Capital Strikes as a Corporate Political Strategy: The Structural Power of Business in the Obama Era

The importance of overt levers of business influence on government policy—notably campaign finance and lobbying—has been overemphasized. Using Executive branch financial policymaking during the Obama administration as a case study, this paper shows that those paths of influence are only two of many, and not, in this case, the most important. Drawing upon documents from the Federal Reserve Board and other regulatory agencies, reports from the business press, and policymaker memoirs, the paper places special emphasis on the structural power that large banks and corporations wield by virtue of their control over the flow of capital and its impact on employment levels, business investment, and tax collection. This control, often made visible by a drop in "business confidence," is frequently sufficient to veto or weaken progressive policies, irrespective of more overt channels of influence like campaign finance or lobbying. At other times, economically disruptive disinvestment, combined with overt demands from the business community for government policy changes, constitutes an explicit "capital strike," which then impacts many aspects of the policy process, including political appointments and policy implementation. This analysis has important implications for our understanding of political power in the United States and other capitalist economies.