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Has the GOP become a working-class party? On its face, the question is absurd. Whatever the modern Republican Party is, its historical analogues are not the parties of the working class. The party has virtually nothing in common with the SPD (Social Democratic Party) of prewar Germany, the SAP (Swedish Social Democratic Party) of the Meidner Plan, or Lulas PT (Workers Party). Even the decrepit Socialist International, which once counted among its member parties Hosni Mubaraks National Democratic Party, would surely balk at extending admission to the Republican Party.
Yet many Republicans themselves are convinced that their party has indeed made a turn to the working class. The night of the 2020 election, Senator Josh Hawley of Missouri tweeted, We are a working-class party now. Thats the future. A few months later, Representative Jim Banks, chair of the influential Republican Study Committee, wrote a memo to House minority leader Kevin McCarthy making this case in more detail. Banks argued that the two parties were undergoing coalitional transformations, with the GOP becoming a party of the working class, and the Democratic Party becoming a party of professionals and the rich. The result was a historic opportunity for the Republicans to redefine themselves, and, in so doing, secure the permanent Republican majority the party has been chasing for the past two decades.
Liberals have also expressed worry over this prospect. Since at least the 1990s, liberal writers have sounded the alarm about the defections of white workers from the Democratic coalition. At different moments, liberal analysts have pointed to different causes for their alleged abandonment by the white working class. In the 1990s, Thomas and Mary Edsall identified the backlash to the partys embrace of civil rights. In the early 2000s, Thomas Frank highlighted Christianity and cultural conservatism. More recently, Thomas Piketty has argued that the Democrats are but one example of a broader phenomenon across the advanced capitalist world, in which educational polarization replaces class polarization, with the highly educated voting liberal and the less educated voting for various forms of conservatism. It is not only the hopeful right who sees the working class turning the wrong shade of red.
These arguments were, of course, given a healthy fillip by Donald Trumps election in 2016. And indeed, researchers have found real evidence that the white working class was quite important to Trumps victory. Mike Davis, writing in these pages, drew attention to the role of plant closings in key counties in pushing white workers toward Trump. Other researchers have found that white workers comprised a crucial portion of the bloc of 2012 Barack Obama supporters or nonvoters who went for Trump in 2016. Trump, in his own vulgar way, endorsed Pikettys argument about educational polarization, proclaiming, I love the poorly educated.
Yet for all the noise about the GOPs transformation into a working-class party, the claim has remarkably little basis in fact. Examination of survey data reveals that the working class has undergone a slight shift toward the Republican Party, but it is nothing resembling the kind of coalitional transformation claimed by party boosters. Similarly, there is no evidence that workers are today a more important constituency in the Republican Party than in the past. The GOP, simply put, is not transforming into a working-class party.
Theres no question, however, that it has become a different kind of party than American politics are accustomed to. Though complaints about political polarization in the United States are ubiquitous, it is by now widely accepted among political scientists that the main cause of polarization has been a move to the right by Republicans. In comparative perspective as well, the Republican Party stands out. Analysis of its 2016 platform by the Manifesto Project places the GOP closer to the far-right Alternative fr Deutschland than Angela Merkels CDU (Christian Democratic Union), and to the right even of Marine Le Pens Rassemblement National.
Moreover, the GOP has embraced politics that often run directly counter to the preferences of American capital. The government shutdowns it forced while in opposition in 199596 and 2013, and while holding the presidency in 201819, brought demand shocks and economic uncertainty with them, in the service of political goals (budget cuts, stopping Obamacare implementation, and a border wall with Mexico) that could hardly be said to be set in Fortune 500 boardrooms. Tensions between the party and the corporate power elite reached new levels in the aftermath of the January 6, 2021, Capitol riot, when the bulk of congressional Republicans still refused to disavow Trumps claims of election fraud. In response, a number of companies and the US Chamber of Commerce, vowed to withhold campaign contributions from Republicans who voted against certifying the election results. Although the boycott of election conspiracy pushers soon fell apart, it underscored the growing distance between the Republican Party and the business lobby.
This transformation in the party was not driven by a change in its voting base. Instead, it stems from the interaction of two transformations in American politics and society: the weakening of the parties since the 1970s, and the political disorganization of corporate America since the 1980s.
American parties have been institutionally weak by international standards since at least the early twentieth century. As ideologically undefined catchall parties, they existed more as confederations of local political machines than genuine national institutions. However, beginning in the 1970s, changes in party rules, congressional rules, and campaign finance law all combined to hollow out the parties even further. The result is that American political parties barely exist except as networks of funders, campaign services vendors, and candidates. Decisions such as candidate selection are instead outsourced to the primary system. This same system only magnifies the power of money in deciding party politics, since the parties possess few institutional resources for resisting it.
Weak parties themselves are insufficient to explain Republican radicalization, however. If the weakening of party institutions were the only dynamic, we might expect to see an ever-tightening link between Republican politics and the preferences of American business. Instead, we see growing autonomy and conflict. American business, it seems, is no longer as capable of setting the partys agenda as it once was. This incapacity stems from the increasingly disorganized character of American business politics. While in the 1970s business mounted a spectacular mobilization against the New Deal order, by the early 1980s, with Ronald Reagan in the White House, businesss enemies in the state and the unions had been defeated, and business unity began to unravel. At the same time, the reorganization of corporate America via mergers, acquisitions, and consolidation inclined corporate managers away from long-term, policy-oriented political activism and instead toward narrow defenses of the rents and privileges of their respective economic sectors. This kind of activism has often proven compatible with the Republican Partys long march to the right, as the party has been only too happy to oblige corporate Americas preferences for anti-labor, anti-regulatory judicial appointments and tax breaks. The structure of political action by the American ruling class, in other words, has evolved away from the kind of coordinated, long-term action that would be necessary to successfully discipline the Republican Party.
Together, weak parties and elite disorganization have cleared the way for right-wing political entrepreneurs to push the party further and further to the right. A kind of dialectic has ensued since the 1980s, in which party insurgents come to power, fail in their goals, and are replaced by a more establishment power bloc, whose failures then open the door for a new group of insurgents.
