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:


Figure 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!

14 thoughts on “The Chamber of Commerce Is the International Cosmopolitan Elite

  1. cthomson

    Poor Professor Chinn. As American liberalism once again self-destructs (and so quickly this time), it is understandably tempting for an academic liberal to thrash around, looking for external enemies.
    But will writing essays in pop sociology help? Look at the state the once brilliant Paul Krugman has worked himself into. Maybe retreating into the more quantitative realms of macro-econmics would offer more relief? Totally useless, of course, but possibly soothing as completely detacted from the nasty world of ignorant voters?

  2. cthomson

    Poor Professor Chinn. As American liberalism once again self-destructs (and so quickly this time), it is understandably tempting for an academic liberal to thrash around, looking for external enemies.
    But will writing essays in pop sociology help? Look at the state the once brilliant Paul Krugman has worked himself into. Maybe retreating into the more quantitative realms of macro-econmics would offer more relief? Totally useless, of course, but possibly soothing as completely detacted from the nasty world of ignorant voters?

  3. yuan

    as a *real* socialist i am cheering your side on. austerity and atavistic religiosity is exactly what is needed to destroy market capitalism.

  4. tj

    How much is the total contribution of unions? Should we consider union leaders part of the elite? Former SEIU boss Andy Stern is a frequent white house visitor, so I think that makes him an elite.
    Labels like this are pointless and detract from the issues.
    It’s the ability to influence the course of an election that matters in this case. I would like to see a rule that prevents out-of-state contributions by individuals and businesses. I wouldn’t complain if a law was passed limiting contributions to individuals only; no groups, organizations, corporations etc. I am sure they would find loopholes though.
    Headline from the OCTOBER 22, 2010 Wall Street Journal
    Campaign’s Big Spender
    Public-Employees Union Now Leads All Groups in Independent Election Outlays

    The American Federation of State, County and Municipal Employees is now the biggest outside spender of the 2010 elections, thanks to an 11th-hour effort to boost Democrats that has vaulted the public-sector union ahead of the U.S. Chamber of Commerce, the AFL-CIO and a flock of new Republican groups in campaign spending.
    The 1.6 million-member AFSCME is spending a total of $87.5 million on the elections after tapping into a $16 million emergency account to help fortify the Democrats’ hold on Congress. Last week, AFSCME dug deeper, taking out a $2 million loan to fund its push.

  5. Menzie Chinn

    tj: You missed the point of the post. We know what interests AFSCME would lobby for; they would typically involve intra-U.S. shifts in income. The U.S. CoC, on the other hand, has interests that might split between domestic and foreign, even as they favor capital both foreign and abroad. In this sense, the U.S. CoC is conflicted in a manner distinct from AFSCME or AFL-CIO, and it is interesting from a social scientist’s perspective to deteremine what is actually their end goal.

  6. Steven Kopits

    I attend Chamber events in DC when I’m able, particularly those pertaining to energy. The Chamber’s OK, but I don’t get the sense of the elite there. Karen Alderman Harbert covers energy for them, and she’s really become superb in the last couple of years–but when I’ve seen her in action, she’s inevitably playing baseline defense, just trying to hit back the volleys sent at her. But she does it well.
    If you want elite, it’s the media, which determines what news is covered and how. Both liberal and conservative media can be influential, as can business media (CNBC) and comedy (John Stewart, Stephen Colbert). But that’s not the same as saying that voters don’t have their own opinions.
    I think the financial sector also has true elites. It has a large number of Ivy League graduates who are, as a group, highly intelligent, superbly educated, and both confident and assertive. Robert Rubin and Hank Paulson come to mind. The finance sector has both the technical sophistication and experience with handling large sums of capital to be able to weigh in meaningfully in policy issues. DC–run by lawyers–lacks those critical skills, and so is perhaps subject to undue influence by the financial sector.
    All these organizations have both healthy and unhealthy axes to grind; the role of the decision maker is to sort out which is which.

