Andrew Mendoza, Julian Paredes

POL 300-01

Professor Kim

September 20, 2021

Factors that Affect Big Businesses

What causes there to be support for big business? Big business has become an essential

part of contemporary society, through convenience and efficiency, at the expense of small

businesses. There have been companies who have merged with others or have brought out other

companies, and it is seen that there is less and less competition as time passes by. An example of

this are Internet Service Providers. There were several companies who were in competition, such

as AT&T, Sprint, T-Mobile, Verizon, Metro, Boost and several more. In recent years, it has been

seen that companies like Metro and Sprint, have become a part of T-Mobile. So, how do big

businesses get support from people, as they seem to eliminate competition and attempt to

monopolize the markets they partake in? As will be explained in the paper, an individual's views

on big business are dependent on multiple variables such as income and political ideology. With

these variables, there are questions such as why are people with higher income likely to support

big businesses? As well as why are people with a conservative political ideology warmer and

support big businesses?

Literature Review

In this paper, there are two schools of thought. One that asserts that income is the primary

variable when it comes to how people support big businesses. Another, is one that explains how

ideology is the primary variable instead of income. Each goes into depth as to how some

researchers and scholars have spoken about each school of thought.

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According to a paper written by The American Psychological Association titled

American Business Ideology, investigated whether there were any core principles that unified

workers across the private industry, and from a variety of fields from Aeronautics to Banking and

food service. According to the data that the organization collected, overall laborers within the

private sector favored lower taxes and generally came to view inflation as a positive thing as it

led to more consumer spending. The paper goes on to delve into a particular case study that of

George Romney, “in his corporate career, has moved from a high position in a monopoly of the

1930s, the Aluminum Company of America, to chief executive from 1954-1962 of the weakest

contemporary automaker, American Motors... When Romney was Alcoa's lobbyist in

Washington during the thirties, one biographer described him and his associates as arguing that

Alcoa was ' a good monopoly. This is a far cry from the Romney of the 1950s, the champion of

the little company who said that this country needs at least five automobile companies...I know

what happened to the aluminum industry as a result of the government creating five companies

instead of growth and progress has been tremendous. If the nation needs at least five aluminum

companies, it certainly needs at least that many car companies.” (Seider, 814). The article

suggests that when people are in a more consolidated position of power they are more likely to

lobby in favor of staying in that position. Romney would argue that monopolies were good when

he was in charge. Yet, as soon as he joined a company that was smaller in terms of market

domination, he lobbied that there needed to be more competition among automobile companies

by having the government regulate bigger companies.

When it comes down to it, humans generally by nature are willing to compromise their

ideals or exploit loopholes in a capitalist system to gain as previously mentioned in the case of

George Ramnsey. This connection between an economic lens and society is described in
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Inequality and the global economic crisis. The author claims “two of the dominating

characteristics of today's capitalism : commodification and competition. When almost everything

has a price, almost everyone will have a price. After all, as we have learned to believe that

competition is an acceptable and ongoing basis of social existence and that ‘It's each for himself

and God for all’, it becomes more likely to see others as opponents rather than as fellow men

and women ''(Dowd 74).

Small farmers see big corporations as necessary evils, as they have to rely on their

contracts in hopes of making money, yet the contracts that they are handed leave the small

farmers having to accommodate to the contractors every desire and whim. This is explored

within a book titled Small Farmers Big Business describing how “Small farmers may see

contract farming as a way to overcome some of their traditional problems... they face

competition from producers who have adopted new technologies... Access to credit is difficult.

Contract farming has the potential to overcome these problems”(Glover, Kusterer 2016). Small

farmers are already disadvantaged when it comes to competition from bigger farms. They often

feel as though contract farming, which puts them in servitude to a corporation, is their only way

to secure a living wage. This relationship between laborers and those who own the means of

production, helps perpetuate the negative association the working class have with larger scale

operations.

Another school of thought within the paper advocates that political ideology is a variable

that influences one’s feeling towards big business. A conservative individual might advocate and

show warmth towards big business and a liberal individual would be less inclined to support big

business. Specifically, a conservative ideology would support big businesses due to wanting to

preserve one’s success in that specific market. Feinman (2005) has explained that those who lean
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right tend to believe that people rely too much on the government and often don’t try to be

individualistic. With this being in place, it does show support for big businesses in that it is an

alternative to depending on the government. He further explained how conservatives tend to

rewrite the way common goods are distributed. This seems to give an idea that those in big

corporations are doing a good by privatizing the common goods and not letting the government

be in charge of common resources.

