The Chamber of Commerce Is the International Cosmopolitan Elite

Not that there’s anything wrong with that!

I have been pondering two seemingly separate issues — the first, what constitutes an “elite”. David Brooks says it’s bobos; Charles Murray says it’s those who “…spend school with people who are mostly just like them — which might not be so bad, except that so many of them have been ensconced in affluent suburbs from birth and have never been outside the bubble of privilege. Few of them grew up in the small cities, towns or rural areas where more than a third of all Americans still live.”

Personally, I always thought American elites were football players and the folks highlighted on Entertainment Tonight, given the amount of attention devoted to those two groups. (See other recent commentary here) The second, as a social scientist, what interests should one expect the U.S. Chamber of Commerce to be lobbying for [1] (since we do not have direct observation on the funding of the group, we need to infer the interests). I have come to a single answer that partly addresses both of these two questions:

22chamber-g.jpgFigure 1: Source: Lipton, McIntyre, and van Natta, “Top Corporations Aid U.S. Chamber of Commerce Campaign,” NY Times, 22 October 2010.The U.S. Chamber of Commerce is the International Cosmopolitan Elite!  

Barbara Kiviat has noted that the U.S. CoC should not be thought of as representing American business interests, but rather international interests. Her conclusion is entirely correct, and is also entirely consistent with the U.S. Chamber of Commerce’s self-description.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations. More than 96% of U.S. Chamber members are small businesses with 100 employees or fewer.

Note the noun “world”. Now compare with the description from “Cosmopolitanism” in the Stanford Encyclopedia of Philosophy:

Marx and Engels tagged cosmopolitanism as an ideological reflection of capitalism. They regard market capitalism as inherently expansive, breaking the bounds of the nation-state system, as evidenced by the fact that production and consumption had become attuned to faraway lands. In their hands, the word ‘cosmopolitan’ is tied to the effects of capitalist globalization, including especially the bourgeois ideology which legitimatizes ‘free’ trade in terms of the freedom of individuals and mutual benefit…

For direct quotes from Marx on free trade, see here.

So while it would be obvious that the Chamber would seek to maximize market power on the part of business, and minimize regulatory and input costs for firms, schisms should arise given the fact that there are domestic and transnational and foreign interests represented. For instance, domestic firms would tend to favor measures that tend to shield domestic enterprises. Financial firm and nonfinancial firm interests could also diverge. From a social science perspective, it’s of interest to consider which interest will dominate.

For instance, given the transnational and foreign interests represented in the Chamber, we should expect the group to oppose tariffs and trade restrictions, to oppose restrictions on offshore outsourcing (and to facilitate the process [2]), to support measures that shift the distribution of revenues from wages to profits, to oppose any measures that raise labor costs either in the U.S. or abroad. They certainly would work to keep business taxes low, either at home, or abroad. Impediments to gaining access to foreign markets would also be a natural target, e.g., anti-bribery statutes.

As social scientists, we should look at not just membership, but also the flow of resources to the organization for clues. Apparently “…nearly half of its $140 million in contributions in 2008 came from just 45 donors.” [NYT]. This signifies a difference from the Chamber’s past (see page 117 of this article). To the extent that the largest firms tend to be transnational in nature, we would expect those interests to dominate.

Sometimes, these interests will align with American business. Sometimes, they won’t. For instance, support for an open trade regime enhances overall country welfare (measured as the sum of consumer and producer surplus), relative to autarky. On the other hand, support for preferential trade arrangements might, or might not [4], enhance national welfare. Much depends upon the relative cost structure of the partner economy, the size, and perhaps most importantly, the nature of the provisions in the PTA. The bottom line: the U.S. Chamber of Commerce is an interest group like any other interest group which will push measures that sometimes might benefit overall national welfare, sometimes not. One factor differentiating the U.S. CoC from others is the amount of resources it commands.

So, to sum up, the next time you read an article about elites, I think it would be useful to think about who really influences policy via the various channels, including the political process.

P.S.: For older research (in the capture and ideology vein) on economic determinants of legislative policy stances, see the empirics in the trade chapter of this book.

P.P.S.: I can’t get a listing of who are the members of the U.S. Chamber of Commerce. If anybody has a listing, send the link my way!

Originally published at Econbrowser and reproduced here with permission.
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