Table Of ContentBUSINESS ASSOCIATIONS AND THE FINANCING
OF POLITICAL PARTIES
BUSINESS ASSOCIATIONS AND THE
FINANCING OF POLITICAL PARTIES
A COMPARATIVE STUDY
OF THE EVOLUTION OF PRACTICES
IN GERMANY, NORWAY AND JAPAN
BY
ARNOLD J. HEIDENHEIMER
Washington University
AND
FRANK C. LANGDON
University 0/ Brilish Columbia
With a preface by
ALEXANDER HEARD
MARTINUS NI]HOFF I THE HAGUE I 1968
@ I968 by Martinus Nijholl. The Hague. Netherlands
Softcover reprint oft he hardcover 1st edition 1968
All rights f6seroed. including the right to translate or to
repyoduce this book or parts thereof in any form
ISBN 978-94-011-8227-0 ISBN 978-94-011-8894-4 (e-Book)
DOl 10.1007/978-94-011-8894-4
Preface
Students of government and social power recognize that wherever
governmental systems embrace popular elections, the functions and
mechanisms of political finance constitute inevitable links of influence
between economic structures and political processes. The transmu
tation of economic power into political power has been of historic
concern from ancient philosophers to modern political scientists.
Efforts to discern and interpret the political roles of those engaged
in funding candidates and political parties have intensified in recent
years. Attention given the subject has deepened substantially in the
United States since World War II and, while there have been differ
ences in range and quality, serious analytical interests have also
developed in numerous other nations around the world. These trends
have been accompanied by increasingly more energetic and sophisti
cated attempts at comparative analysis.
Problems in transnational studies of political processes have always
been formidable. The comparative study of political finance has been
retarded by difficulties in defining units of analysis that make it
possible to identify in some measurable way the effects of political
fmance in precise phases of the governing process, e.g., in the per
suasion of voters, in party nominating processes, in executive decision
making. Cash transactions, even when known with confidence, consti
tute only a partial aspect of political finance. Other shades of economic
power may be equally relevant, involving services or goods directly
provided, credits and other economic benefits extended or withheld,
and the exercise of less tangible but equally potent influence. The
significance of even cash transactions themselves may differ sub
stantially, moreover, in accordance with the institutional, social, and
cultural context.
In this book, Professor Heidenheimer and Professor Langdon offer
VI PREFACE
a stem effort to examine one type of social organization. the "business
association," in important relationships to the political process. They
do this in three significantly different nations - Germany, Norway, and
Japan. They describe the context in which business associations
functioned, the factors affecting their rise in importance, the conse
quences of their participation, the reactions to their participation, and
trends toward their survival or decline. The result is an illumination of
the processes by which certain important types of economic and po
litical power are related in those countries, and of how these forms of
economic power intersect with other sources of electoral and official
influence. The authors' analyses make it clear that institutional forms
of political participation and popular governance are functions of a
wide variety of factors - an observation made before but seldom so
systematically elucidated through comparative analysis.
Professor Heidenheimer has been the principal pioneer in the com
parative study of political finance. Over recent years he has stimulated
the interest and energized the efforts of a gratifying number of scholars
in a gratifying number of countries. Both he and Professor Langdon in
their previous work have contributed to the study of political finance in
single national settings and to its comparative study as well. Their
present volume will be much appreciated by all concerned with the
slow climb toward a more general political science.
