Who Influences Who?

Mutual interactions between politicians and businessmen in today’s world

By Luis G. Marquez, Staff Writer

Throughout the capitalist world, we have constantly seen how close politicians are with businessmen.  Many events have sprung up that show many examples where political policies have affected matters of business. Yet we have also seen the opposite, in which businesses have affected the politics of a nation, either in an election or in policy making. The question that arises then is who influences who?

Politics influencing Business

When it comes to politics, one can obviously see that such policies like corporate tax, privatization, free-trade policies, the opening of a business, the promotion of social welfare and the nationalization of industries can affect the nature of business, whether in a positive or negative way. However, this is only scratching the surface and does not explain how politics is able to influence business.

The issues mentioned above come not from the current government of a nation; rather from the political environment under which that government is subjected to. The regulation of business and the way business ought to conduct itself when making profits depends largely on the political climate.

In other words, it is not simply about increasing or decreasing corporate tax, but what is the purpose of it.  Why increase or decrease it? Why implement free-trade policies? What is the reason?

Each country’s political decisions and policies vary and understanding the reasons behind those decisions and policies will undoubtedly help one to understand the way business is done in that particular country. It would be unethical and incompetent for a businessman to do business in a country if he knows very little of the policies and regulations of that nation.

If few or any regulations or laws were established over business matters, these companies or other for-profit organizations can behave in ways that are deemed to be either unethical or just down-right wrong.  For example, politics has played an important role in the introduction of non-discriminatory policies in Canada and in the United States. Governments of both nations have worked hard in preventing discriminatory practices from continuing in the workplaces.

Had there been little or no regulations against discrimination, businesses could hire or terminate employees for any reason. Governmental policies have obliged businesses to treat their employees well through respect and provide appropriate payment for their work. These examples allow us to see just how influential politics is over business matters. However, can the reverse happen?

Business influencing Politics

To say that business has no influence whatsoever over political matters would be naïve. The business and political circles have always been composed of very influential individuals.

It is now common practice for a politician to sit in the Board of Directors of a major company and act as their consultant. These influential people of major corporations have the monetary means to influence the political sphere of a nation.

There have been several situations in which businessmen have swayed policies to their benefits. In an article published for the University of California, Santa Cruz, it stated that businesses get involved on issues that have high stakes for them and for the public. In this case, businesses have influence over environmental politics, often with disastrous consequences for the environment.

[pullquote]“It isn’t fair to say they’ve been involved in everything and are single-handedly responsible for our lack of progress. They have limited resources and choose their fights accordingly,” said author Sheldon Kamieniecki, a professor of politics and Dean of the Division of Social Sciences at the University of California, Santa Cruz.[/pullquote]

What this illustrates is that businesses pick their targets carefully and do whatever they can to influence the political outcome of an issue that greatly concerns them.

Another example is the concern of corporate media takeover. In an article originally published by rabble.ca but also shown in the Canadian Dimension, there is concern for a breakthrough for the independent media from corporate or right-wing bias  As a result, many independent media outlets have been set up as non-profit entities, with diverse sources of income.  The fear is that the loss of an independent media is the loss of freedom of speech and expression, which can have catastrophic consequences.

Conclusion

[pullquote]This matter of influence is still subject to debate. However, it is fair to say that both politics and business have a tight grip on each other.[/pullquote]

While businessman can wield enormous influence over political matters, politicians are still able to pass laws and regulations that touch on business matters, thereby guiding and limiting their business conduct. What is important is that neither one gains enough influence at the expense of the other.

Furthermore, it is crucial to understand both the positive and negative aspects of politics and business.  Understanding will not only enlighten a person of the ethical and legal aspect of doing business, it will also bring about an understanding of where many of these business policies and regulations come from and how much does it affect certain business.

If anything, this is something that all business, financial and economic person must know.