Influence of Economic power on Political Power in Us

Introduction

The economics power in the US has been getting significantly stronger because  the economy continues to grow and develop. Economic power refers to the ability of individuals and businesses in a country to improve their living standards. Economic power can increase the businesses’ as well as individuals’ ability to make decisions that will benefit them and also reduce the ability of an outside source to influence their decisions (Zhipeng, ZHANGab, & HEa). The economic power in the US is considered to be more than its GDP, which means that in the US, businesses and individuals are more likely to make their decisions with little influence from other sources (Vogel, 2013). The growth of the US economic power has a significant impact on the political power in the country. Political power refers to the ability of a political party or a political figure to influence the conduct and behavior of others. In the argument of Vogel (2013), economic power through deliberate and politically motivated application of economic resources can influence and control political power. For example, businesses and individuals through contributions to the political parties’ campaign can enable them to influence political policies in the future. According to Vogel (2013), political power flows in most cases from economic power. This paper presents an argument that economic power in the US is getting stronger and has been influencing the political power.

 The US Economic Power

Government policies should be made to respond to the economic situations in the country and for the benefit of all citizens regardless of their economic status, whether rich or poor. However, in recent years there has been a significant shift in the factors that influence government policies. In most cases, government policies have been made to favor the rich against the poor mainly because of their economic power and, therefore, their ability to influence political power.

In the US, the economic power is getting stronger, and the stronger it gets, the more significant the impact it seems to have on political power. In the argument of Wilks (2013), economic power in the US is getting stronger because of the continued growth and development of the economy that has resulted in the growth of multinational and international organizations that have a great influence on the country politics. Moreover, the growth and development of the country’s economy have contributed to the increase in disposable income of individuals in the country. The rise in individuals’ disposable income means that people have more income to spend on various activities, including contribution to political parties. The ability of the organizations and individuals to contribute to the political parties’ affairs compromises the political parties, thereby impacting on political power.

The various contributions made by multinational and international organizations as well as individuals to the political parties is one of the reasons why the economic power in the US continues to grow strong. The growth of the economic power in the country means that the government policies in the country are more likely to be influenced by the economic power rather than the need to respond to the needs of the economy.

Understanding Economic Power in the US

In the US, economic power can be attributed to either individuals or organizations. As such, the government policies in the country are either influenced by individuals or an organization’s economic power. The extent to which a policy will either favor a specific category of people or organizations will mainly depend on their economic power and ability to influence political power. It is important to note that rich people will have different political influence compared to the poor, and also that large organizations are more likely to influence government policy as compared to the small organization because of their economic power.

Rich Vs. Poor Economic Power

Economic power is usually as a result of an individual disposable income. An individual disposable income represents the income of an individual that is left after taxation and which an individual can choose either chose to spend or save. Thus, rich people are considered to have more disposable income compared to the poor. As such, in society, rich people are considered to have more economic power to influence government policies compared to the poor. Therefore, because the rich have more money to spend compared to the poor, they are more likely to contribute to the political parties. Political parties would not want to lose the contributions of the rich. Therefore, a policy that is likely to be supported by the rich is more likely to be adopted by the government even though the policy may not be in the best interest of the majority poor in the community.

Large Organizations Vs. Small Organizations Economic power

The economic power of an organization, according to Wilks (2013), is determined by a number of factors that include; first, organization profitability, organizations that are more profitable are considered to have more economic power compared to the organizations that are less profitable. Most large organizations are considered to be more profitable than small organizations. As such, large organizations have more income that can be contributed to the political parties, which increases their economic power in the political environment. Small organizations, in most cases, are not able to contribute to the political parties’ affairs mainly because of their limited resources and, therefore, have less economic power in the political environment.

Second, the number of employees, an organization’s economic power in the political environment is also influenced by the number of employees. In most cases, government policies are more likely to favor large organizations against small organizations because of their large number of employees in a bid to protect those jobs. One of the objectives of any government is to create employment opportunities for its people and to protect the existing jobs. Therefore, large organizations are more likely to influence the direction of the government policies as the government is more likely to influence by their economic power. On the other hand, small organizations have less economic power because they usually don’t have a significant influence on the job market and have less number of employees.

Factors contributing to the growth of economics power in the US

As earlier stated, the economics power in the US has been getting stronger over the years. The growth of economic power in the US is attributed to a number of factors. These factors have made a significant contribution to the growth of the economic power influence in the political environment, which has influenced the way the government develops and implements its policies. As such, these factors have played a key role in ensuring the economic power in the US is getting stronger, contributing to its impact on political power.