Vanderbilt University ALEXANDER HEARD
Table 0/ Contents
PREFACE BY ALEXANDER HEARD V
ACKNOWLEDGEMENTS XIII
INTRODUCTION XVII
PART I: ORIGINS AND CONTEXTS
Factors Shaping the Growth of Business Associations
and their Involvement in Political Finance
A. The Expansion of Associations and their Political Roles in
the Setting of Industrializing Societies
I
Associational Membership and Commitment I
Unions, Employers and the State 5
Articulation Styles 6
B. Types of Political Support Chanelling Structures and their
Utilization by Entrepreneurs 9
Conveyers, Sponsors and Parallel Action Organizations 9
Loyalties to Parties and Associations I I
PART II: GERMANY
by AJH
How German Business Associations Came to Innovate
Manifold Political Finance Techniques
A. A Historical Pattern of Rivalry Between Parties and As-
sociations 14
I. The Cartel Tradition and the Role of Associations in Social and
Political Mobilization
VIII TABLE OF CONTENTS
The Emergence of Peak Associations 15
The Repression of Labor's Political Organizations 17
Working-Class Patterns of Political Finance 19
Prototypes for Political Financing by Business 21
2. Conveyers, Sponsors and Parallel Action Organizations as Coalition-
Mongers in Wilhelmine Germany 23
The Reichsverband Against Social Democracy 26
The Industrial Election Fund 30
The Hansabund 32
3. Business Associations as Shapers of Entrepreneurial Ideologies Before
and After the Third Reich 35
An "Industrial Nobility" 36
Heterogeneous Weimar Party Finance Patterns 37
Stresemann's Experience 39
Entrepreneurs as a Post-war Political Elite 41
B. The Business Conveyers as Coalition-Reinforcers of the
Adenauer Era and the Reasons for their Decline 43
I. The Peak Industry and Business Associations as Founders of the
Complex Conveyer Systems of the 1950'S 43
The Attitudes of the Parties 44
Business Association Discipline 45
The BDI's Leadership Role 47
The Offensive Nature of Conveyer Goals 48
Quota-Setting and Collections 50
2. The High Utility of Financial Resources in the Shaping of German
Voting Behavior during the Adenauer Era 52
The Tax-favored "Civic" Conveyers 52
The "Family" of Coalition Support-Channellers 53
The Voters' Predispositions 56
Adenauers' Campaign Successes 58
How Conveyer Funds were Invested 59
3. The Widening Rift Between Conveyers and Parties and the Resort to
the State Finance Alternative 62
The Position of the Minor Party Leaders 63
Conveyers and Party Secretaries 65
Demands on Ministers 68
The Introduction of State Subsidies 71
4. The Embattled Public Subsidies and their Conversion into Support
Pillars of the Post-Erhard CDU-SPD Coalition 74
Control Techniques 74
The Pyramiding of State Finances 78
The Attack on the Constitutionality of State Finance 80
Party Finance Formulas and the Grand Coalition 85
TABLE OF CONTENTS IX
PART III: NORWAY
byAJH
Why Norwegian Business Associations Have Generally
Av oided Political Finance Roles
A. A Historical Pattern of Intense but Limited Associational
Activity 89
I. Industrialization in a Context of Early Franchise Extension and
Associational Development 89
Mutual Acceptance of the Peak Associations 91
The Unions' Tradition of Solidarity 92
2. Class Conflicts and Business' Political Role During the Interwar
Period of Party System Instability 94
Alliance-Building by the Left 94
Traditions of Investment Channelling 96
The Fedrelandslaget 97
Decentralized Party Finance 98
Support Transfer Limits 99
3. Political Socialization Patterns and Values of Norwegian Entrepre-
neurs 101
Early Reactions against Employers' Abuse of Powers 102
Businessmen and Labour's Economic Policies 103
Keeping Organizational Power Latent 105
B. The Contemporary Experiences of Libertas as an Exception
that Proves the Rule
107
I. The Founding of Libertas in 1947 and the Circumstances of Its
Retreat from a Conveyer Role 107
The Reticence of the Peak Associations If· 108
The Shipowners' Initiative lj~ 109
Libertas' Activities ~~ I I 1
Labour Prompts an Official Investigation III
