Why do U.S. companies and workers within particular industries that are harmed by trade tend to have more political influence that the consumers who benefit from this trade? Do U.S consumers have a...

Why do U.S. companies and workers within particular industries that are harmed by trade tend to have more political influence that the consumers who benefit from this trade? Do U.S consumers have a good understanding of how they benefit from trade?  Are they a cohesive political lobby?

Asked on by cathy-cobb

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

There are at least three reasons why the companies that benefit from trade barriers are more influential than the consumers who benefit from trade.  Let us examine them.

The first reason has to do with something that the question points out.  This is the fact that not everyone realizes how trade has helped them.  When we go shopping, we know that our goods are largely made outside the country and that bothers us.  We also know the price that we pay for the imported goods.  But we do not know what we would have paid if the goods had been made in the US, or if there had been tariffs in place.  Therefore, we do not know how much we are saving.  This means that we are not strongly motivated to push politicians for free trade.

The second reason is also connected to something the question points out.  The question asks if consumers are a “cohesive political lobby.”  They are not and they never really can be.  Essentially everyone in the United States is a consumer.  There is no way that everyone in the US can be part of one cohesive interest group.  The people of the US are divided on so many issues that it is not conceivable that they could ever join together for any sort of long period of time on a given issue.

Finally, companies have an inherent advantage when it comes to lobbying politicians.  Companies typically have a great deal of money.  They have much more money than something like a consumers’ group would have.  Companies are also much more likely to be cohesive because there are relatively fewer companies and it is therefore much easier to maintain cohesion between their leaders. 

For all of these reasons, the companies tend to have more political influence than consumers do even though there are more consumers than companies.

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