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Business and Politics

Editor-in-Chief: Aggarwal, Vinod K.

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Volume 16, Issue 1 (Apr 2014)


The politics of small business organization, partisanship and institutionalization: similarities in the contrasting cases of Japan and the US

James Babb
  • Corresponding author
  • Senior Lecturer in Politics, Department of Politics, University of Newcastle, 40-42 Great North Road, Newcastle upon Tyne, NE1 7RU, England, UK
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Published Online: 2014-03-21 | DOI: https://doi.org/10.1515/bap-2012-0036


Partisanship and institutionalization are more important to group formation and dynamics than is often recognized in the literature on interest groups. This study examines the contrasting cases of small business group formation and dynamics in Japan and the United States to demonstrate how opposition to the party or parties in power was crucial to the timing and nature of the largest small business organizations formed in both countries. Parties are also important to subsequent developments in the organization and institutional interactions of the sector. It is these processes which explain the divergent outcome whereby the US small business sector is identified with the political right and the small business in Japan with the political left.


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About the article

Corresponding author: Dr. James Babb, Senior Lecturer in Politics, Department of Politics, University of Newcastle, 40-42 Great North Road, Newcastle upon Tyne, NE1 7RU, England, UK, Tel.: +44 (0)191-222-8825, e-mail:

Published Online: 2014-03-21

Published in Print: 2014-04-01

“Disaster-hit small businesses can carryover gov’t grants until next year,” Japan Press Weekly. 15 December 2012. Available from: http://www.japan-press.co.jp/modules/news/index.php?id=4684.Accessed 9 October 2013.

Lawrence (2013).

The classic statement of “rugged individualism” can be found in the 1928 campaign speech by Herbert Hoover (Hoover 1928). For a more recent example see Bonnen (1992: p. 195). This would explain the difficulty of small business in forming a successful national organization until World War II. In contrast, the tendency of Americans toward association was noted most famously by de Tocqueville 2000, and more recently in the so-called “neo-Tocquevillian” literature such as Putnam 1995. This suggests that Americans tend to form groups and associations more frequently and spontaneously than others and this is the basis of the success of American democracy.

Truman (1951).

Olson (1965).

Salisbury (1969).

Walker (1991).

Pendleton (1931: p. 690).

The postwar Chambers of Commerce and Industry in Japan had its legal status enshrined by special law when the group quit an alliance with the federation of large business groups, Keidanren, in 1955. The central government seconds senior bureaucrats to occupy key post in the Chambers of Commerce. Even if the Chambers themselves have local offices throughout Japan and many small firms participate and benefit from them, small business is not represented much as the top levels of the organization and its influence is relatively weak: See Babb (2001: p. 125).

McMillan and Woodruff (2002: p. 165).

Gale (1994: p. 716).

Trzcinski and Finn-Stevenson (1991: pp. 448–9).

Reisinger (1997: p. 523).

Krecker and O’Rand (1991).

Young (2008).

Young (2008: p. 440). On “niche theory” see Browne (1990), Gray and Lowery (1996), and Heaney (2004).

See, for example, Heaney (2010), Koger, Masket, and Noel (2009), and Skinner (2004).

Nord (1986: p. 350).

Morris (1993).

Winkler (1976).

Tipton (1979).

Veugelers (2000: pp. 24–5).

Form (1982).

Maruyama is cited approvingly by Shioda (1979: p. 258). This is backed in another case study Mori (1981).

Hari (1992: p. 101).

Ibata-Arens and Ōbayashi (2006: p. 139).

The following paragraphs are drawn from earlier research in (Babb 1996: pp. 150–76).

Sakano (1948: pp. 68–70).

Ishikawa and Yamaguchi (2010: p. 63).

Shindō (1976) and Zenshōren History Editorial Committee (1961). The tendency of the official and semi-official histories of Minshō to put an emphasis on the major role played by the relatively small Japan Communist Party betrays the political orientation of the group.

For a bold and classic statement of pre-war/post-war continuity in the business community see Dower (1990) but for a more nuanced and detailed treatment of history and trends in the relationship between big business and political parties see Babb (2001, 2002).

The term “Dōyūkai” is a notoriously difficult to translate. It is literally, “association of friends” but this does not have the same nuances as in the Japanese so it is left untranslated by most scholars.

One example given for Kyoto in the 1970s was that tax returns form Minsho members were not looked at too closely, see Steiner (1980: p. 405). Under Japanese law, civil servants cannot become political party members but the Japanese Communist Party has a long history of maintaining secret membership among Japanese civil servants.

