I. INTRODUCTION
American business organization is puzzling. While most other advanced industrialized
nations created a single peak employers’ association to represent business interests, the United
States create two self-identified peak organizations within 15 years. From its earliest days,
American business organization was marked by fragmentation and redundancy; and although
firms often exercise enormous political power in areas of immediate concern, American
employers lack a solitary, hegemonic peak association to organize and to represent their
collective concerns in the political realm. Thus one wonders why multiple umbrella employers
organizations developed in the United States at the beginning of the Twentieth-Century when
other countries were beginning to consolidate their business representation into a single, all-
encompassing national organization.
Also puzzling is the rather bizarre early trajectory of the first of these business groups,
the National Association of Manufacturers (NAM). NAM began its life utterly fixated on one
policy goal, the reciprocal tariff, yet within eight years switched its single-minded commitment
to a very different ambition, that of fighting labor.
I argue that the pattern of business fragmentation reflects the limits of the American party
system: the lack of a dedicated business party created a representational gap that was filled by
highly-politicized business groups, and the undue politicization of these groups subsequently
limited their perceived legitimacy and capacity. The pattern of major two-party competition
worked against the formation of a dedicated business party: two-party systems aggregate
interests more broadly than multi party systems and cannot concentrate on all of the issues of
groups created by class, ethnic, and religious cleavages.
Early suffrage also worked against the
development of a dedicated business party, because it removed from the political agenda an issue
that elsewhere inspired social democratic party organization and left employers no social
Convention