This is in contrast to what the other side believes. A liberal’s political ideology is that it is

big businesses that people have become too dependent on. When explaining an entrepreneur who

is attempting to start their own business, Bunzel (1956) spoke about this and explained that he

would see people become too dependent on big corporations. May (2011 p. 33) has added to this

by explaining how big corporations decide on how resources are handled and how much. They

can also dictate on how the market will be structured and essentially every detail that will affect

everyone and the day to day lives they have.

So with the examples presented, there are views that those with conservative political

ideology tend to be warmer to big businesses, as they see them as an alternate source, in which

the government won’t be in control of all the common goods and services. Those within the

liberal point of view tend to have colder feelings towards big business as it is seen as an entity

that tends to hoard what it can and it discourages small businesses, as they see how big

corporations are depended on in one’s daily life. This proves that political ideology is a valid

variable that can determine how one feels towards big businesses. The flaw in this variable is

that there are those who can still support small businesses while having conservative political

ideology. Especially if they tend to like small group communalism, they would tend to support

small businesses. In this variable, there are some factors that would need to be considered.
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Theory and Hypothesis

One theory within the paper suggests that income is a variable when assessing an

individual’s feelings towards big business. Since people who are more wealthy tend to favor

efficiency, convenience and are more inclined to profit from big business as opposed to mom and

pop retailers. As a result, it is reasonable to assume that a person’s wealth may determine their

feelings of warmth or favorability towards big business. On the other end of the spectrum, people

in the lower class are less likely to have warm feelings towards big business, as they see big

business as profiting off of their labor for cheap which does not allow for social mobility.

In the case of the wealthy, whether the wealth is “new money” or the result of an

inheritance, one thing will remain the same, the desire to grow or at least maintain that wealth, so

one can pass it on or donate and be remembered as philanthropic. Big Business as in

conglomerates or corporations, can be seen as an apparatus in achieving that goal. Savings

accounts, while having their place for consolidating wealth in a more liquid form, are not great

yielders in high returns for investors compared to investing in stocks. Opportunities to invest can

only come once one’s needs have been fully met. Needs being housing, food, utilities, and

entertainment, once those needs are met, leftover money may be used to be invested, and the

more leftover the more that can be invested increasing returns exponentially. The mechanisms in

place within big corporations make them appealing to the wealthy who are more likely to own

shares or be in charge of said companies and most likely to profit from them in the form of

investment.

When it comes to the working class, people who have to work to make ends meet to

provide for themselves and their families, are more likely to sell their labor as employees and

rely on their wages to make ends meet. For this reason, many people who consider themselves
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working class may be less inclined to be favorable towards big business even if they ultimately

have to rely on them due to convenience or price. Considering the extent to which big business

strives to maximize profits, it is easy to see how administrators may put profits over their

employees' well-being and happiness. An example of this may be Amazon. Becoming a monolith

of a corporation and making its founder the richest person in the world, it is not hard to find

someone who disapproves of their treatment of employees or predatory business practices that

have put many mom-and-pop shops out of business. Yet many working-class people may have to

resort to using Amazon as it is extremely convenient and oftentimes more affordable than a

smaller business that cannot sell the item at the same price without it being unprofitable. Big

Business is often making a profit off the working class whether it be from their labor or from

their business. Even if they may be their employers and supply their wages, some may be putting

back into the same company, yet aren’t likely to make a profit as they cannot afford to invest.

Another theory within the paper suggests that political ideology determines one’s support

for big business. Political ideology is a factor that determines one’s warmth towards big business,

especially if one leans conservative or liberal. If one has a conservative ideology, they tend to

support big businesses, versus one who is liberal tends to be against big businesses. If one is on

the left side of the political spectrum, they would be against big business due to not allowing

competition to occur in markets. An example of this can be seen in the central processing unit

(CPU) market. As of 2021, Intel remains to be in the top and has the most market share. AMD

has been rising little by little, but is barely at a 22.5% market share and Intel has about a 77.5%

market share. With these two businesses in the majority of the market share, there can be no

competition and entry for new entrepreneurs, since there is an overwhelming dominance from

Intel. Bunzel had explained that the starting entrepreneur is often depicted as the ‘little man’,
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being bullied and messed around by the big businesses. Big businesses tend to have advantages

in markets and have control of certain products, and those who lean left, prefer that certain

products be common goods for everyone to share.

Those who lean right tend to support big businesses, since those who worked hard to earn

their wealth through their inventions or through fighting the market, should be able to cherish

their accomplishment in doing so. Conservatives tend to believe and support individualism as

well as the free market, in which there is little to none government interference and regulations.