Japanese electoral studies clearly demonstrate the historical tendency of the smallest and least financially viable firms to support the left. See Rōyama et al. (1955: pp. 37–8), which is the earliest and mentions Minshō specifically, Horie and Iwao (1978: pp. 71–91), and Mitake (1985: pp. 181–5). The small numbers used in each study and lack of specificity of type of interest organization limits one’s ability to generalize the findings completely, however.

Japan Socialist Party, eds. (1990: p. 308).

Blackford (2003: pp. 91–100).

For a short official history of the organization, emphasizing the entrepreneurial roots of the organization and its opposition to the government of the time, see http://www.nsba.biz/docs/70thprogram.pdf. Accessed 22 November 2010.

These facts on National Federation of Independent Business are drawn from the organization’s website: http://www.nfib.com/about-nfib. Accessed 22 November 2010.

Young (2008).

Young (2008: p. 438).

Young (2008: pp. 445–7).

Young (2008: pp. 449–51).

Amongst the numerous studies to support the notion of such an alliance are Hamby (1972), Koistinen (1973) and McQuaid (1978).

Dicke (1996: p. 14).

A good case study of how this was done can be found in Shermer (2008).

Blackford (2003: p. 134).

Young (2008: p. 41).

DiBacco (1967: p. 24).

Quadagno (2004: p. 31).

Quadagno (2004: p. 34).

See, for example, Neustadtl and Clawson (1991: p. 227).

Kumar and Grossman (1986: p. 99) and Jenkins and Eckert (2000: p. 317).

Davidson (1996: p. 39).

Young (2008: p. 457).

Blackford (2003: pp. 134–5).

Trow (1958).

Lipset (1955) and (1959). It should be noted that the political scientist John Bunzel, however, presented a more favorable picture of small business in his work in the same period, though the conservative tendencies of small business are confirmed (Bunzel 1956, 1962).

Calder (1988: pp. 312–48).

Ibata-Arens and Ōbayashi (2006: pp. 141–2).

Peck, Levin and Goto (1987: p. 121).

A short official history of the National Business Association can be found at: http://www.nationalbusiness.org/NBAWEB/General/about.htm. Accessed 22 November 2010.

A short official timeline summarizing SCORE’s history can be found at: http://www.score.org/milestones.html. Accessed 22 November 2010.

It might be noticed that this organization was already called Zenchūren in 1974, but subsequent name changes and then the merger in 1986 led to a resurrection of this name. The 1974 Zenchūren is called old Zenchūren and Zenchūren is the name of the organization from 1986 to the present day.

Ishikawa and Yamaguchi (2010: pp. 245–58).

Current data from “Zenshoren to wa.” Official website of the Zenkoku Shōkō Renmei at: http://www.zenshoren.or.jp/shoukai/index.html. Accessed 6 August 2013; past data from Calder (1988: p. 345). The numbers given Calder cannot be independently confirmed but the scale of the decline is clearly dramatic by all accounts.

Japan Socialist Party, eds. (1990).

A short official history of the organization can be found at the following web address: http://www.nase.org/About/HistoryOfNASE.aspx. Accessed 22 November 2010.

Howard County Democratic Party (Maryland) (2006).

“Minority business issues need a voice,” Milwaukee Journal Sentinel, 13 February 2008. Democratic Party has historically supported minority small business (see Democratic Party 1980 for example) so the question must be asked if in recent years there has been a more concerted strategy to woo small business or that opposition to the existing government has consolidated more small business support behind the Democratic Party. It has also been argued that the demographics of minority support is changing and creating a need to take the issues of small business more seriously. See for example, “Black Caucus shows constituent changes,” Washington Times, 6 May 2005, and Harris (2010).

http://www.democrats.org/about/bio/gov_tim_kaine. Accessed 18 October 2010.

H.R.4818: Small Business Reform Act of 2010 and H.R. 5297: Small Business Jobs and Credit Act of 2010.

Berman (2010).

“Why Business Doesn’t Trust the Tea Party: The Tea Party’s small-government slogans may be appealing, but its policies could throw the U.S. economy into chaos,” Business Week, 13 October 2010.

NFIB endorsed Tea Party candidates in the 2010 election cycle include Mike Lee (Utah), Tim Scott and Nikki Haley (South Carolina), Paul LePage (Maine), Sharron Angle (Nevada), Jesse Kelly (Arizona), Jeff Landry (Louisiana), Ken Buck (Colorado). At the same time, two NFIB endorsed candidates lost to Tea Party candidates (Alaska Senator Lisa Murkowski and Carly Fiorina, senatorial candidate in California).

Citation Information: Business and Politics, ISSN (Online) 1469-3569, ISSN (Print) 1369-5258, DOI: https://doi.org/10.1515/bap-2012-0036.

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