations.

Democrats angry at Nixon passed the Federal Election

Campaign Act (FECA) in 1971 to stiffen disclosure

requirements on campaign contributions and expenditures.

In reaction to Watergate, Congress extensively amended the

FECA in 1974.

The intent of the amendments was to limit corporateinfluence; however, over the next 30 years it failed to do so.

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How PACs Work

To start a PAC, a corporation mustset up an account for contributions.

Corporate PACs get their fundsprimarily from contributions by

employees. The money in a PAC is disbursed to

candidates based on decisionsmade by PAC officers, who must becorporate employees.

There are no dollar limits on theoverall amounts that PACs mayraise and spend.

Political action

committee

A political

committee

carrying acompanys

name formed to

make campaign

contributions.

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Soft Money and

Issue Advertising In 1979 Congress amended the FECA to

encourage support for state and local politicalparties by suspending limits and prohibitions oncontributions to them.

These contributions came to be known as softmoney.

Although corporations are barred from contributingto federal campaigns, a series of advisory opinionsby the Federal Election Commission opened thedoor for them to give unlimited soft money

contributions to national party committees. In 1996 the Supreme Court held that soft money

could be used forissue advertising.

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Reform Legislation in 2002

Senators John McCain (R-Arizona) and RussellFeingold (D-Wisconsin) pushed through a bill thatwas enacted as the Bipartisan Campaign Reform

Act of 2002 (BCRA).

National parties are prohibited from raising or spendingsoft money.

Corporations can give unlimited amounts of soft money toadvocacy groups for electioneering activity, withrestrictions during blackout periods.

Contribution limits for individuals are raised.

The main purpose of the new law is to end the useof corporate soft money forissue ads run justbefore elections.

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Testing the New Law

The 2004 election cycle was the first under BCRArules. The new law did not stop the rise in overallspending.

Hard money contributions went way up.

New advocacy groups formed to take in the softmoney that corporations, unions, and individualscould no longer give to parties.

Independent expenditures for and againstcandidates increased.

So far, the new restrictions of the BCRA have workedto cut the flow of unregulated soft money into federalelections, but overall growth of campaign giving andspending has not been slowed.

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Tension Over Corporate

Political Expression

Tensions exists between two strong values inthe American political system, freedom ofspeech and political equality.

Regulation to silence speech, including

corporate speech, goes against the grain of theFirst Amendment.

Restraints on corporate giving have beenpermitted to ensure political equality in elections

and the implied duty to maintain elections free ofcorruption and the appearance of corruption.

Dissenters have argued that corporations havethe right to unlimited speech.

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Concluding Observations

There is significant imbalance of resourcesbetween corporate interests and other interestssuch as poor people, small farmers,environmentalists, and consumer advocates.

Business today is forced to deal with more, andstronger, opposing interests than in the past.

The rise of soft money and refinements in lobbyingmethods create a perception that corporationmoney is undermining the independence ofofficials.

Because of disclosure rules, American politics iscleaner than the politics of most other nations andcleaner than in past eras.

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Political and Government

EnvironmentCase study of India

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Constitution of India

The Constitution of India was adopted by The

Constituent Assembly on 26th November 1949.

It came into effect from 26th Jan. 1950.

Our Constitution contains 395 articles and 10

schedules.

It is divided into 22 parts containing articles and

schedules.

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The most important parts and articles are:

Part II- Containing Articles 5-11 relating to citizenships

Part III- Containing Articles 12-35A relating to Fundamental

Rights

Part IV- Containing Articles 36-51 relating to Directive

Principles of State Policy.

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Part V- Containing Articles 52-152 relating to Union.

Part VI- Containing Articles 153 relating to the state.

Part XVIII- Containing Articles relating to Emergency

Provisions.

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The Preamble to the Indian

Constitution

The Constitution of every country has its own preamble.

The preamble reflects the intention, views and objectives

of the constitution maker.

It also contains the basic values of the country.

It serves as a guide in the interpretation of a Statute(law)

when it is vague.

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Preamble to the Indian

Constitution

The Preamble to the Indian Constitution states that , We

the people of India having solemnly resolved to

constitute India into a Sovereign, Socialist, Secular,

Democratic, Republic, to secure to all its citizen:Justice, social economic and political.

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Preamble to the Indian

Constitution

Liberty of thought, expression,belief, faith, and

worship:

Equality of status and opportunity and to promote

among them all:

Fraternity assuring the dignity of individual andintegrity of the Nation.

