Chapter 45: The Universe of Organized Interests

“People brag about the free market. But we have central planning here. It’s just not by government. It’s by corporations.”

—John Ikerd (1)

Theories About the Role of Organized Interests in the Political System

When the French aristocrat Alexis de Tocqueville toured the United States in the 1830s, he was struck by how well developed the “principle of association” was among average Americans. (2) Over the years, political analysts have tended to split over the question of how the American political system operates, and one side in this debate is well represented by de Tocqueville’s insights into the vitality of political associations in the young republic. Called Pluralism, this theory holds that American politics is marked by a rich diversity of organized interests vying with each other to see that their respective wishes are translated into government policy. (3) Ordinary Americans are free to start or join any of these groups, and the variety of possible interests makes for a more or less level playing field. In other words, no one set of interests is likely to dominate public policy—at least not for very long, because the many losers will temporarily put aside their differences to go after the top dogs. The pluralist argument is bolstered by the number and variety of interest groups, and by the fact that interests in one category—business, for example—often struggle with each other and fail to put up a monolithic front vis a vis labor or environmental groups.

Other political scientists argued that if the American system was at some point characterized by pluralism, over time it transformed into something less healthy: an out of control hyper-pluralist polity. Hyper-Pluralism suggests that the government has essentially been captured by the demands of interest groups. And rather than being an arbiter of the struggle between organized interests, the government tries to put into effect the wishes of them all to the detriment of the country. Political scientist Theodore Lowi called this pathological process interest group liberalism, which is often used interchangeably with the hyper-pluralism label. (4) These theorists point to the contradictory nature of government policy—for example, subsidizing tobacco farming while spending money trying to keep people from smoking—as evidence that there isn’t really a competition going on as envisioned by pluralism. The system more closely resembles a compartmentalized free-for-all.

The third branch of disagreement is called Elite Theory. Elite theorists hold that the many-interests-on-a-level-playing-field vision of the pluralists and the interest-group-chaos scenario of the hyper-pluralists fail to accurately show what is really going on: that a relatively small and wealthy class of individuals—the power elite—largely gets its way regardless of the surface appearance of political conflict. (5) According to this theory, the power elite either are the decision-makers, or they so influence the decision-makers that the elites get their way most of the time. Elite theory highlights the power of business and military interests and points to many government policies that lavish benefits on them. Moreover, business interests create interlocking and overlapping connections that reinforce their position and allow them to control the political system—witness how limited and overlapping are the memberships of corporate boards, foundation boards, and trustee positions for public and private universities, as well as corporate ownership of the media.

When political scientists have looked at actual public policy decisions and their correlation with interest group action, the opinions of wealthy Americans, and the opinions of middle-income Americans, they found support for the Elite Theory. For example, Martin Gilens from Princeton and Benjamin Page from Northwestern University, found that organized interests were not particularly attuned to the interests of average Americans, and that this was especially true of business interests and some single-issue groups such as those concerning abortion and gun rights. Their public policy analysis indicated that the preferences of ordinary citizens have little to no influence on the course of policy. Instead, elites and organized interests—many of whom are run by elites—have a large impact on public policy making in the United States. Their support is almost essential for a policy change to pass, and their opposition means that a policy change is extremely unlikely to pass. Gilens and Page suggest that those of us interested in seeing the popular will triumph in America might not be satisfied with what they actually found: “Democracy by coincidence, in which ordinary citizens get what they want from government only when they happen to agree with elites or interest groups that are really calling the shots.” (6) When a machine learning specialist and a mathematician applied different statistical techniques to the Gilens and Page data set they found the situation was even worse: they could predict public policy with a high degree of accuracy by consulting the opinions of only the wealthiest 10% of Americans and a few powerful interest groups. These scientists concluded that “the US government has significant plutocratic tendencies.” (7)

