#7 - Corporations and Democracy
The primary source of big money in First World countries is the control of consolidated and potentially immortal artificial entities -- corporations.
Great disparity in the wealth of citizens has been a problem for the conduct of democracy since ancient Athens. At the outset of the American experiment in democracy only wealthy males over 21 could vote. While the franchise has gradually been extended to a greater portion of the US population, it remains true that the wealthy are able to purchase more influence over government policy than average or poor citizens. Even more troubling, financially powerful artificial entities such as corporations, are also able to exert more influence on government policy than are ordinary citizens.
The problem with this is that the sources of this money do not share the same goals as most citizens. As Lawrence Lessig puts it in his latest book, “They Don’t Represent Us,” they don’t represent us. We can speculate that the concerns of extremely wealthy individuals are mainly aimed at increasing their personal wealth. There are certainly exceptions. There is, however, no debate that the interests of for-profit corporations are, by law, aimed at maximizing profit and they are not bound by moral or ethical concerns. Only laws prohibiting unethical or irresponsible behavior by corporation can provide a level playing field within which competition can take place without the competitors driving one another toward practices that maximize profits but harm the general public. Still, as such laws began to proliferate in the 1960’s the business world began to resist their implementation.
In 1971 the US Chamber of Commerce asked Lewis Powell to create a plan of action that would allow business a larger role in formulating government policy. Among other suggestions, he advised business to greatly expand the amount of money spent on election campaigns, particularly judicial campaigns. Big business did just that, and the amount of money spent on election campaigns has risen consistently since then. By 1983 when Ronald Reagan repealed the Equal Time Rule, the cost of running for office had driven candidates from both political parties to seek funding from big business. This was in keeping with the Republican Party’s traditional support for business. It was much more stressful for the Democratic Party, which had traditionally represented the interests of working people and unions. Propelled by the high cost of TV advertising, it was the revocation of the Fairness Doctrine by the FCC in Aug of 1987 that pushed candidates into the open arms of BIG MONEY. Both political parties raced to show how strongly they favored big business. Big businesses, focusing on their bottom lines, often funded both candidates in a race, ensuring they would have influence no matter who won.
Thus began the trend toward the current state in which the rules governing business are written by and for big business. In 2010, the Supreme Court’s decision in Citizens United vs FEC freed corporations to spend directly from their treasury to fund election campaigns. This was followed 6 months later by the decision of the D.C. Appellant Court in Speech Now vs. FEC that created Super PACs, allowing “independent” PACs to receive donations of unlimited size, often rendered anonymous by PAC to PAC transfers. The increase in campaign spending has been exponential since then.
What has followed and closely paralleled the increase in campaign expenditures by the ultra-wealthy and the corporations from which their wealth derives is a series of government policies increasingly favoring the sources of these contributions: Tax cuts for high income individuals and for corporations; failure to adopt and/or enforce regulations protecting the public and the environment if those regulations cut into profits; failure to enforce anti-trust laws which are still on the books; privatization/profitization of functions formerly carried out by the government (e.g. schools, jails, military functions, some IRS functions, the US Postal Service) ; the elimination of social safety nets, and a consistent failure to protect the public from financial predation by big business; in short, a government that does not represent us.