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Basic Characteristics of

Indian Constitution

Sovereignty

Democracy

Secularism Socialism

The Parliamentary System

Separation if Powers

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Fundamental Rights

Fundamental Rights enumerated in Part III of the

Constitution are:

1. Right to Equality

2. Right to Freedom

a) Freedom of speech and expression;

b) Freedom to assemble peacefully and without arms;c) Freedom to form association or unions;

d) Freedom to move freely throughout the territory of India;

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Fundamental Rights

e) Freedom to reside and settle in any part of the country;

f) Freedom to practice any profession, or carry on occupation,

Trade or business

3. Right against Exploitation

4. Right to freedom of Religion

5. Cultural and Educational Rights

6. Right to Constitutional Remedies

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Legal Environment in India

With expansion and diversification of

business the legal system of India has

become quiet comprehensive and

complex. Some of the laws are asfollows :

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The Contract Act 1872

The Partnership 1932

The Companies Act 1956

The Industries Act (Development &

Regulation) 1951

The Competition Act 2002

The Income Tax Act 1961

The Consumer Protection Act 1986

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The Foreign Exchange Management

Act, 1999

The Patents Act 1970

The Trade Marks Act 1999

The Environment Protection Act 1986

Indian Sale of Goods Act 1930

Industrial Dispute Act 1947

Minimum Wages Act 1948

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Monopolies & Restrictive Trade PracticeAct 1969

SEBI Act 1992

IT Act 2000

RTI Act 2005

MSMI Development Act 2006

Central Excise Act 1944 Banking Regulation Act 1949

Land Acquisition Act 1894

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Environmental ActsAir Act 1981

The Water Act 1974

Noise Pollution Rules 2000 Hazardous Wastes Management Rules

1989

Foods Food Safety and Standards Act 2006

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Indias Feudal Democracy

To realize its peoples

potential, industrialization

and modernization are

imperativeby Markandey Katju

Times of India,29th Jan 2013

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The Indian Constitution, following the British

model, created a system of parliamentary

democracy. Up to 1947, when India becameindependent, it was still a largely feudal,

agricultural country.

The British policy was to keep us largely un-

industrialised, since an industrial India, with

its cheap labor, could become a powerful rival

to British industry.

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The Indian Constitution was based on

western models. We borrowed parliamentary

democracy and an independent judiciary fromEngland, federalism and the fundamental

rights from the Bill of Rights in the US

Constitution, the Directive Principles of State

Policy from the Irish Constitution etc. Thus we borrowed a modern Constitution

from western models, and transplanted it from

above on our largely backward, feudalsociety.

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Democracy is a feature of an industrial, not

feudal, society. But the intention of our

founding fathers- Pandit Nehru and hiscolleague was that democracy and other

modern principles, such as liberty, equality,

freedom of speech, freedom of religion, liberty

or equality, as well as modern institutionssuch as parliament and independent judiciary

etc would pull our backward, feudal society

into the modern age.

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They set up a heavy industrial base (which

the British had prohibited). Consequently

India became partially industrialised andmade some progress since 1947.

We produced a large pool of engineers,

technicians, scientists, doctors, women got

education, and so on. However, midway

between 1947 and now our democracy and

hijacked by the feudals.

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Caste and religious vote banks, which could

be craftily manipulated by many of our

politicians to serve their selfish ends,emerged and became a normal feature of

elections and other political activity in most

parts of India.

Everyone knows that in most parts of India

people vote on caste and religious lines,

instead of looking at the merits of thecandidate.

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It is for the reason that many persons with

criminal background have often been elected.

Democracy was never meant to be run in thismanner, and this has blocked our progress.

Hence fundamental social and political

changes are now required.

The unfortunate truth is that most of ourpeople are still intellectually very backward,

with faith in casteism, communalism and

superstittions. Honour killing, dowry deaths,female feticide, etc are prevalent in large

parts of India.

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Child malnutrition at 48% is higher than in the

poorest sub-saharan countries of Africal such

as Somalia and Ethiopia. The Arjun Senguptareport states that 77% Indian lives on less

than Rs.25 per day. A UN report estimated

that 2.1 million Indian children die before

reaching the age of five years, that is fourever minute.

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Unemployment is massive in India, with even

postgraduates seeking a peons job.

Healthcare for the masses is abysmal. Poorpeople in India can hardly afford doctors or

medicines, and hence they resort to quacks.

Education is in a shambles.

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Our national aim must be to make India a

modern, powerful, secular, highly

industrialized country, in which all its people(and not just a handful, as is the case today)

get decent lives, and the great social evils like

poverty, malnutrition, unemployment,

skyrocketing prices, lack of healthcare andgood education, etc which are widespread

today in India are abolish forever.

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Backward and feudal ideas like casteism,

communalism and superstitions must be

replaced by modern scientific and rationalthinking. How is this is to be achieved? To my

mind this can be achieved by the struggles of

the people using their creativity.

All patriotic people in India must strive for thisgoal, and join in this great historical task. This

will no doubt call for great sacrifices, and will

probably require a long, painful and sustainedstruggle for about 20 years or so.

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But if we do not do this we will be cursed by

our descendants for having betrayed the

nation. The writer, a former Supreme Court Judge, ischairperson of the Press Council of India

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