The power of big business tends to be overestimated

Anecdotally, I often hear people saying that big companies have vast political power and influence. More often than not, this descriptive analysis tends to be coupled with the normative view that it is bad that big companies have such vast power and influence.

While this question is obviously complex and it is difficult to establish exactly how much power big companies have, it seems to me that at least strong versions of the "big companies have vast power" thesis should be rejected. For instance, Trump was in my understanding not popular with most companies and business leaders, and still won both the Republican primaries and the presidential elections. Similarly, wealthy tech companies have not been able to stop European legislation that is to their disadvantage.

A bit speculatively, one might think that people who attribute vast power to big companies do so not because they have evidence to that effect, but because they want to make a normative point: that big companies should have less power, be taxed more, etc. This point becomes more forceful if big companies are thought to rule the world, and hence these people argue that they do. It is unfortunate, however, if such essentially rhetorical moves cloud our understanding of the world - particularly since understanding how much power big companies have may be very important, in particular with regards to the use of new powerful technologies. That question rather needs to be analysed dispassionately.

This post was first published on Facebook, 15 September 2018.