An offshoot of Elite Theory centers on how elites achieve their aims through the structures of corporate capitalism. During America’s founding period, large corporations were rather new entities that elicited suspicion among many people. Queen Elizabeth granted a corporate charter for the East India Company on December 31, 1600, and British colonization of North America intimately involved the Company and its personnel. In the 1770s, the East India Company was incensed that American privateers were importing tea on their own or going through the Dutch rather than the English. Beset by these and other problems, the East India Company fell on hard times and prevailed upon Parliament to pass the Tea Act of 1773, which exempted the company from English taxes and enabled it to drive American tea merchants out of business. As historian Ray Raphael puts it, the Boston Tea Party “began with the British government’s bailout of a corporation deemed too big to fail.” Unlike what I was taught in grade school, the Boston Tea Party did not concern a tax increase. Instead, the rebels who dressed up as Mohawk Indians and dumped the tea into the harbor were upset that the East India Company was being given a tax break and that the Americans had no say in that decision. (8)

Perhaps as a result of this founding shock, many Americans futilely resisted the rise of corporate power. In 1816, Thomas Jefferson wrote, “I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country.” (9) The powers of corporations in the United States were restricted through the language of their corporate charters, which were governed by state law. The charters limited large corporations’ behavior and made them serve the public interest as well as the interests of their shareholders. In the second half of the nineteenth century, the Supreme Court began to treat corporations as legal “people.” From 1900 onward, states began to compete with each other to gut the strict provisions of corporate charters, relieving corporations of the need to be accountable to state governments and from the fear of having their corporate charters revoked should they overstep their bounds.

The contemporary situation, according to elite theorists who focus on the role of corporations, is that large corporations effectively rule not only the United States, but the world as well. (10) They have the same free speech rights as individuals with one important exception: unlike real people, “corporate people” have nearly unlimited funds to broadcast their views and support politicians. Corporations have become “too big to fail,” and so command politicians to provide taxpayer money to bail them out when they—through incompetence or malfeasance—bring themselves to the brink of economic collapse. And then the corporations and banks and investment houses lobby to defeat legislation that would regulate their incompetence and malfeasance in the future. When large corporations regularly flout worker safety and environmental laws, resulting in damage, injury and death, the corporate coffers pay the requisite fines, and they go about their business as though nothing had happened.

Kinds of Organized Interests

The term organized interests refers to political interests that have a specific organizational unit that works to influence public policy in numerous ways short of running actual election candidates. This organizational unit requires money and staff simply to exist, plus additional money to influence policy. We can categorize organized interests as follows.

Category 1: Economic Interests–These are groups that coalesce around the financial interests of their members.

• Corporations and Business Interests—Most large corporations actively work to influence public policy. Exxon, General Motors, Microsoft, Walmart, and Verizon all maintain teams of lobbyists and spend considerable money to get what they want. Business interests are also represented by associations like the Chamber of Commerce, the Business Roundtable, and the National Small Business Association. Still others represent specific professions such as the American Medical Association. Then there are the corporate-funded think tanks whose ideas and spokespeople get much play on corporate-owned mainstream media. These include Americans for Prosperity, the Cato Institute, the Heritage Foundation, and the Club for Growth.
• Labor Interests—Organized labor unions also maintain professional staff dedicated to political action. They work to promote unionized workers’ interests specifically, and all workers generally. The dominant labor group is the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), which is an umbrella organization that encompasses nearly a hundred distinct unions including the American Federation of Teachers, the Airline Pilots Association, and the United Mineworkers of America. Altogether, the AFL-CIO represents more than twelve million workers. Independent labor unions include the Service Employees International Union and the International Brotherhood of Teamsters.

Category 2: Citizen’s Groups or Non-Economic Groups—This is a catch-all category that encompasses interests that are not overtly tied to the economic interests of their members.