This would include belief in privatization of property, freedom in contracts and tort law. Most

conservatives tend to be capitalist and support a laissez faire economic system. This belief leads

to an individualistic ideology in which one’s success in business can be an example of the

‘American Dream’ in which their success should be untouched. What is meant by untouched is

linked to the laissez faire system where there is no interference from the government in the

markets and the businesses. With the collection of these beliefs that are prominent in

conservative political ideology, it can show how one’s political ideology does determine how one

feels towards big businesses.

With the variables explained, it can be argued that political ideology has an impact in the

way that one would feel towards big business. If one were to have a liberal political ideology,

they would not feel supportive of big businesses due to there being less competition and the way

it impacts how one would make their shopping decisions. Especially if there are few options to

choose from, with those choices being big businesses. If one were to have a conservative

political ideology, one would support big businesses. This remains so, as those with that ideology

have individualistic beliefs. These variables help show how one feels about big businesses.

Descriptive Statistics
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Summary of data for income:

0 1 2 3 4

8,793 8,399 16,607 13,849 2,690

17.46% 16.68% 32.99% 27.51% 5.34%

Reviewing the summary of the data, the survey has a sample size of 55,600 respondents,

when asked about their income on a scale of 0-4, 8793 respondents chose 0, 8399 for 1, 16607 in

2, 13849, 13,849 people for 3 and lastly only 2,690 for the wealthiest group of 4

Min 1st Qu. Median Mean 3rd Qu. Max Mode

0.00 1.00 2.00 1.866 3.00 4.00 2

By viewing the box plot, one can see that

the data for the independent variable income has a minimum of 0, the 1st Quartile was 1. There

is a Median of 2, with the average income being a 2. The 3rd quartile was 3, and a max of 4, and

a standard deviation of 1.156053. Since the range is so small, there is a hard time understanding

the distribution of the data using the standard deviation, but 68% of people lie between an

income level range of .72-3.02 by looking at the histogram, by using proportion table

(percentages), and density plots it is easier to see that the distribution of the data lies mostly

within 2 and 3.
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Favorability towards Big business:

Min 1st Qu. Median Mean 3rd Qu. Max Mode

0.00 40 50 53.47 70 97 50

In order to prove that an individual’s level of income affects their favorability towards big

business, and the hypothesis that the more income you have the more favorable you are towards

big business, the data for favorability towards big business should be reflective of the data for

income. By viewing a summary of the dependent variable that is people’s favorability towards

big business, one can see that there is a minimum of 0, and the first quartile of 40. The median is

50, with a mean of 53.47. The 3rd quartile was 70, the max was 97, and a standard deviation of

21.61, meaning that 68% of people’s favorability was 31.86-75.076. Due to the scale of the

variable being 1-100 it was hard to make a graph or proportion table that shows percentages

without further knowledge and skill of coding.

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Summary of data for Political Ideology:

According to the data that was provided, there is an observation to notice as to how the

variables are related and their relationship. The independent variable being Political Ideology

had demonstrated a summary of the following:

Min. 1st Qu. Median Mean 3rd Qu. Max. Mode

0.00 44.00 49.00 51.88 59.00 97.00 50

When taking a survey, the majority of the respondents had claimed that they were

moderate, with a slight shift towards a conservative political ideology. With the minimum value

being zero and the maximum value being ninety-seven, it created a range in which values closest

to zero were respondents who were most liberal and those values closest to ninety-seven were

most conservative.
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In the density plot, one can determine where the majority of the data is in this graph. One

can tell that the very narrow and steep curve is close to the middle of what is the survey

respondent’s political ideology. With the majority of the data being close to 50, one can say that

most of the survey respondents are moderate. There are slightly larger curves on the right side of

the graph which shows that while the majority of the data has moderate political ideology, the

data also has more respondents who lean conservative.

With the data showing a slight lean towards a conservative political ideology, one can

then look at the data of how the respondents would feel towards big business. There was a

minimum value of zero, which would show that there is no favorability towards big business.

The maximum value of ninety-seven would show that there is a favorability towards big

business.

Min. 1st Qu. Median Mean 3rd Qu. Max. Mode

0.00 40.00 50.00 53.47 70.00 97.00 50

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Looking into the summary from the survey respondents, one can see that there is a significant

shift towards the maximum value. With the data shifting towards the maximum value, it reveals

that respondents would have warmer feelings towards big business.

In this density plot, it is revealed that there is a significant majority of the data that shifts to the

right of the graph, meaning that there is a favorability towards supporting big businesses. The

highest curve close to the value of 50 indicates that the majority of the respondents had no

feelings at all towards big businesses. There are also a variety of big curves on the right that

show there was also a significant amount of the respondents that did show warmth towards big

businesses.