These structural transformations, and not a turn to the working-class, are what have remade the Republican Party. This article will begin by examining the evolution of the Republican Partys support base and demonstrating that claims of the partys new working-class base are very much exaggerated. It will then develop the alternative explanation, centered in the weakening of the parties and the changing nature of corporate political action. Finally, it will offer a narrative of GOP history since the 1980s, illustrating how these forces have produced a party of a new type on the American scene.
Though the cultural image of working-class Republicanism is ubiquitous, more rigorous investigation of the partys class composition is considerably rarer. Analyzing such a composition is a fraught endeavor. There are many methodological choices to be made, and these choices can have dramatic impacts on the resultant findings. This section will present one such analysis. In the interest of readability, the methodological choices will be described briefly. The reasons for such choices, and the reasons alternative approaches were decided against, are available in an online methodological appendix.
In what follows, I analyze data from the General Social Survey (GSS), which has been asking consistent questions of a representative sample of Americans for almost fifty years. To measure survey respondents class positions, I employ an occupational definition of class. Essentially, nonprofessional occupations, from laborers to white-collar workers doing semi-routine tasks, are classified as working class. Additionally, I include teachers and nurses in this group, as their incorporation in a category alongside doctors and lawyers has grown increasingly implausible. To measure partisanship, I use the GSS party identification variable, which simply asks respondents which party they identify with.
With the preferred measures of class and partisan political behavior defined, there only remains to be specified conceptualizations of partisan change. Clem Brooks and Jeff Manza, in an earlier study of class and partisanship, provide a useful schema. Drawing on a venerable tradition in American political science, they distinguish between critical realignment, secular realignment, and electoral shifts. Critical realignment, a term first proposed by V. O. Key in the 1950s to understand the coming of the New Deal, describes when a voting bloc, such as workers, decisively shifts partisanship during a single election.
For Key and many subsequent scholars, the 1932 election is the paradigmatic example of such a realignment. Key also suggested that groups sometimes undergo secular realignment, when a clear partisanship shift occurs over the course of several elections. The move of Southern whites away from the Democrats and toward a solidly Republican partisan identity after the civil rights movement is a good example of such a transition. Finally, an electoral shift is when existing partisan attachments of a group intensify or weaken, without decisively shifting. For example, women have been more Democratic than Republican for a long time, and this attachment has grown stronger since the 1990s.
With these concepts in hand, some hypotheses can be formulated corresponding to the various claims made about changes in the Republican Party. First, it may be the case that there has been either a critical or a secular realignment among workers from the Democratic Party to the Republican Party. Second, it may be the case that the Republican coalition has become increasingly working class in composition. Both these hypotheses, as it turns out, are false.
Figure 1 looks at partisan identification among working-class respondents in the GSS. While there has been an electoral shift away from the Democratic Party, and Republicans have gained, there has been no decisive realignment. Indeed, among workers, the rise in independent identification has been steeper than the rise in Republican identification. These results are not sensitive to the inclusion of teachers and nurses among workers; estimates excluding them from the working class show the same trends.
Even looking at occupational subcategories of the working class, the story does not conform to a working-class GOP. Figure 2 looks at partisan identification among the lowest three categories of manual workers: agricultural and primary production workers, semiskilled workers not in agriculture, and skilled manual workers. Workers in these occupations are significantly less likely to possess a college degree (in 2018, about 6 percent of workers in these occupations had a college degree or higher, while about 20 percent of the broader working class did) and, as such, these would be the occupational categories most likely to shift toward the GOP as educational polarization progresses.
Among all three groups, there has been a precipitous decline in identification with the Democratic Party. At the same time, however, the independent category has been the main beneficiary of this decline. The rise in Republican identification has been much more modest and has been greatest among skilled manual workers.
Figure 3 examines the political identification of white and nonwhite workers, broadly defined. As has been found in much previous work, there has been a strong swing away from the Democrats and toward the Republicans among white workers. Interestingly, the bulk of this swing happened between 1970 and 1990, with little change since then. While white workers were once decisively Democratic, for the last three decades, there has been no clear preference among them. While nonwhite workers have also seen a dealignment from the Democratic Party, the result has been increased independent identification, with little gain for the Republicans.
Among working-class Americans as a whole, there has been no realignment, either critical or secular. While Democrats once claimed an overwhelming majority of American workers, their advantage has eroded considerably. Only a portion of that has led to increased Republican identification, however, and among workers as a whole, over the last decade, Democratic identifiers have outnumbered Republican identifiers by 15 to 20 percentage points. Among manual workers, the Republican gain has been greater (particularly among skilled workers) but still falls short of a clear majority. Even among white workers, there has been clear class dealignment, but nothing resembling the emergence of a stable Republican majority. (Indeed, one of the most striking facts about the racial trends is the overall similarity among white and nonwhite workers in disaffiliating with the Democratic Party. Among white workers, Democratic identification dropped by an average of 0.46 percentage points per year. Among nonwhite workers, it dropped by about 0.41 percentage points per year.) Of course, its possible that these shifts are incomplete and, within a few years, a secular realignment will be visible. But in the aggregate, and even among white workers, the trends suggest that Republican gains have actually been stagnant for some time. The overall story is one of class dealignment rather than realignment.
The other possibility is that, instead of workers becoming decisively Republican, the Republican coalition has become more working class, perhaps caused by the well-documented exodus of professionals and the highly educated from the party. Figure 4 charts the class composition of Republican identifiers. Far from becoming more working class, the Republican coalition has become less working class over time. Again, the overall trend is class dealignment. Where the Democratic Party was once far more class-polarized than the Republican Party, both parties have become less working class over time, such that the degree of class polarization in both parties is approaching equal. Independents, meanwhile, remain highly class-polarized, with little change over the past half-century.
