Oh good, something I can put my actual major towards, rather than my hobby!

It really depends heavily on what you mean by the "mixing of American government and corporate interests". Do you mean are levels of corruption better or worse? Or do you mean the success of business in lobbying government? Because, believe it or not, the two are defined very differently depending on where you stand.

What I'll talk about is what I think you're really after: the division of power between business and labor and their control over the government.

First, a brief breakdown of theory. There are multiple ideas related to political theory based on how business, labor, and the government interact (if at all). You might take the point of view of Weber, who defines a state as deriving its authority from three ideal-types, none of which require necessarily business interests. At the same time, you might see the state as some Marxists do, as nothing more than an instrument of business interests, constantly acting in that way (if this were the case, that'd be the answer to your question). But another form of Marxist view, one I find helpful to imagine the interplay of influence in a simplified way, is the structural view. Don't get me wrong, I'm not a Marxist, but I do find this imagined structure helpful.

Business interests do not control the state, but they do wield heavy influence over it, and always have. The state's power structures are broken down into labor, business interests, and a third class: the managers of the state apparatus. These are the politicians.

The argument thus goes that business interests wield influence over the managers generally speaking because business confidence is crucial to the state. It doesn't necessarily matter whether this is perfect economic theory: the idea is that the managers of the state are still afraid of losing business, because that would harm the quality of life, employment, etc.. And it's clear that politicians have always catered some to businesses in general: view the ideas about corporate taxes and the need to lower them over time, the ideas about capital gains taxes (which the wealthy primarily pay), and the like.

There's an important caveat to this idea, which is when business confidence can be ignored. There are at least three times it can: in times of war, major depressions, and during post-war reconstruction periods. During wars, business confidence doesn't matter: patriotism is required, international business flows are less crucial than military survival, and the same goes for domestic business production that isn't military-related. In depressions and post-war reconstruction, popular demand grows incredibly strong while businesses are weak. After all, who cares if business confidence declines if the people revolt? As such, business interests can be rolled back.

To read more about Max Weber, pick up Politics as a Vocation, an essay by him.

To read more about this Marxist structuralist argument, and its critique of instrumentalism, look up Fred Block's "The Ruling Class Does Not Rule", and read up on his debate with Domhoff after.

Now that we've gotten past the theory idea, it's time to look more closely at the facts. I'll focus on the twentieth century in this particular case, because I think it's instructive. A good book on this is The Fracturing of the American Corporate Elite by Mark Mizruchi.

Mizruchi essentially details the divergence between business and labor, and the effect that it had on the American political system, by discussing the shift that began in the 1970s. Until the 1970s, and after World War II, the economy had been extraordinarily strong. There was little competition, gasoline was plentiful, inflation was low, and unemployment stayed low more often than not too. Times were good for business owners, which had essentially adopted a pragmatic view: we have no reason to innovate currently, but we can accept some regulation and keep our legitimacy as good forces, because that's more important.

However, this did not last. The recovery of Japan and Germany led to their growth and subsequent competition in high-quality manufacturing. The war in Vietnam began, and President Johnson's ambitious War on Poverty did too, driving up government spending. While small industries (like steel) had experienced the competition as early as 1959, there was finally a breaking point at which businesses began to feel that they were losing too much profit. Though hardly anyone had opposed the establishment of the Environmental Protection Agency and the Occupational Safety and Health Administration when they were first created, opposition began to grow vehemently. Businesses were beginning to face not only competition, but also bad press: American institutions were under attack after Watergate, and any establishment group (including business, as seen by the anti-business movements that coupled with anti-war ones) suddenly was a lot less trusted. And with that came the fear of business that they were being shut down by excessive regulation.

While the fear of regulation was primarily felt by small business owners, it reached large CEOs as well. In 1977, the head of Morgan Stanley described a case where Dow Chemical tried to build a petrochemical plant on the Sacramento river, saying it had failed because 65 permits were required from 12 agencies at various levels. Regulations, even necessary ones, began to be seen as onerous and arbitrary, and some business owners complained that OSHA acted more like mobsters than regulators. The divide had begun to grow.

Couple this with the competition, and with the other thing I mentioned, which was a decline in the legitimacy of business. It wasn't just an outgrowth of the anti-establishment movement, there were also shocking examples of pollution and regulation problems that shocked the public. Silent Spring came out in 1962, an environmental science book that helped the environmentalist movement. Ralph Nader wrote Unsafe at Any Speed in 1965, ruining the reputation of the Corvair and helping establish the National Highway Traffic Safety Administration. Then the Cuyahoga river in Ohio caught fire, prompting even more environmental activism. And this all came down hard on businesses.

So businesses, of course, began to do what they believed was best to fight back. During the 1970s there was a huge growth in business-funded groups, lobbyists, and more. The great capitalists of the twentieth centuries - Carnegie, Ford, Rockefeller - had left foundations that were donating to increasingly liberal causes, and business was not seeking to work with those types of groups. While some businesspeople were unsure if they should begin to lobby harder for their profits, others were certain. This certainty was helped by what is now famously called the "Powell Memo", which was written in 1971 by Lewis F. Powell Jr.. Powell was actually appointed to the Supreme Court by Richard Nixon a few weeks later. He had intended his memo to be confidential, but it was leaked a few weeks after he wrote it too. In the memo, he wrote about his fear that the country was becoming too hostile to business, and he condemned business leaders by responding with "appeasement, ineptitude, and ignoring the problem". As such, he encouraged businesses in the memo to begin building a public relations structure that would fight attacks on "free enterprise".

While Powell didn't "trigger" the movement by business, he certainly helped structure it and it was a watershed moment. Business mobilized faster, and began to grow its lobbying and think-tank structures greatly. Take, for example, the American Enterprise Institute (AEI). Founded in 1943 as the Johns Manville Corporation, it had always been devoted by businessmen to advocating for free market economics. It was renamed to the AEI in the 1960s by a president who anticipated that the conservative perspective would need it to counter liberal mobilization. During the 1960s it grew rapidly, though conservatism had yet to really take hold in the political discourse of the 1960s. In the 1970s, it became heavily influential. It increased its budget tenfold between 1970 and 1980 through a fundraising campaign, ditched any token liberals in its "fellows" (who were scholars dedicated to writing on its behalf, and were paid to do so, as most think-tanks work), and it began receiving funds from over 600 corporations, including leaders of Citibank, Hewlett-Packard, and Chase Manhattan.

The AEI began to sponsor what is now called "supply-side economics", which was extremely business friendly policy. But even it was seen as too limited and "respectable", and conservatism looked for another champion to fund academic debate that would support business interests. This came in the form of the Heritage Foundation, founded in 1973. It was founded with a $250,000 grant from Joseph Coors, the one who headed Coors Brewing and was the grandson of the founder. The founders of Heritage then got help from other wealthy donors after the relationship with Coors soured, such as a total of over $3.9 million over the next eight years from Richard Mellon Scaife (heir to the Mellon fortune in oil and the like). Heritage was far more militantly conservative than AEI, and it showed. Now, the debate moved from economics to lobbying.

CONTINUED BELOW