The emergence of large and multinational organizations

The US economy has been experienced tremendous growth over the years that has resulted in the growth of organizations in various industries leading to the emergence of large organizations with more economics power. Also, the growth and development of the country’s economy have attracted investments by multinational organizations to the country (Fernald & Jones, 2014). Multinational organizations are known to have huge economics power, and therefore, they are able to influence government policies easily. Also, the economic power of multinational organizations is derived from the fact that most governments want to attract foreign investors to their country for various reasons, such as technology transfer and the creation of employment opportunities. Therefore, to do so, government policies are more likely to favor multinational organizations as the government aims to attract them into the economy.

Technological advancement and innovation

Over the past decade, the country has experienced tremendous technological growth and innovation that has significantly contributed to the growth of economic power in the country. Technological growth and innovation have influenced the organization’s operations, thereby contributing to increased efficiency and productivity that has resulted in increased profitability by organizations (Fernald & Jones, 2014). An increase in profitability by the organizations means that organizations have more money to spend or save without affecting their going concern. As such, organizations that could not afford to contribute to the political parties’ affairs can now be able to do so without much constraint. Also, technological advancement and innovation has enabled individuals to manage their business effectively, and also to engage in new business ideas which have contributed to the increase in their disposable income. Over the past decade, more billionaires have emerged as a result of technology and innovation growth in the country. As such, more people can afford to make donations to the affairs of the political parties’ thereby increasing their economic power in the political environment.

The need for political support in economics

Traditionally, economic though were considered to be independent of politics. As such, the traditional view of the economy was that the government would develop appropriate measures necessary to support the economy without bias. However, in a world that is characterized by politics and biasness, organizations and individuals have realized the importance of economic power as a means of influencing political power. The realization that an organization or individuals are more likely to benefit from friendly government policies if they have economic power has contributed to the desire by the organizations and individuals to seek economics power to be able to influence the government policies in their favor. This desire can be witnessed by the number of organizations and individuals willing to make donations to their preferred political parties in the hope of policy favors in the future. In the past, most organizations and wealthy people used to prefer to be neutral in the political process. However, this has since changed as organizations, and wealthy individuals are nowadays more proactive in the political parties’ affairs.

How Economic Power has been Influencing Political Power

Over the years, economic power has been influencing political power in the US in various ways. The influence of the economic power on political power in the US has significantly impacted many government policies over the years. Though in some cases, the economic influence on political power in the country has contributed to positive economic yields, there are instances when this economic influence has been used to benefit a section of the society to the disadvantage of others. Some of the areas that economic power has been influencing political power in the US include;

Policy-Making Process

In a perfect world, government policies should be made without biasness or favors and should be made for the best interest of the general society. However, we do not live in a perfect world, and therefore, in most cases, government policy is biased and intended to benefit a section of individuals or organizations in society. Moreover, policymakers are likely to favor those who contributed to their campaigns and political affairs when making various policies.  This realization has contributed to the need for large and multinational organizations to use their economic power to influence policymaking in the country by contributing to the affairs of the political parties.

Over the years, large and multinational organizations have been providing various levels of support to the political parties with the hope of influencing or controlling political power and, therefore, are able to influence policymaking in the country. Also, wealthy people in the country have been offering political support to the political parties and their preferred candidates with the hope of controlling or influencing political power. As such, there has been an influence of economic power on the political power in the country that has impacted the policies that are adopted by the government.

The influence can be evidenced by the fact that the government has been adopting policies that favor large and multinational organizations against small organizations. Also, policies adopted by the government have been favoring rich and wealthy and not the poor or middle class. Therefore, policymakers are more likely to favor the rich and large organizations that contributed to their political affairs when developing various policies. As such, large and multinational organizations, as well as the rich, tend to benefit more from government policies because of their economic power compared to small organizations and the poor in the country.

Tax breaks

Tax breaks have a significant influence on business growth and continuity, as well as profitability. A tax break refers to tax concession or advantage allowed by a government to a business. In most cases, tax breaks are offered by a government to encourage investment in the country or in a particular sector. Over the years, large organizations and multinational organizations, as well as a wealthy individual willing to invest in a certain sector, have been influencing the tax break policies in the country.

