The Global Firm: The Problem of the Giant Firm in Democratic Capitalism

Abstract

Three potential resolutions exist in the political theory literature to the problem of how to subject the giant firm to political science analysis. Under pluralist theory, the existence of high levels of competition in both economy and polity prevent concentrations of either economic or political power, and thereby limit or even cancel out any undue influence exercised by particular firms. Under neo-corporatist theory, firms exercise their political influence through formally constituted associations. This both maintains a level playing field among firms, at least within the sectors represented by an association, and makes transparent the way in which influence is exercised. In the theory of international political economy (IPE), the firm is treated more seriously, but is seen as a simple economic actor maximizing its profits, exercising political influence only in order to achieve that goal. This last comes closest to confronting issues of political analysis raised by the giant firm, but does so by "importing" economic theory into political analysis.