Review: Business as a System of Power

Business as a System of Power (1943) serves as both a great piece of economic history and comparative economics, and as an exploration of timeless principles and observations on the nature and political economy of business power. Robert A. Brady’s extremely informative study establishes how business communities from around the industrialized world began, and continued, to operate in critically similar ways to entrench their economic, social, and political power and influence. In so doing, they not only secured their own market position, but also directly participated in guiding and controlling the economy — all while sheltering themselves from market forces. This work deserves a spot in the libraries of those who consider themselves proponents of markets, and opponents of the kinds of power and privilege that unduly shape the realities we inhabit. It sheds light on the ways businesses can shape the world around them in ways that are often tricky to detect and comprehensively explain.

What we find in Part I and II is a tour around the world from one of the era’s key industrial players to the next: Germany, Italy, Japan, France, Britain, and the United States. Brady investigates and describes the power and influence that large business concerns in each country established and sought to maintain, and how they did so via their size, the associations that represent them, and their ties to political power. In each section, he paints a complete picture for the audience, in a way that explains not just how things worked then, but how they play into our contemporary circumstances. Many of his timelines dip back into the preceding century to provide context for the industries that developed in one country or another, how businesses operated individually and came to grow into larger concerns, and what larger structures of power business communities eventually joined forces within.

Despite the very different economic, social, and political circumstances found in different countries, Brady establishes how key business interests and their representatives all shared similar patterns. They planted, grew, and eventually harvested relationships, and alliances, within their own sectors, between other industries, and with governments. In this way they continued to grow and entrench their influence over the markets, societies, and political paradigms in which they existed.

Contrary to what some may think, in many cases, these efforts were neither the result of bumbling chance nor were they gradual, uncoordinated, emergent phenomena. Rather, the orders that emerged were informed by a conscious ideology within business communities that went beyond fueling the desire to simply sell more product, and into visions of securing the positions of economic, social, and political leadership and control that were supposedly due to them. Business communities were often actively concerned with building ties and control within their own class, so as to present themselves to the public and government as the key interests and capable operators that could, and should, partner with the state in organizing, planning, and managing industry. Some of this was done directly via one business or large conglomerate exercising its influence, but much of it was done through networks of businesses and associations, that belonged to larger networks of businesses and associations and so on — in many cases leading up to clearly defined organizational structures and representatives of their interest that would build ties with the state or release propaganda to the general public.

Part III contains a set of compare, contrast, and analysis sections that further connect the dots between what the reader has toured through and Brady’s earlier investigations. Here a common theme tying the grander story together is increasingly apparent: business interests in different parts of the world continually seek to act as systems of power and influence. In this way, a lot of food for thought is presented to start further thinking — not on just the historical incidence of business power, but on the actual function and behavior one can come to expect from it.

There are many important principles one can pull from this careful study beyond the indispensable knowledge it provides. By carefully parsing through the nature and function of the business class and its drive to organize and perpetuate its own interest and power, Brady’s work shakes some underlying beliefs about the business world with which many rest too comfortably.

For example, Brady demonstrates the principle that the large business enterprises, and the associations of which they are a part,don’t radically change in function or character just because of the “good” or “bad” political context in which they find themselves. In fact, one of the key insights from the study notes that the behavior and aims of large business concerns (on their own or in cooperation with the government) didn’t appear radically different in the “totalitarian block” (e.g., Germany, Italy, Japan, and Vichy France), from countries operating “within the liberal-capitalist scheme.” The similarities were striking in their actions and operations in all contexts.

From the perspective of the largest business concerns and associations, each had its own success stories from their respective countries — large business concerns managed to unite and position themselves as critical decision makers and influence the direction and planning of the economy. Whether this power was tightly structured within a fascist system, or slightly more dispersed by leveraging lobbying and indirect influence in capitalist countries, was a matter of window dressing.

Brady also demonstrates how businesses and business associations well understand that perpetuating their broader interests also requires exerting influence on social elements and attitudes outside of the narrow business of buying, selling, and trading. He explores, for example, how webs of business influence aim to perpetuate and mold attitudes within their own class, and outside of it, in the United States. Industrial leaders and some of the largest firms invested in building their own research hubs, bankrolled experts and analysts, invested in recruitment and training programs (independently or through universities), and employed public relations experts and writers; all in the service of ultimately publishing, circulating, and training people with the “right” point of view — that of the business world. Heavy-duty corporate propaganda showing their supposed benevolence targeted public attitudes about everything from rent-seeking and the rightful protection of domestic businesses, to the very serious questions about what groups and kinds of people have rightful and logical places as leaders of society. 

Some final discussions in the section dealing with the American scene address how the propaganda from the business community can shift in character as needed, depending on the political climate and what it perceives as a threat to its control. While earlier efforts “reaching back to the days of 1895” overtly called for “governmental aid, support, and cooperation,” there wasn’t much use for that sort of thing for the business community after they used it to establish their power and influence. So, around the New Deal era their cooperative nature and tone “was now transformed into a campaign against ‘government interference in business.’”

Indeed, for the Western world, the end of Brady’s timelines accurately sets the stage for a new era of businesses and businessmen pumping themselves full of the kind of spirit that has dominated the American business scene ever since. The noble economic vanguard of the 20th century — the incumbent and powerful business interests — saw the government’s rightful role as doing everything it can to support and protect them from true market forces, while simultaneously completely letting them alone to run their affairs in any way they please, including influencing social norms and public opinion. And, “nothing short of conversion of the public at large to the economic objectives, the ideals, and the program of the business community as a whole” would be acceptable.

One cannot be a serious proponent of free market principles while also downplaying or ignoring the economic, social, and political privilege, power, and influence that the growing and largest business powers enjoyed within 19th and 20th century capitalist arrangements, and still enjoy today under those of the 21st. A detailed investigation of how exactly that privilege, power, and influence can, did, and still does, operate as a system unto itself consciously shaping the lives of billions — most often without their input — is worth exploring. The journey to understanding this system is long. Brady’s work does it miles of justice.

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