• Public Interest Groups—Also known as good-government groups, they claim to represent the broad interests of all Americans. Many of these groups were started since 1960, although some are older than that. Common Cause is perhaps the most prominent of these. It was founded in 1970 by progressive Republican John Gardner and works on issues such as campaign finance reform, media reform, and making government more open, responsive, and ethical. Other public interest groups include the Center for Public Integrity, Citizens Against Government Waste, Citizens for Responsibility and Ethics in Washington, Public Citizen, and the Center for Responsive Politics.
• Single-Issue Groups—These are groups that tend to concentrate on one issue or one area of public policy. They range across the political spectrum from the Sierra Club to the National Rifle Association, from the NARAL Pro-Choice America to the National Right to Life Committee. The narrow focus of these groups tends to attract highly motivated members, which can help the group maintain its power and role in the political system. These active members can be called upon to donate money, write emails to congressmen, and show up at demonstrations.
• Ideological Groups—Ideological groups are interested in a variety of issues and have a clear ideological bias that governs the kind of policies the group endorses. There are a number of conservative or libertarian groups that are heavily funded by corporate interests or by religious interests. These include the Christian Coalition, the Family Research Council, Focus on the Family, Americans for Prosperity, the American Conservative Union, and the Eagle Forum. Less prominent are the liberal or progressive groups like United for a Fair Economy, the Economic Policy Institute, MoveOn, and People for the American Way.
• Demographic Groups—Some organized interests were created to defend or advance the interests and rights of specific demographic groups. The American Association of Retired Persons (AARP), which is a powerful lobby group with 35 million members, is the classic example of one of these demographic groups. There are others: The National Organization for Women (NOW), the National Association for the Advancement of Colored People (NAACP), the National Council of La Raza, and Black Lives Matter.

Category 3: Government Interests—State, city, and local government interests have coalesced into organized groups. Most states and major cities have paid lobbyists in Washington. They’ve also formed groups such as the National League of Cities, the U.S. Conference of Mayors, the National Association of Counties, and the National Governors Association. So much of national government policy affects state and local governments that they organize to try to influence what comes out of Washington.

Corporate Dominance of the Organized Interest Universe

The political scientist E.E. Schattschneider once famously wrote that “The flaw in the pluralist heaven is the heavenly chorus sings with a strong upper-class accent.” (11) We can say with a great deal of confidence that corporations dominate the universe of organized interests in the United States. One study suggested that business interests spent $34 on lobbying for every $1 spent on lobbying by all other interest groups and unions combined, and that over 90 percent of the largest lobbying organizations have been businesses. (12) Nearly three-quarters of the money donated to federal candidates comes from corporate political action committees. (13)

Corporate dominance of American organized interests comes not just from their campaign contributions and their direct lobbying efforts—although those are substantial—but also from other tools at their disposal. They serve as lucrative landing spots for politicians, congressional staffers, and executive branch officials who want to take advantage of the revolving door. As we’ll see later in our chapter on the media, they own the news channels that provide us with vital political information. Similarly, corporations buy advertising on media channels, and are able to pull that advertising should they disagree with viewpoints of particular shows. Corporations fund think tanks that argue for laissez-faire economic policies and tax cuts for businesses and the wealthy. Through their control of the news media, media in general, and think tanks, corporations have an upper hand in shaping public opinion. Corporations and the wealthy can also engage in a capital strike by withholding capital investment or by moving money elsewhere until they get the government policies they want. A capital strike “might take the form of layoffs, offshoring jobs and money, denying loans, or just a credible threat to do those things, along with a promise to relent once government delivers the desired policy changes.” (14)

Corporate dominance operates through two primary mechanisms. One is by participating in the political system very much as people do. They are, after all, artificial persons vested with rights by the Supreme Court, although not by the text of the Constitution itself. They lobby; they donate to politicians; they speak through the media that they own and support through advertising; they fund think tanks, and they operate the revolving doors to and from government.