However the Republican Party has changed since the 1980s, the driving force has plainly not been the rise of working-class Republicanism. The Democrats, it is true, have experienced near-catastrophic levels of working-class exit. But the Republicans have not, in the main, reaped the gains of this. Partisan polarization within the working class has diminished, with the result being that no party commands a clear majority of working-class support. Similarly, within the Republican Party, the share of the party made up of workers has actually diminished over the last few decades. The arguments of Republicans like Hawley and Banks appear to be more advertising than analysis. Explanations of the partys extraordinary move to the right must look beyond class voting patterns for their mechanism.
From the perspective of many other capitalist democracies, American political parties dont really exist. They have no membership lists, their platforms are largely built after their candidates are nominated, and, perhaps most important, the parties themselves have very little control over the nomination process. Thus, it is not unheard of for a Holocaust denier, for example, to win a Republican primary in a deep-blue district in which the party invests no resources, or for a member of the LaRouche cult to win a Democratic nomination in a deep-red district. Though in such cases the party will often denounce the candidate, it has no power to prevent them from running on its ballot line.
The weakness of American parties, which intensified after the 1970s, has had two results. First, the hollowing out of the parties removed one of the few counterweights to the power of money in American politics. Now, the power of money to decide matters of party direction, and thus ultimately of policy, is even more unmediated. Second, and related, the role of parties themselves changed, from institutions that determined key questions of party life, from platform to nomination, to candidate-service organizations whose main role is fundraising and providing access to vendors of campaign services.
From the countrys beginning, American political parties have been weak by design. Inheritors of the political thought of Georgian England, the authors of the Constitution were at best ambivalent about organized political opposition to the current government, seeing in such activity the seeds of civil war. To Federalists and Anti-Federalists alike, parties were, in Richard Hofstadters words, sores on the body politic. Alexander Hamilton, who, like all of the Constitutional generation, used the terms faction and party interchangeably, argued that one of the chief virtues of the Constitution would be its role in suppressing parties. We are attempting by this Constitution, he told the New York state ratification convention, to abolish factions.
The Constitution designed by these men contemplated no role for parties. (The word party is only used in the Constitution in the sense of a party to a conflict.) Indeed, the cumbersome separation of powers system they designed was expressly intended to check parties. The presidency was envisaged not as a partisan office but as one whose inhabitant would have to stand above party. As parties did inevitably develop in the political conflicts that followed ratification, they grew as private organizations in constitutional interstices, without clear relation to the state itself.
Over the course of the nineteenth century, American parties became quite powerful entities, though they existed primarily on the local level. On the national level, the parties were unwieldy coalitions of regional power elites. Nonetheless, they were strong enough that, by the late nineteenth century, the parties themselves had become plausible scapegoats for any number of societal ailments.
In the thinking of Progressive reformers, parties were either the organs responsible for activating the baser instincts of the poorer citizens or the vehicles by which such citizens plundered their more industrious counterparts. Reformers accordingly bombarded them with a whole suite of new policies. Civil service reform targeted the parties by trying to deny them the ability to reward their patrons with government employment. One of its supporters went so far as to claim that the Merit System . . . will help to abolish partisanship. Numerous municipalities attempted to remove city government from the remit of political competition entirely through the city manager system or, barring that, by making local elections nonpartisan.
The reform with the biggest impact on American politics in the long term, however, was the direct primary. Its most important advocate was Progressive standard-bearer Robert LaFollette, who, as governor of Wisconsin in 1903, signed the nations first law forcing parties to conduct nominations for state-elected positions via primary elections. For LaFollette and his cothinkers, the entire point of direct primaries was to disempower the parties as institutions and empower voters as individuals. The direct primarys effects on parties were well described by V. O. Key more than half a century ago:
The adoption of the direct primary opened the road for disruptive forces that gradually fractionalized the party organization. By permitting more effective direct appeals by individual politicians to the party membership, the primary system freed forces driving toward the disintegration of party organizations and facilitated the construction of factions and cliques attached to the ambitions of individual leaders.
Direct primaries spread rapidly. Already by 1917, thirty-two of the forty-eight states required them for nomination to state offices.
Combined with the regionalization and elite orientation of the apparatuses, the primary only further fractured the party system. As a result, American parties exist more as semi-public agencies for the organization of elections than as private bodies (agencies of civil society) advocating particular programmes. State parties are compelled to hold primaries for elections they hope to contest. Courts in some states even went so far as to forbid state parties from endorsing a candidate within a primary, an unthinkable situation in comparable countries. The national party, meanwhile, can exert no real power over state parties in matters of program, candidate selection, or anything else beyond criteria for sending delegates to the national convention. Even on the national level, American parties existence is institutionally fractured. The national committees of the party exist mainly to oversee the presidential nomination process. The congressional parties each exist independently, with no institutional link to the national committees. Most staff are employed either by individual members of Congress or by the congressional caucuses, which are funded out of congressional operating expenses. In the United States, there does not exist an actual organizational analogue to the UK Labour Party or the Christian Democratic Union of Germany.
Until the 1960s, then, American parties were pointillist entities, appearing unitary only from a distance. From the late 60s onward, two changes took place. First, the parties sorted along an ideological axis, with the Republicans becoming the party of conservatives and the Democrats the party of liberals. Second, legislative and party reforms weakened the parties even further, combining with escalating campaign costs to define a new and even more unmediated role for money in determining questions of party leadership and direction.
These processes originated with the Democratic Party, and the struggle between its liberal and conservative wings. It had been clear since 1937, when Southern Democrats first turned against the New Deal, that the prominence of the undemocratic South in the party was a blockage to the ambitions of many elements (most notably African Americans and union members) within the Democratic coalition. Since the Southern Democrats never lost to Republicans, their average tenure in the House and Senate was longer than their Northern counterparts. And since committee assignments and leadership were distributed on the basis of seniority, Southern Democrats held outsize power in Congress, which they used to block liberal legislation.
