Party time: how entrepreneurs are changing the political face of America

Entrepreneur, August, 1996 by Janean Chun

MID THE talk of anti-this and pro-that, political debate runs high. And yet, when it comes to political parties, perhaps no one is as strongly divided as are entrepreneurs.

In recent elections, entrepreneurs have been more apt to vote Republican than any other major occupational group, according to Michael Hout, a sociologist at University of California, Berkeley, who, with Clem Brooks of Indiana University and Jeff Manza at Penn State University, analyzes scholarly data on American presidential elections. The self-employed "have become one of the anchors of the current Republican coalition," says Hout, who surmises that "small business is one of the most powerful groups in the country."

Entrepreneurs are "a larger force than the labor movement in terms of raw voting power," agrees Morley Winograd, co-author of Taking Control: Politics in the Information Age (Henry Holt) and founder of the California Democratic Leadership Council.

According to Hout, the 1964 race between Lyndon B. Johnson and Barry Goldwater marked the last time the self-employed were evenly split on a candidate. Since then, no Democrat has been able to wring support from more than 30 percent of entrepreneurs. "Among the six classes of workers we've looked at, it was the self-employed who have gone from the middle of the road to being the strongest Republicans," Hout says. The upcoming election promises to be no different: A recent Los Angeles Times poll found that while Clinton led Dole by 18 percentage points among the overall population, Dole led Clinton by 19 points among voters who were self-employed or owned a business.

Yet, though devoutly Republican, most self-employed people are apparently less dedicated to GOP ideologies than they are to the idea of economic self-interest. "The main factor in the shift of the self-employed toward [voting] Republican has been an aversion to government regulation that began to develop in the mid-'60s," says Hout. "Goldwater and some other Republican leaders drew their attention to it, and so they've come to associate their own aversion to government regulation with Republican policies."

Winograd points out that, by nature, entrepreneurs bristle at the thought of any outside control, much less government control. "They [want] the government to get out of the way," he says.

"There are just two very different orientations," says Dean Sager, aide to the House Small Business Committee's ranking Democrat John LaFalce. "So the question is which one is more important, the knee-jerk 'I'm against taxes and regulation,' or 'we're here to help you grow and find opportunities.'"

Considering the real reason many entrepreneurs pledge allegiance to the Republican party, Winograd believes political power could be snatched up by anyone who focuses on alternative solutions. "Should either party or a third party pick up the banner of more marketplace incentives to solve regulatory problems," he says, "they might have the chance of winning the votes not just of entrepreneurs but of many others in the new constituency."

Just how much political power entrepreneurs exert "will depend on several factors, including whether more than one political party speaks to their issues," Winograd adds. "Obviously, if only one does, and entrepreneurs hear and respond to it, that'll make a significant difference in the outcome of an election."