The second mechanism is the cultivation of fear, for fear breads conservative responses. Fear that I might lose my job, especially if I speak up; fear that my senator or representative feels about the possibility that jobs will be lost in the district on their watch if they cross powerful corporations; fear that the same politician will see their funding sources dry up because of a vote for single-payer healthcare; fear that I cannot switch jobs or start a small business because I risk my family’s health coverage; fear of being transferred. Princeton professor Sheldon Wolin captured the fear that is the “constant companion” of ordinary people: “Downsizing, reorganization, bubbles bursting, unions busted, quickly outdated skills, and transfer of jobs abroad create not just fear but an economy of fear, a system of control whose power feeds on uncertainty, yet a system that, according to its analysts, is eminently rational.” (15) Neither good government groups, unions, single-interest groups, or ideological groups have this set of tools at their disposal the way corporations and business interests do.

What If?

What if we passed and ratified the We the People Amendment to the Constitution? (16) How would this amendment positively or negatively affect the American political system? Here’s the text of the amendment:

Section 1. Artificial Entities Such as Corporations Do Not Have Constitutional Rights

The rights protected by the Constitution of the United States are the rights of natural persons only.

Artificial entities established by the laws of any State, the United States, or any foreign state shall have no rights under this Constitution and are subject to regulation by the People, through Federal, State, or local law.

The privileges of artificial entities shall be determined by the People, through Federal, State, or local law, and shall not be construed to be inherent or inalienable. 

Section 2. Money is Not Free Speech

Federal, State, and local government shall regulate, limit, or prohibit contributions and expenditures, including a candidate’s own contributions and expenditures, to ensure that all citizens, regardless of their economic status, have access to the political process, and that no person gains, as a result of their money, substantially more access or ability to influence in any way the election of any candidate for public office or any ballot measure.

Federal, State, and local government shall require that any permissible contributions and expenditures be publicly disclosed.

The judiciary shall not construe the spending of money to influence elections to be speech under the First Amendment.

Section 3. 

Nothing in this amendment shall be construed to abridge freedom of the press. 

References

1. Nick Shaxson, “Rural America Doesn’t Have to Starve to Death,” The Nation. March 2, 2020. Page 17.
2. Alexis de Tocqueville, Democracy in America. Volumes 1 and 1, Unabridged. Translated by Henry Reeve. Digireads Publishing, 2016.
3. Classic texts in the Pluralist tradition include David B. Truman, The Governmental Process, 2nd edition. New York: Knopf, 1971; and Robert Dahl, Pluralist Democracy in the United States. Chicago: Rand-McNally, 1967.
4. Theodore J. Lowi, The End of Liberalism, 2nd edition. New York: Norton: 1979.
5. See C. Wright Mills, The Power Elite. New York: Oxford University Press, 1956; and Ralph Miliband, The State in Capitalist Society. New York: Basic Books, 1969.
6. Martin Gilens and Benjamin Page, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” Perspectives on Politics. Fall 2014.
7. Shawn K. McGuire and Charles B. Delahunt, “Predicting United States Policy Outcomes with Random Forests,” Institute for New Economic Thinking. Working Paper No. 138. October 27, 2020.
8. Ray Raphael, “Debunking Boston Tea Party Myths,” History Net.
9. Quoted in Thom Hartman, Unequal Protection. The Rise of Corporate Dominance and the Theft of Human Rights. Rodale Press, 2002. Page 82.
10. David. C. Korten, When Corporations Rule the World. 2nd edition. San Francisco: Berrett-Koehler Publishers, 2001.
11. E.E. Schattschneider, The Semi-Sovereign People: A Realist’s View of Democracy in America. Boston: Wadsworth, 1975. Page 34.
12. Lee Drutman, The Business of America is Lobbying. Oxford: Oxford University Press, 2015. Pages 1-21.
13. Karl Evers-Hillstrom, “Why Corporate PACs Have an Advantage,” OpenSecrets. February 14, 2020.
14. Kevin Young, Michael Schwartz, and Tarun Banerjee, “When Capitalists Go on Strike,” Jacobin. February 2017.
15. Sheldon S. Wolin, Democracy, Inc.: Managed Democracy and the Specter of Inverted Totalitarianism. New Edition. Princeton: Princeton University Press, 2017. Page 67.
16. Move to Amend.