Many in the party hoped that the Voting Rights Act of 1965 would be sufficient to displace the power of the old Dixiecrats. It was not. While Strom Thurmond famously left the Democrats for the party of Barry Goldwater in 1964, his was not the modal trajectory for his species of politician. James Eastland remained a Democratic senator until 1978, while Herman Talmadge served until 1981. In the House, John Conyers tried and failed in 1971 to strip the Mississippi Democrats of seniority, given that they remained members of a segregated Mississippi Democratic Party that was not recognized by the national committee.
Over the next few years, Democrats instead altered the rules by which committee leadership in Congress was distributed, weakening the role of seniority. Now, committee leadership assignment was in the hands of caucus leadership, creating more centralized congressional parties.
As John R. Wright has pointed out, liberal disaffection with Dixiecrat seniority was not the only force driving reform. The Democratic Party also confronted a money problem, and the congressional reforms it passed were one part of its solution to this problem. Since the Dixiecrats, even in the early 1970s, were still able to win largely noncompetitive elections, their campaign costs were considerably lower than other Democrats. And since these other Democrats were locked out of powerful positions by Dixiecrat seniority, there was a powerful incentive to either remove or dilute that seniority, in order to give other Democrats the congressional power that would bring donations along with it. As such, in addition to dethroning seniority as the sole criterion for committee leadership, congressional reforms in the early 1970s distributed power more widely among congressmembers, forming additional subcommittees and generally increasing the power of noncommittee members over legislation coming out of a given committee.
The impetus to increase the partys fundraising prowess was particularly pressing in the 1970s. Beginning in the mid-1960s, campaign costs had risen vertiginously. Driven by the increasing importance of broadcast (radio and television) advertising in political races, costs climbed ever skyward. From 1964 to 1968, total political spending jumped from $200 million to $300 million, a 50 percent climb in four years. In 1972, it reached $425 million, having more than doubled since 1964. Broadcast costs drove this increase. From 1966 to 1970, nonpresidential radio and television spending rose from $27.2 million to $50.3 million.
This explosion in campaign costs was bad news for Democrats. After the losing 1968 campaign, the Democratic Party was more than $6 million in debt. Since the mid-60s, Republicans had tapped into the small political donor market far more effectively than Democrats, using Richard Vigueries direct mail techniques to solicit money from hundreds of thousands of donors. At the same time, political action committees (PACs), pioneered by the CIO, were growing in importance.
This pressure combined with the long-standing liberal Democratic demand for congressional reform to create a powerful impetus for campaign finance reform. In 1972, the Democratic Congress passed the Federal Election Campaign Act (FECA), and in 1974, it passed a series of amendments to the act that created a new legal environment for campaign spending.
FECA and its amendments brought a number of changes. First, they created a new legitimacy for PACs, whose legal status had previously been unclear. Labor unions in particular demanded PAC legalization as a way to protect their political work. Second, they introduced strict new disclosure requirements on campaign financing. Third, they instituted spending limits for presidential and congressional campaigns, as well as contribution limits for individuals. Fourth, they established a matching funds system, by which presidential candidates could receive public funding in return for keeping spending below a certain limit. In 1974, the Supreme Court ruled inBuckley v. Valeothat the spending limits were an unconstitutional infringement on freedom of speech, but it affirmed most of the laws other provisions. Finally, in 1979, a further set of amendments created the category of soft money, funds spent by state and local parties on voter mobilization instead of a specific candidate.
The consequences of FECA, modified by the Supreme Court, were immense. The most immediate consequence was an explosion in PACs and their donations. In 1968, there were eighty-nine PACs. In 1982, there were 3,371. In 1968, PAC contributions to congressional candidates totaled $3.1 million. In 1982, the total was $83.1 million. Though labor had demanded PAC legalization, business was the real beneficiary.
Candidates soon began fundraising with the goal of redistributing money to their colleagues, thereby winning their support for key committee and caucus leadership positions. As with so much else in this story, Democrats led the way. In 1977, when Tip ONeill assumed his position as Speaker of the House, the race to serve under him as majority leader was conducted, for the first time, on the basis of who could redistribute most to their colleagues. Jim Wright of Texas won, setting himself up to become speaker after ONeills retirement a decade later. Two years after, Henry Waxman of California, a two-term representative, ascended to the chair of the Health and Environment Subcommittee of the Commerce Committee (on which he ranked fourth in seniority) by redistributing money to his colleagues. He founded a new PAC, the Friends of Henry Waxman, and directed $24,000 to his colleagues on the committee, who rewarded him with their votes. Seniority was, at long last, dead.
Others soon followed Waxmans example. In 1988, there were forty-five such leadership PACs, which existed to redistribute money among congressmembers. One new congressmember who proved a keen student of Waxmans approach was the representative from suburban Atlanta, Newt Gingrich. By 1998, freshmen congressmembers were launching leadership PACs before they had even been sworn into office.
In addition to initiating this orgiastic atmosphere of fundraising and redistribution, FECA cemented the weakness of American parties in another sense. By creating a campaign finance infrastructure that is completely candidate-focused, it reinforced the background role for parties as institutions. Candidates create campaign committees, and these organizations are the primary vehicles through which elections are contested. Parties hope to exercise influence on the margins.
In other words, parties didnt simply become weaker. The role they played in American politics changed. At the state level, parties are now decisively subordinate to candidates, whose nomination is not controlled by party organizations and who dont even rely on parties for fundraising or campaigning. Instead, state parties exist mainly to provide linkage with the increasingly well-funded national organizations. As one scholar, Gerald C. Wright, summed up the new role of state parties, they are no longer performing all or even most of the roles of recruitment, nomination, electoral support, and party discipline of elected officials. The activities of the formal state party organizations are more supplemental than controlling. At the national level, the story is much the same. Parties now exist primarily as networks of funders, external organizations, and campaign service vendors. Their role is to act as intermediaries between the candidates and the private market of campaign services, as political scientist John J. Coleman puts it.
The American party organizations, always weak, have become background players in American politics. They are, in the words of two prominent scholars, hollow parties, neither organizationally robust beyond their roles raising money nor meaningfully felt as a real tangible presence in the lives of voters or in the work of engaged activists. Without any real institutional powers of their own, they exist mainly as conduits through which political money can flow from source to destination.
