Unit 2
The Business–Government–Society Relationship: The Foundations of Business Power and Influence

Introduction

Unit 2 explores the underlying and sometimes shifting nature of business, government, and societal relationships. It considers the nature of liberal democracy within capitalist society and the tensions that exist between the values of democracy versus those associated with capitalism. Contending theories on the role of the state in capitalist society are examined in relation to the question of business power and influence. The Brownlee readings offer a detailed consideration of elite theory in relation to Canadian society and politics.

In Canada, especially in comparison with the United States, the state has played a very active role in building the economic infrastructure for the nation. The statist orientation of Canadian capitalism (also sometimes referred to as the “Business-Nation”) is explored in some depth in this unit.

Finally, the unit considers the transition from a public policy agenda guided by a Keynesian approach to that governed by neo-liberalism. In particular, the question of the increasing influence of corporate power on the state under this new neo-liberal policy regime is addressed.

Learning Objectives

When you have completed Unit 2, you should be able to achieve the following learning objectives.

  1. Define the major features of liberal democracies
  2. Explain the tensions between the values of market capitalism and those of political democracy
  3. Describe how business interests have come to occupy a privileged position of influence in Western democracies
  4. Outline why, historically speaking, Canada has sometimes been regarded as a “Business-Nation”
  5. Understand some of the different and contending theories concerning the nature and role of the state in capitalist society
  6. Explore the idea of elite theory and relate it to the debate regarding elite unity and influence in the Canadian context
  7. Explain what is meant by the concept of neo-liberalism
  8. Examine the role that Keynesian ideas have played in shaping public policy in the twentieth century
  9. Describe the post-war social contract
  10. Explain why the Keynesian welfare state fell into a state of crisis and became susceptible to a neo-liberal challenge