Part IV Bivariate analysis

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===============================================
Dependent variable:
---------------------------
f
-----------------------------------------------
income 0.070
(0.114)

Intercept 53.459***
(0.251)

-----------------------------------------------
Observations 28,007
R2 0.00001
Adjusted R2 -0.00002
Residual Std. Error 21.676 (df = 28005)
F Statistic 0.374 (df = 1; 28005)
===============================================
Note: *p<0.1; **p<0.05; ***p<0.01

By viewing the initial scatterplot it is clear to see that there is no correlation between an

individual’s income level and their favorability towards big business. As the different levels of

income have no clear set level of favorability that would suggest that the higher levels of income

favor big businesses more. By viewing the r squared variable and confidence interval it is clear

to see that there is absolutely little to no correlation between one's income level and their views

towards big business. The Y intercept suggests that someone with little to no income would be at

a favorability level of 53.45. The P value of .541 suggests that there is that any deviation from

the data has a 54% of being random. Which explains the T value being low at .612 and

reinforcing that there is no evidence against the null hypothesis. The confidence interval suggests
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that the data is between 52.96(-.1539 below standard deviation) and 53.95(.29 above standard

deviation), but there is no correlation between the two variables.

When looking at the Scatterplot above showing the relationship between political

ideology and big business, one can determine how a concentration of the data is towards the top

right indicating a positive correlation between the two. While the data does seem to be scattered

everywhere, there is a small trend that one can see. The values closer to 100 mean they are more

conservative and the 0 value determines how they are more liberal.

================================================
Dependent variable:
----------------------------
f
------------------------------------------------
ideo 0.286***
(0.007)

Intercept 38.482***
(0.408)
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------------------------------------------------
Observations 29,455
R2 0.047
Adjusted R2 0.047
Residual Std. Error 20.989 (df = 29453)
F Statistic 1,454.867*** (df = 1; 29453)
================================================
Note: *p<0.1; **p<0.05; ***p<0.01

The null hypothesis would determine whether there was correlation between Political

Ideology and Big Business. Specifically, if political ideology truly does show whether there is

support for Big Business. When calculating the value of the correlation, there was a ~0.22

correlation value which shows that there is some correlation between the two variables. One can

also see how the slope being 0.286, shows a positive correlation in a regression line. Also, with

r² being 0.047, it shows that while there is a correlation, the data is scattered and is not as close to

the line in the graph. This is evident just by looking at the graph, but it does explain how the data

is moving in a positive correlation but it is very scattered.

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As shown in the graph above, when inserting the equation as a line, there is an upwards

and positive correlation indicating that the correlation between the two variables is a positive one

and that overall, there is a correlation between the two. With this data, it is proven that political

ideology has a positive correlation and does determine whether there is support for big

businesses. As one is most conservative, one is most likely to support big businesses and if one

were to be more liberal, one would be less likely to support big businesses.

Conclusion

Setting out to find what causes support for big businesses, we look at two independent

variables and their relationship with the dependent variable. Those variables were both income

and political ideology and whether they both affect or just one were to affect support for big

businesses. Gathering our data from a sample size of 5,500 we formed two separate thesis

statements to see whether or not there was a casual relationship that explains support towards big

businesses. The two theories had hoped to answer the question of why people with higher

income are likely to support big businesses? As well as why are people with a conservative

political ideology warmer and support big businesses?

Starting off with the first thesis, we explored whether or not a person's income had any

effect on favorability. Figuring that the more money a person has, the more likely they are to

support a big business, seeing it as a potential source of expanding wealth. By analyzing Scatter

plots, and Bivariate collected in R, we concluded that there was no correlation between an

individual’s income and their favorability towards big business. Many external factors can lead

any person despite their wealth level to have differing views on conglomerates.

The other theory was exploring whether political ideology had an effect on whether there

would be support for big business. Specifically, if one were to be conservative, would they
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support big businesses?There was support from researchers who had supported the idea that

political ideology did have an impact on support for big businesses. Authors like Feinman and

Seider would agree that political ideology does determine whether one would support big

businesses. As the research and the data shows, there is a positive correlation and a relationship

between the two variables. The data showed that as one were to become more conservative, they

tend to feel warmer towards big businesses and as one were to become more liberal, they would

feel colder towards big businesses. The conclusion had then been established that political

ideology does indeed have an impact on how one feels towards big businesses.