As a consequence, the enfeebled Republican Party can exert little counterpressure against extreme candidates who run for nomination on its ballot line, particularly if they are well financed. Sometimes, as in the case of a Holocaust denier running in a deep-blue district, the only result is half a news cycle of bad press. In other contexts, however, it has cost the party wins. In 2010, Christine ODonnell, a Tea Party activist only marginally tethered to reality, beat the former Republican governor of Delaware in a Senate primary and proceeded to lose the general election by more than 15 points. In 2012, Tea Party Senate candidates in Indiana and Missouri handily won primaries against more establishment candidates and went on to lose winnable general elections, making a Republican seizure of the Senate that year all but impossible. Though these candidacies were opposed by many in the party leadership, the leaders now possessed few organizational resources with which to derail them.
Party enfeeblement is clearly not sufficient to explain the Republican Partys increasing distance from corporate political preferences. If money now rules the parties in a more unmediated fashion than ever before, one would expect the historically preferred party of American capital to be an even more servile supplicant to corporate boardrooms. Instead, the opposite has occurred. The partys steady march to the right has resulted in new levels of estrangement from capital. American capital has failed to discipline the Republican Party.
The roots of this failure lie in the transformation of US corporate political action. Compared to most other advanced capitalist countries, business is strikingly disorganized in the United States. In the 1970s, American business forged a new degree of political unity, as the economic turbulence of that decade provided both the means and the motivation to finally strike a decisive blow against the New Deal order. However, this unity quickly decayed in the absence of a powerful external foe. At the same time, changes in the structure of American corporate organization further disorganized corporate political life.
The result of these transformations has been the political fragmentation of the corporate elite. Corporate political action is now oriented less toward classwide concerns and more toward sectional and particularistic causes. Corporate managers are interested in protecting the short-term interests of their firm. They want legislation that will hurt them to be defeated, they want judges who will rule against labor and regulations to be appointed, and they want corporate prerogatives like executive pay to be untouched.
In the defense of these sorts of sectional interests, the radicalized GOP is an able partner. It also wants social welfare legislation defeated, plutocratic privileges defended, and a judicial bench stocked with reactionary jurists. However, the partys rightward peregrination has also produced quite a few negative externalities for capital, from needless uncertainty around the national debt to a devotion to minority rule that is threatening the legitimacy of a political system that has worked remarkably well for the corporate rich since the nineteenth century. The reorganization of corporate political action has left them with few resources for reducing these externalities.
American capital is unique among other advanced capitalist countries for its disorganized character. There is no national organization that is the primary representative of American employers. The roots of this go back, ironically, to the weakness of the American labor movement. Scholars of business organization noticed long ago that the organization of capital into business associations follows the organization of labor. Claus Offe and Helmut Wiesenthal summed up the dynamic of organization in capitalist society as follows:
In all capitalist countries, the historical sequence is this: the first step is the liquidation of the means of production of small commodity producers and the merging of these into capitalist industrial firms; the second step is the defensive association of workers; and the third step is associational efforts that are now made on the part of capitalist firms who, in addition to their continued merging of capital, enter into formal organizations in order to promote some of their collective interests.
The United States has never had a dominant national business organization. The American labor movement, weak and sectional in the half-century following the decline of the Knights of Labor, never forced American business to organize. The absence of a strong socialist party similarly removed the threat of a hostile party coming into government. As a result, the first major organizations of American business, the National Association of Manufacturers and the Chamber of Commerce, were organized externally, the first by William McKinleys 1896 presidential campaign, to promote its effort to rally all of American capital behind it, and the second by the William Howard Taft administration, as an effort to overcome the fragmentation of American business, which was making it harder for the administration to hear what capital wanted. In the United States, business has felt precious little pressure to organize itself.
The consequences of the resultant disorganization are considerable. As Cathie Jo Martin has argued, it is much harder for U.S. employers to think about their collective long-term interests than their counterparts elsewhere. As multiple organizations compete to represent business interests, business organizations have to themselves be concerned with their market share. They find it easier to voice short-term objections than to endorse positive policy change.
The economic crisis of the 1970s triggered a medium-term reversal of this tendency. In the late 1960s, as corporate profits began sagging, the efforts of American businesses to recoup them through intensified exploitation sparked a rank-and-file-led upsurge among American workers. At the same time, the American economy, more integrated than ever into the global economy, was falling behind its international competitors. Finally, beginning in the late 1960s, a new wave of regulatory bodies was created, including the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA), whose new impositions on business could not have been, from the perspective of corporate managers, more poorly timed.
In response, American business began to organize itself with a new urgency. Two groups reacting to the economic advances of 1960s liberalism the Labor Law Study Committee and the Construction Users Anti-Inflation Roundtable had begun talks of a merger in the hopes of presenting a united business front capable of fighting not just on policies of particularistic interest to certain firms but on a classwide basis for business as a whole. In 1972, they merged to form the Business Roundtable, and the next year, the Roundtable absorbed the March Group, an informal association of big-business CEOs who began meeting in 1972 to coordinate political action.
The Roundtable was a new kind of organization for American business. Eligibility was limited to CEOs of the very largest American corporations. The Roundtable would not endorse candidates, nor would it hire lobbyists. Instead, it concentrated on building business unity and deploying it through the personal interventions of its CEOs with elected officials.
At the same time, the Chamber of Commerce was evolving. It created the position of a full-time president to run the group. In 1975, it hired Richard Lesher, who won the job primarily through his strident advocacy of free market economics. Lesher brought new life to the formerly sluggish Chamber, embarking on a dedicated recruitment campaign. In 1976, the organization had fewer than fifty thousand members. By 1980, it was closing in on a quarter of a million.
