By Dave Buer | Watchdog.org
Recently I came across a complaint about corporate involvement in politics. The complaint initially rankled, probably because a corporation is really just an organized body of individuals, all of whom should be allowed to participate in the public process in the way they choose. Typically these types of complaints are really calls for more government regulation of the political process with all of the potential for abuse that entails.
This is not to say that corporations do not pursue interests at odds with the public good. Many companies promote trendy notions related to the family, for instance, such as population control or same-sex marriage, that prioritize adult interests over children’s needs. And, of course, some large businesses have managed to secure large amounts of public money in the form of bailouts and similar “corporate welfare” arrangements.
The possibility that groups can pursue aims at odds with the public good is hardly new. In Federalist 10, James Madison defined a “faction” in just this way — as a majority or minority which pursues ends which are not in the best interest of the community: “a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community.”
If the faction is a minority, the normal political process should be able to control it since its particular interest would be unpopular with the majority and our system is centered on majority votes: the majority can “defeat its sinister views … by regular vote.”
If the faction is majority, the risk is greater but can be ameliorated by the complex structure of the government (the “extended republic”) created by the Constitution, which can dilute the power of the majority by separating government powers among different entities and across different geographical and jurisdictional bodies.
Most proposed regulations have as their aim the one remedy Madison recognized as more dangerous than the disease — extinguishing liberty — by imposing restrictions on who may participate in the political process and how. Such regulations are subject to abuse. Just last year the Supreme Court heard a case involving a politician who had attempted to retaliate against a pro-life group that had criticized one of his votes by using campaign “reform” laws.
A more fruitful avenue for reform would be to look at the characteristics that make influencing government so attractive. The sheer size of government and the astonishing breadth of its reach, for instance, make it an attractive source of money and power. As Professor George W. Carey explained, what James Madison contemplated in Federalist 10 was “a relatively passive government.” That government is now a thing of the past and consequently, Professor Carey explains, “the government has massively intervened in precisely those areas of economic and social life where it is abundantly clear that the opportunities for factious influence abound.”
Increasingly minute regulations also favor the influence of large companies (some of whom involved themselves, through lobbying, in the process of developing the rules) who can absorb the costs of conforming, including devoting legal resources to ensure compliance or defeat claims of noncompliance and who can often secure favorable exemptions.
Not coincidentally, smaller competitors will be at a significant disadvantage in a market distorted by complex regulations.
Multiplying laws also means multiplying lawsuits which, in turn, necessitates legal costs which can be prohibitive, especially when combined with the costs in time, paperwork and employee time in complying with regulations.
The expansion of the regulatory state also provides government, with its overwhelming prosecutorial resources, to exact concessions from individuals and businesses that further increase its attractiveness as a source of power for those who can influence its decisions.
The influence of corporate money can certainly be used in a way harmful to the common good. Curbing that influence, however, will not be accomplished by increasing the size and reach of government in a way that rewards attempts to influence it. Rather, decreasing the influence of government on social life will take from factions the incentive to wield the power of the state.