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Free keywords:
business and politics, business interest groups, Joseph A. Schumpeter,
welfare state politics, history of economic ideas
Abstract:
This paper introduces Schumpeter’s views on the relationship between business and
politics and argues that we can discern a distinct Schumpeterian perspective of
business-politics relations. Schumpeter’s views about the pivotal role of
entrepreneurs in economic development attracted substantial interest in economic
sociology and in political economy. His views about the role of entrepreneurs in
politics have so far however hardly been studied. The paper identifies the following
four aspects as central to Schumpeter’s perspective of business-politics relations: (a)
entrepreneurs and corporations drive economic change, (b) entrepreneurs and
corporations are ineffective in defending their political interests and vulnerable to
hostile movements, (c) the resulting divergence of the economic and the political
impact of entrepreneurs and corporations makes capitalism socio-politically instable,
and (d) the relationship of entrepreneurs and corporations to political institutions
and public policies is primarily adaptive, rather than causative.
The paper proposes a two-dimensional typology of business-politics relations that
combines the Schumpeterian focus on adaptation with the Marxian focus on
influence. These two dimensions - adaptation and influence - result in four ideal
types: business-dominated social compromise, imposed social compromise, business
dominance, and political confrontation. Examples from German welfare state history
illustrate these four types. The paper suggests that the Schumpeterian and the
Marxian perspective, while in contrast to each other, may be complementary and
each perspective valid under different socio-political conditions.