The result of this surge of business organization was a newly invigorated political voice for American business. As Jacob Hacker and Paul Pierson put it, Corporate leaders became advocates not just for the narrow interests of their firms but also for the shared interests of business as a whole. Though pluralist political theorists had spent much of the 1960s assuring their readers that American business had far too many cross-cutting divisions to achieve the kind of unity that would allow them to dominate politics, the 1970s unfolded as one long counterargument. Initially focused on defeating liberal legislation, such as labor law reform and consumer protection bills, American business had, by the time of Ronald Reagans election in 1980, moved to take the offensive, pushing for the rollback of long-existing elements of the New Deal order.
The very success of the business mobilization undermined its durability. By the 1980s, labor institutions were in shambles, and both parties had accepted a neoliberal policy agenda. Profits were on an upward trajectory again, and labor no longer posed a threat. In the absence of a unifying external enemy, capitalist class unity broke down. On the most basic level, organizations like the Chamber of Commerce had trouble selling membership while a friend of business like Reagan was in the White House. By the mid-1980s, Chamber membership was once again falling, dipping below two hundred thousand in 1985. One senior official explained, For the last six and a half years, youve had a President in the White House who said hed veto anything antibusiness. So why should business people bother to join? With the various threats of the 1970s receding in the rearview mirror, the divisions and disorganization that characterized American business associations for most of the twentieth century once again began to assert themselves.
Capitals victory wasnt the only cause of its disorganization. Changes in the political economy during the 1980s also worked to further fragment the American corporate elite. While many could be identified, from the shareholder revolution and the consequent decline in managerial tenure to the consolidation of interests via mergers and acquisitions, the changing place of banks in American corporate life stands out in importance.
One of the most-studied facets of American corporate life is the network formed by managers and board members of one corporation who sit on the boards of another. Since this network took shape in the late nineteenth century, banks have occupied a central place within it. Bank boards, in particular, have generally been larger than other boards and have been places CEOs and board members from other companies are gathered together. In this way, banks acted as an institutional site for the construction of classwide rationality.
Since the 1980s, however, the role of banks in the intercorporate network has changed as their role in the economy more broadly shifted. The rise of the commercial paper market, in which firms issued bonds of their own to raise capital rather than taking a loan, squeezed banks on the lending end. Consumers also increasingly had new options for savings, creating a second squeeze on the depositor end. The solution was for banks to turn to providing financial services for clients, rather than lending, to generate income. Even before the Gramm-Leach-Bliley Act tore down the New Dealera prohibition on commercial banks partaking in investment banking, banks had begun to move into new activities like securities underwriting. One study of a leading bank in the late 1990s found that only about a quarter of their deals involved lending as a primary component. The goal of lending, now, was mainly to secure business in other financial services divisions.
As banks became less important as lenders, they also became less central in the intercorporate network. The average bank board size dropped by about a fifth in the 1980s. The number of directors connected to other firms dropped. Where banks were once reliably the most interlocked firms in the network, by the mid-1990s, only a minority of the most interlocked firms were commercial banks.At the same time, the corporate network as a whole became significantly less centralized. In the 1980s, Michael Useem described the inner circle of the corporate elite, comprised of those figures who sat on two or more corporate boards. This inner circle disappeared over the next few decades. In 2000, seven directors each sat on six or more boards, and forty-four sat on five. In 2010, not a single director sat on six or more boards, and only eleven sat on five or more. American corporations were becoming more isolated.
These processes were corrosive to the kind of classwide rationality American business had forged in the crucible of the 1970s. Without a common enemy, fractures among business opened back up. At the same time, the nations political economy was on a track, partially as a result of victories won by business mobilization, that further undermined businesss ability to forge a long-term, classwide perspective on politics and policy. The histories of the countrys two major business organizations, the Business Roundtable and the Chamber of Commerce, both illustrate how business political action changed as a result.
The Business Roundtable had started experiencing severe internal divisions after the 1981 Reagan tax cuts blew a huge hole in the federal budget. Facing the 1982 and 1986 tax bills, the organization was divided and unable to exert significant pressure to preserve the tax provisions most favorable to business. As one Reagan administration official said of the business lobby at the time, They were brought down by the narrowness of their vision. Precisely because they defined themselves as representatives of single special interests, they failed to notice their collective power. Some issues, however, could still motivate decisive action. One such issue proved to be new Federal Accounting Standards Board (FASB) regulations that would have forced companies to treat stock options for executives as real costs to the business, rather than essentially free perks. The Roundtable moved swiftly into action to block the changes, inviting the FASBs research director to a private meeting with the chair of the groups accounting principles task force. The head of the Securities and Exchange Commission (SEC) later said he had to devote about a third of his time to this issue alone, and was constantly being threatened and cajoled by legions of businesspeople. The Roundtable had found an issue on which there was unanimity, but it was one that only confirmed how narrow and provincial corporate political action was becoming.
Over the course of the 1990s, the Roundtable went into organizational decline. To be sure, there were some key victories, as when it organized vigorously for the World Trade Organization and other free trade agreements. But observers in Washington noted that its influence was not what it once was. In 1997,Fortune magazine ran a story on its decline entitled The Fallen Giant, which noted the groups troubles achieving consensus. Around the same time, the groups president wrote a memo urging a tripling of its dues to finance more aggressive campaigning. But the move backfired, costing the group nearly a third of its membership.
In the decades that followed, the Roundtable continued to press for business-friendly policies like tax cuts and social security privatization. But the issue that spurred large-scale mobilization was, once again, a narrow question of corporate governance. This time, it was a provision in the Dodd-Frank financial reform bill that would have made it easier for shareholders to elect different directors to a corporations board. In response, the Roundtable flew into action. President and CEO John J. Castellani declared, This is our highest priority. Literally all of our members have called about this. This mobilization wasnt enough, in the aftermath of the 2008 financial crisis, to kill the provision. It passed as part of Dodd-Frank. However, the Roundtable and the Chamber of Commerce sued and succeeded in getting the rule removed. Researchers later estimated that the Roundtables success in protecting managerial autonomy against shareholder oversight wiped $70 billion off the value of public corporations. Once again, the Roundtables political activity focused on the narrowest and most provincial aspects of policy.