R-Script:

rm(list=ls())

library(foreign)

setwd("C:/Users/julia/Desktop/POL 300")

setwd("~/Desktop/School/Fall 2021/Poli Analalysis/R:Rstudio")

dat <- read.csv("Pol300data.csv")

cat.table <- table (dat$ideo)

cat.table <- table(data.csv$income) #Create table

cat.table

prop.table(cat.table)

prop.table(cat.table)*100

summary(dat$ideo)

summary(data.csv$income)

dog.table <- table(dat$ideo)

dog.table <- table(data.csv$income) dog.table

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hist(dat$ideo)

hist(data.csv$income) #create histogram

hist(dat$ideo, main="Histogram: Political Ideology", xlab="Political Ideology", ylab="Number

of Respondents")

hist(data.csv$income, main="Histogram: Income", xlab="Income", ylab="Number of

Respondents")

dideo<- density(na.omit(dat$ideo))

dage <- density(na.omit(data.csv$income)) #create density

plot(dideo)

plot(dage)

plot(dideo, main="Density Plot: Political Ideology", xlab="Political ideology", ylab="Density")

plot(dage, main="Density Plot: Income", xlab="Income", ylab="Density")

bird.table <- table (dat$f_bbusiness)

cat.table <- table(data.csv$income)

Bird.table

cat.table

prop.table(bird.table)

prop.table(cat.table)

prop.table(bird.table)*100

prop.table(cat.table)*100

summary(dat$f_bbusiness)

summary(data.csv$income)

dino.table <- table(dat$f_bbusiness)

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dog.table <- table(data.csv$income)

dino.table

hist(dat$f_bbusiness)

hist(dat$f_bbusiness, main="Histogram: Support for Big Business", xlab="Support for Big

Business", ylab="Number of Respondents")

boxplot(data.csv$income, main="Boxplot: ", xlab="Income level 0-100", ylab="Number of

Respondents")

dbb <- density(na.omit(dat$f_bbusiness))

plot(dbb)

plot(dbb, main="Density Plot: Support for Big Business", xlab="Support for Big Business",

ylab="Density")

plot(data$Income, data$f_bbusiness, main="Scatterplot Example", xlab="Income Level",

ylab="Favorability towards big business")

plot(data$ideo, data$f_bbusiness, main="Scatterplot: Political Ideology and Big Business",

xlab="Political Ideology", ylab="Big Business Support")

cor.test(data$income, data$f_bbusiness)

cor.test(data$ideo, data$f_bbusiness)

mod1<-lm(f_bbusiness~income, data=data)

mod1<-lm(f_bbusiness~ideo, data=data)

View(mod1)

summary(mod1)

confint(mod1)

install.packages("stargazer")
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library(stargazer)

stargazer(mod1, type="text",

dep.var.labels=c("f_bbusiness"), covariate.labels=c("ideo", "Intercept"),

out="RegressionResult1.text")

stargazer(mod1, type="text",

dep.var.labels=c("f_bbusiness"), covariate.labels=c("income", "Intercept"),

out="RegressionResult1.text")

plot(data$ideo, data$f_bbusiness, main="Linear Regression Model: The Effect of Political

Ideology on Big Business", xlab="Political Ideology", ylab="Big Business Support")

plot(data$income, data$f_bbusiness, main="Linear Regression Model: The Effect of Political

Ideology on Big Business", xlab="income levels", ylab="Big Business Support")

abline(lm(f_bbusiness~ideo, data=data), col="red")

abline(mod1, col="blue")

abline(lm(f_bbusiness~income, data=data), col="red")

abline(mod1, col="blue")

References

Bunzel, J. H. (1956). Comparative Attitudes of Big Business and Small Business. The

Western Political Quarterly, 9(3), 658–675. https://doi.org/10.2307/444460

DOWD, D. (2009). BIG BUSINESS AND INEQUALITY. In Inequality and the Global

Economic Crisis (pp. 59–82). Pluto Press. https://doi.org/10.2307/j.ctt183p68j.9

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Feinman, J. M. (2005). The Conservatives, the Market, and the Common Law. Review of

Radical Political Economics, 37(3), 288–292. https://doi.org/10.1177/0486613405278155

Glover, D., & Kusterer, K. (2016). Small farmers, big business: contract farming and rural

development. Springer.

May, W. F. (2011). THE OVERREACH OF FREE MARKET IDEOLOGY: Business and

Government. In Testing the National Covenant: Fears and Appetites in American Politics (pp.

27–48). Georgetown University Press. http://www.jstor.org/stable/j.ctt2tt5c6.6

Seider, M. S. (1974). American Big Business Ideology: A Content Analysis of Executive

Speeches. American Sociological Review, 39(6), 802–815. https://doi.org/10.2307/2094154