  7. Doc at the Radar Station

    From the linked article: “…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…”
    No argument with “old whiskers” with respect to that observation. One could also say that parasites in the insect world also do not respect national boundaries and be equally truthful. Well… what we are going to be seeing in the immediate future is a sudden realization by a lot of people in different countries that they have a monumental bedbug infestation that needs to be fumigated ASAP! People are going to withdraw from the world into more familiar and trustworthy zones of communities and reject this cosmopolitanism. This is understandable and good for a variety of reasons (the trust issue being the biggest), but there will also be a lot of unintended nasty side effects from this that will cause “markets” a lot of grief.

  8. Charlie

    I really don’t understand people trying to blame iberals for the non-sense going on now. There are no liberals in power, none, but I guess if your a conservative and your entire philosopy and ideology are total failures then what are ya gonna do…take resposibility??? NOT

  9. GeorgeInTexas

    Voters get the government they deserve. If the general public isn’t outraged by the special interest money that flows into campaign advertising and political coffers then fare thee well America.

  10. Bryce

    I concur with Steven Kopits that the mainstream media are a major force of elites. By their selection of what news to cover & how, they anointed Obama president. [Hillary would confirm this assessment.]
    They still largely do not ask the Anointed One tough questions. It is inconceivable that they would ask him something like “Mr. President, as a post-partisan President, isn’t it contradictory that you have so much time to campaign, so much time for golf & vacations, but no time to read any of the bills you promote & sign into law?”
    I would further aver that the media was crucial in selecting McCain to be the Anointed One’s opponent. His campaign was morabund & broke before they rescued him by their presentation of him vs. other Republican candidates.
    As we enter the election, notice that we aren’t talking about 9.6% unemployment, or the health care cost escalating because of Obamacare, or the 1099 nightmare for businesses caused by Obamacare, or all the companies primed to drop insurance because of Obamacare, or those getting special exemptions [so much for rule of law]. No! the media are talking about where Obama is campaigning today. What important, informative news that is.

  11. Tired of the BS

    Yuan, I, too, say “bring it on!” I want to see Sharon Angle put up a bill to eliminate Social Security. That would be good entertainment. I want to see Rand Paul try to convince his fellow Republicans that a Medicare $2000 deductible was the way to go. And I think I would enjoy reading his bill to eliminate the Federal Reserve!
    I want to see what happens when they can’t find enough votes to raise the debt ceiling. I want to see how they cut $100 billion from the $477 billion non-defense discretionary budget. And keep it there for the next two years! I want to see career politician Marco Rubio deport 11 million illegal immigrants asap!
    I want to see Paul Ryan’s roadmap handed out at town hall meetings across the USA!
    I see nothing but good humor on the horizon and I am stoked!

  12. CL Oregon-girl

    Tired of the BS:
    Hope you’ve built your little bunker in the back yard and have stocked up on cat food. Welcome to the post tea party apocalypse. We’ll be laughing all the way at you.

  13. Bob Dobbs

    Just for the record, there are *real* socialists who’s hearts ache at all the needless destruction, however “creative” some find it, that is wrought by the death throes of a failed implementation of capitalism. I for one would much rather see democratic socialism take it’s place immediately and painlessly, in the polling booth. I do not cheer the pain and horror that is going on right now and I do not cheer for more of it as this sick person “yuan” does. My socialism comes from a place of love for all (which is why it should be democratic socialism), this “yuan” may be a socialist, but even socialists can be unfeeling, mean spirited human beings. As a *real* socialist, I know that no matter how many socialists there are, a few or many, there will still be bad human beings among us.

  14. Tired of the BS

    CL – you mean to say they *wont* put up the kind of nonsense legislation they got nominated for? The kind of legislation that gets their base a tingling up the ol’ leg? That they will just be run-of-the-mill tax cut and defense spending Republicans? I’m shocked! And, frankly, disappointed!

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