The Chamber of Commerces evolution has been even more bizarre than the Business Roundtables. The Chamber also faced significant internal dissension over Reagans deficits, and its consensus-seeking internal procedures prevented it from putting forward any plan for dealing with them. The political scientist Mark Smith provides a description of the Chambers decision-making during this period:
The organization probably could not survive without incorporating its members into decision-making. By involving its diverse membership in deliberations that set its positions, the Chamber can help avoid taking stands opposed by part of its constituency. The participation of members helps to ensure that the Chamber takes action only when there is a consensus within business. Even when decisions must be reached without large-scale consultation of the Chambers constituency, the policy committees, board of directors, and staff use available information and precedents to find the common ground supported throughout the business community.
This kind of procedure put the Chamber at a disadvantage in the increasingly fractious world of American business.
The Chamber had continued its decline from the mid-1980s until new management was brought in during Bill Clintons second term. Lesher retired and was replaced by Thomas Donohue, who pioneered a new model for the Chambers work. Rather than attempting to forge a consensus among a diverse group of companies, the Chamber would offer its resources to the highest bidder. Since the Chamber is a trade association, donations to it are not required to be disclosed. As such, it could act as a kind of shield for companies wishing to push unpopular causes that might damage their brands. Their donations to the Chamber would be secret, and the Chambers lobbyists and attorneys would be the ones to get their hands dirty. Donohue was explicit about the purpose of this business model, boasting I want to give them all the deniability they need.
This new business model was first piloted with the tobacco industry, who, as Thomas Ferguson has noted, lurks behind the scenes of many of the most important political fights of the 1990s. Facing significant pressure from Bill Clintons Food and Drug Administration (FDA), the industry needed a new strategy for fighting back, and it found the Chamber in the fight over a new cigarette tax being discussed in Congress. The Chamber offered its services to derail the bill, and Philip Morris poured over $200,000 into the Chamber in 1998 alone. As the Chamber pumped out ads opposing the bill and supplied a constant stream of lobbyists to oppose it on Capitol Hill, other tobacco companies took note of its good work and started kicking in funds. The Senate blocked the bill, and a new model of business advocacy (one can no longer call it organization) was born.
Over the next decade and a half, the Chamber would offer its reputation-laundering services to a number of different industries. When Congress considered new auto safety regulations in the wake of the Ford and Firestone recall in 2000, GM, Toyota, Ford, and Chrysler pumped over half a million dollars into lobbying to remove criminal penalties for auto executives from the legislation. Eleven pharmaceutical companies contributed over a million dollars each for a campaign about prescription drug pricing. The tidal wave of cash the insurance industry sent toward the Chamber in 2009 and 2010, however, dwarfed what had come before. In 2009, Americas Health Insurance Plans, a trade group, donated more than $85 million to the Chamber, which came to 42 percent of its funds that year. These funds allowed the insurance industry to play a double game, pledging support for reform efforts in public, all the while funding the Chambers scorched-earth campaign against a public option or any meaningful regulations on the industry. Throughout all this, Donohue continued to insist to journalists that donations to the Chamber were unrelated to its decisions to get involved in different political causes. The group was selling plausible deniability so rapidly, it seemed, it had forgotten to save any for itself.
In the three decades that followed Reagans administration, American businesss form of political action changed drastically. The united fight to tear down the remnants of New Deal liberalism was over, and business had won. Its victory, however, undermined the very conditions that had made such unity possible. Now exercising an unquestioned dominance over American politics, business found itself rent by the kinds of divisions that had seemed insignificant in the 1970s. They became, once more, as Karl Marx described, a band of warring brothers.
In this new environment, the leading organizations of American capital could no longer operate in the same way. They stopped trying to forge a classwide perspective and ceased seeking consensus. Instead, they attached themselves to the most narrow and sectional concerns of business, whether that meant shielding the tobacco industry from liability or doing everything possible to preserve managerial autonomy.
For these sorts of endeavors, a Republican Party moving ever further to the right was a profitable partner. The Republican right could be counted on to fight against any real penalties for business malfeasance, to back the most brutal slashing of the tax code, and to support judges who would maintain a ceaseless hostility toward labor unions and regulations. What Richard Lachmann describes as the autarkic orientation of American capital fit perfectly with the party becoming more and more conservative.
With the party institutionally enfeebled and corporate America more focused than ever on the narrowest, most sectional forms of political action, the way was cleared for Republican political entrepreneurs seeking to pull the party right. Even in the heyday of moderate Republicanism, during the Dwight Eisenhower administration, there was a strong constituency in the party trying to pull it further to the right. Through a combination of canny organizing, luck, and convention-rigging, these forces managed to win the party nomination for Barry Goldwater in 1964. Goldwater, of course, proceeded to a crushing defeat at Lyndon B. Johnsons hands, an outcome many thought had sealed the fate of the party. Reagans eventual victory in 1980 proved that rumors of their demise were greatly exaggerated.
Yet, once ensconced in the White House, Reagan was an inconsistent force for party conservatism. His victory in the primaries had depended on winning support from some of the partys biggest corporate funders, who had little interest in movement conservatisms various social issue obsessions. George H. W. Bushs presence on the ticket was testimony to the continuing power of this wing of the party. As noted above, after his tax cuts sent the federal deficit skyrocketing, Reagan enacted the largest peacetime tax increase in American history, greatly dispiriting his free market fundamentalist backers. But most important of all, Reagan was not much of a party builder. While he campaigned hard for GOP congressional candidates in 1982, 1984, and 1986, his 1984 campaign in particular undercut the partys efforts. His campaign was, after all, almost entirely image-based and carefully avoided ideological or partisan appeals. In 1986, the White House even ordered the Republican National Convention to avoid a partisan campaign. Moves like these did little to pull the party to the right in the way Reagans original backers had hoped he would.