Libertas Discontinues Party Finance " 113
2. The Low Utility of Financial Supports in the Context of Party
Mobilization and Recruitment Processes 114
Strength of the Party Press 115
Inexpensive Campaign Techniques 116
Party Defenses Against Outsiders 118
Ultra-Stable Voting Patterns 119
3. Libertas' Ambitious "Parallel-Action" Activities and Resulting)
Conflicts With Party Leaders 121
Trends in Party Membership 122
Expenditures by the Parties and Libertas 123
Aid and Discomfort for the Conservatives 125
De Lange's Call for "The Will to Power" 127
X TABLE OF CONTENTS
4. Libertas' Indirect Contributions Toward Reintroducing Effective
Competition to Norwegian Politics
12~'
The Impact of Cross-Pressures 130
Labour's Achilles' Heel 131
Disclosure and Party Finance 134
Labour's Loss of the 1965 Elections 135
Forming the Coalition q7
PART IV: JAPAN
by FCL
How Even a Giant Conveyer is Limited in its Impact
on Japanese Party Politics by the Timidity of the
Self-Effacing Entrepreneur
A. The Historical Pattern of Japanese Business Behavior in
Associations 130
I. Slow Development of the Japanese Associational Structure Is Due to
Conscious Reliance on Informal Dependency Relations 140
Early Business Associations 141
Early Labor Associations 143
Government Intervention 146
2. Entrepreneurs Reincorporate Some Feudal Practices in the Most
Modern Business Organization 148
Organic View of Society 148
Feudal Carryover 150
Concentration Pattern 152
Investment Channeling 154
Intra-Organizational Relationships 155
3. The Big Zaibatsu Combines Tend to Dominate the Political As Well
As the Economic Organization of Business 156
Traditional Nature of Political Financing 156
Leader-Maintenance Groups 156
Zaibatsu Sponsors 158
Parallel Action Organization 160
Anachronism of Business Behavior 161
4. Political Socialization Makes the Leading Entrepreneurs Take A
Diffident Self-Effacing Role in Party Politics 161
Youthful Experiences 161
Young Adult Experiences 163
Middle Age Experiences 166
Later Middle Age Experiences 167
Present Attitudes 167
TABLE OF CONTENTS XI
B. The Contemporary Experience of More Higly Specialized
Business Organization 169
I. The Federation of Economic Organizations Establishes a Money
Conveyer to Finance Greater Conservative Party Unity and Strength 169
The Limited Role of Postwar Business Associations 170
The Weakness of Labor Associations 172
The Alarming Decline of the Pro-Business Conservatives After In-
dependence 174
Business Establishes a Conveyer to Finance Conservative Union 176
2. The Failure of the Kondankai Financing to Change Political Attitudes
and Behavior 179
Party Financing By the Small Japanese Sponsors and Conveyers 180
The Kondankai's Financing Is Too Influenced by Existing Methods 182
Use of Conveyer Funds 183
The Questionable Utility of the Conveyer at Its Height 186
3. Conveyer Support Produces Only Formal Party Unity Rather Than
a United and Popular Conservative Party 189
Business Pressure For Party Union and Reform in 1955 189
Hesitant Business Intervention in Party Leadership 192
Kondankai Stops Short of Bringing Internal Party Unity 194
New Method of Party Financing Replaces the Kondankai 197
4. The Limitations of the Conveyer Illuminate the \Veakness of the
Japanese Party System 199
Separation of the Spheres of State and Economy 199
The Weakness of Disclosure and Electoral Laws 202
The Provocative Financial Relations of Parties and Business 204
PART V: COMPARATIVE ANALYSES
How National Party and Interest Group Patterns
Affected the Efficacy and Viability of Conveyers
A. Factors Affecting Involvement of the Associational Tiers
and the Participation of Member Firms
206
Varying Support Transfer Models 207
"Defensive" and "Offensive" Goals 208
Membership Solidarity 210
Peak Association Involvement 21I
B. Characteristics of Electorates and Persuasion Techniques
Which Shaped the Utility of Financial Supports
213
Sources of Party Campaign Supports 214
The Partisan Identification of Voters 216
Political Communication Techniques 217