Tax breaks can be given in the form of tax exemptions, tax cuts, tax credits as well as other tax incentives. Tax breaks have the impact of reducing an organization’s or individual’s tax liability, thereby providing savings to an organization or an individual. Governments are not to favor the organizations and individuals who fund their campaigns or make donations to their political affairs. As such, many large and multinational organizations, as well as wealthy individuals in the country, have been using their economic power to influence political power to benefit from tax breaks. They have achieved this by making donations and contributions to support political parties’ affairs or their preferred candidate in politics.

The influence of economic power on political power and its impact on tax breaks is evident in the fact that the government aims to offer tax breaks mostly to large organizations and multinational organizations rather than small organizations. In fact, small organizations would benefit more from tax breaks as they would get an opportunity to grow and reduce their liability, thereby enabling them to be competitive. However, because of the economic power of large and multinational organizations and the influence they have been having on the government, the government tends to offer these organizations tax breaks in the guise of attracting investments. Also, it is evident in the sense that the US taxation system aims to tax the poor more while the rich are taxed less. Though the US tax system claims to have the feature of equality, the reality is different. Moreover, the government tends to give tax breaks to those sectors that require huge investments, which limit the ability of the poor to take advantage of such tax breaks. As such, tax breaks tend to benefit large and multinational organizations as well as the wealthy in the country, and therefore, there is little if any benefit to the small organizations and the poor in the country.

Trading with government

Large and multinational organizations and also wealthy individuals have been making donations and contributions to the political parties’ affairs as well as their preferred candidate in politics with the aim of using their economic power to influence political power. Their objective in doing so is to enable them to trade with the governments without restrictions. Governments are known to reward those who supported them in their campaigns by offering them trade deals. Thus, wealthy individuals and multinational and large organizations usually support the affairs of a political party or their preferred candidate so that in the event they win, they can be offered the trade deals.

Most individuals, as well as organizations, would want to trade with the government because such trade presents minimal risks as the government is unlikely to default in payment. However, conducting business with the government is usually competitive, and therefore, politicians take advantage of this and promise trade favors to those who support them during the campaigns in the event of their win. As a result, wealthy individuals, and large and multinational organizations use their economic power to influence the political power to ensure they get to trade with the governments.

The use of economic power by wealthy and large organizations to win the trade with the government is at the disadvantage of the small organizations and the poor in society. The economic influence of political power when trading with the government is evidenced by the fact that government contracts are performed by large organizations. Also, it is evidenced by the fact that the poor rarely get the chance to do business with the government mainly because they did not contribute or make donations to their campaigns or political party affairs, and therefore, business with the government is done with the rich who used their economic power to contribute and make donations in their campaigns get to do business with the government because of their influence on political power.

Development of laws and regulations

In a perfect world laws and regulations should be developed for the benefit of the general society. However, as earlier stated, we do not live in a perfect world, and therefore laws and regulations developed in a country are usually influenced by large and multinational organizations or wealthy individuals with a certain objective. As such, the rich and large organizations in the country have been using their economic power to influence laws and regulations development by influencing the political power to ensure such laws and regulations are favorable to their business. It is for this reason that a majority of wealthy people and large organizations, as well as multinationals, tend to provide donations to the political parties’ campaigns. Providing support to the political parties and their preferred candidate ensures that the rich and the large organizations influence political power in the country. The ability of the rich and large organizations to influence political power in the country gives them the power to influence the laws and regulations that will be enacted. As such, it is not all the laws and regulations that are enacted are for the benefit of the general society, but some are aimed at only protecting those organizations or individuals that supported the political parties’ affairs through their donations and contributions. Thus, small organizations are usually at a disadvantage because, in most cases, the laws or regulations will not capture their interest but those of the large and multinational organizations. Also, the poor are usually at a disadvantage because the laws or regulations are mostly influenced by the rich and, therefore, tend to protect the rich more. The economic power influence on political power in the enactment of laws and regulations is evident in the sense that most laws tend to protect the rich and large organizations while the poor and small organizations are exposed.

References

Fernald, J. G., & Jones, C. I. (2014). The future of US economic growth. American economic review, 104(5), 44-49.

Vogel, D. (2013). Fluctuating fortunes: The political power of business in America. Beard Books.

Wilks, S. (2013). The political power of the business corporation. Edward Elgar Publishing.

Zhipeng, D. U., ZHANGab, W. K., & HEa, Y. Economics and Political Economy.