That task would fall to a former history professor from suburban Atlanta: Newt Gingrich. A former Rockefeller Republican, Gingrich came to Congress in 1978 and quickly realized two things: that the old party establishments were weaker than they looked, and that his route to power meant following the money. Most accounts of Gingrichs rise in the House focus on his battles with Democratic speaker Jim Wright, whom Gingrich successfully brought down over ethics violations in 1989. Catching Wright was certainly important, but what happened behind the scenes, when the cameras werent rolling, is what allowed Gingrich to do it.
From early in his career, Gingrich was a conservative institution builder. In 1983, he founded the Conservative Opportunity Society, a strategy group for conservative congressmembers. In 1986, he took over GOPAC, a fundraising body set up by Delaware governor Pete du Pont to help maintain a healthy stable of state and local Republican candidates who could move up to higher office. Gingrich had first encountered GOPAC in 1985. He later described its impression on him, saying, There was a high dollar fun fundraiser in 1985 and I walked in and saw the amount of wealthy friends that Du Pont had. I saw so much potential that this organization and this wealth could provide.
Gingrich turned GOPAC into a force in Republican politics. He continued Du Ponts work of training candidates, sending out ideologically rigorous audio tapes candidates could listen to in their long car rides crisscrossing their districts. Over the next nine years, GOPAC would raise over $15 million, much of it from conservative business owners, to train and fund future GOP congressmembers. By the time Gingrich ascended to the office of Speaker in 1995, he estimated that 75 percent of GOP freshmen had received his largesse. As Henry Waxman had discovered a few years earlier in the Democratic Party, in the postreform Republican Party, power followed money.
Gingrichs greatest triumph, of course, came in 1994, when, under his leadership, Republicans took back the House for the first time since the Eisenhower administration. Though many observers (and, of course, Gingrich himself) attributed the victory to Gingrichs leadership and agenda, which he called the Contract with America, the evidence for his popularity is thin. In fact, 71 percent of voters reported they had never heard of the Contract, and 68 percent said they were not familiar with Gingrich (of those who were, more had an unfavorable opinion than a favorable one). Instead, as Thomas Ferguson has argued, Gingrich rode a wave of business money to victory. The Clinton administration, despite Goldman Sachs alum Robert Rubins leadership on economic policy, had managed to alienate large sections of capital. The Brady Bill stirred up the gun industry, proposed energy taxes agitated oil, and the administrations intimations about regulating hedge firms even pushed Wall Street away. Most consequentially of all, the attempt to regulate the tobacco industry through the FDA prompted a Jesse Helms protg to appoint Ken Starr (himself a lawyer for a tobacco company) to the position of special prosecutor investigating, at first, the Whitewater scandal. These companies directed a massive amount of money into the Republican Party and its candidates, which Gingrich expertly doled out to the races where it would be most impactful.
Gingrich received a unanimous Republican vote to become speaker. His time on top, however, was not to last. Mistaking the campaign funds that brought him to power for a popular mandate for conservatism, he immediately launched a budget battle with the Clinton administration, demanding cuts to Medicaid, Medicare, and education spending. Gingrich refused to give Clinton a bill he would sign, prompting two government shutdowns that sent Gingrichs poll numbers through the floor.
Gingrichs defeat on the budget dealt a blow to the partys radicals. Their momentum, seemingly unstoppable a few months earlier, had been broken. The more moderate wing of the party, grouped around figures linked to the Bush administration, was ready to seize the advantage. They coalesced quickly around Bob Dole as their choice to challenge Clinton in 1996. Dole had long-standing links to the party establishment, including running as Gerald Fords vice presidential candidate in 1976. Among the partys right wing, however, Dole was viewed as Senator Straddle. To placate them, Dole selected supply-side guru Jack Kemp as his running mate and tacked right throughout the campaign.
Doles backers in the party by this point viewed Gingrich and his horde as a problem to be managed. Allies of Bush, in particular, still smarted at the memory of Pat Buchanans 1992 RNC speech calling for aKulturkampfagainst homosexuality and feminism, which many viewed as mortally wounding Bushs reelection chances. They intended to take no chances in 1996, and GOP figures from Reagan administration veterans to current governors spread the word that theatrics from the partys insurgent conservatives would not be tolerated at the convention.
Doles subsequent defeat did little to improve the party establishments position vis--vis the insurgents. Moreover, Doles decision to resign from the Senate during the campaign meant that Trent Lott, who had been a key Gingrich ally in the House, would become Senate majority leader. In the House, a chastened Gingrich moved to a more collaborative position with the Clinton administration, working quietly behind the scenes on a plan to implement cuts to Social Security and Medicare. However, the Republican Revolution was beginning to devour its own. The freshmen representatives Gingrich had brought in had already begun to turn on him for insufficient conservatism. One Clinton administration official remarked that the freshmen had become Newts Frankenstein monster.
Gingrichs freshmen were joined by Tom DeLay, a former exterminator from Texas. DeLay had won the position of majority whip after the 1994 election, and he had won it by running against Gingrichs preferred candidate. DeLay managed this upset by redistributing money throughout the House on a scale grander than even Gingrich had imagined. A lobbyist for the brewing industry made the game plan explicit: Wed rustle up checks for the guy and make sure Tom got the credit. After winning the whip position, DeLay only intensified his fundraising efforts. He hired an experienced tobacco lobbyist to run his leadership PAC, and the tobacco industry responded by contributing generously.
It was DeLay, not Gingrich, who led the Republican charge to impeach Bill Clinton. Ironically, Gingrich himself paid the price for that gambits failure, resigning shortly after the GOP lost seats in the 1998 elections. The new speaker of the House would be Dennis Hastert, whom DeLay had elevated as deputy whip in 1995. (In fact, DeLay, Dick Armey, and John Boehner had actively been plotting to remove Gingrich and replace him with one of their own.)
As the party headed into the 2000 election, then, a sort of stalemate existed between its establishment and the insurgents. The establishment had lost two presidential elections in a row, but the insurgents had led the party into two debacles the government shutdowns and the impeachment. Moreover, the insurgents had few candidates who could credibly run in 2000.
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For Republicans, There Will Be No Return to Normal - Jacobin magazine