Democracy

We are a plutocracy, a country in which wealth controls, which may be true of all countries
Even our democratic processes are hardly that because money dominates politics and we know it
It dominates the government and it dominates the media
Ramsey Clark
Former US Attorney General

To make our democracies more democratic we need to understand how corporations control the democratic process. First and foremost, they control governments by providing financial support to all the major political parties. This ensures that, regardless of the outcome of an election, the party in power will be indebted to them. The effect of this is that the winners of an election invariably end up supporting the interests of corporations and the rich over those of the general public. This is not so much because the politicians have been bribed, it is more that they have been vetted before they are allowed to join the party.

The reality of politics is that if a political party wants to garner financial support from corporations its policies will need to be aligned with corporate interests. This is only fair, but in the US, where major elections are huge PR affairs, the candidates with the biggest campaign budgets win around 90% of elections. Since corporations, and the ultra-rich who control them, can and do make substantial donations to campaigns, refusing to take their money can be problematic.

If a political party believes corporate donations are essential to win an election, then the party line will need to be corporate friendly for it to receive corporate sponsorship. And, since a potential candidate’s views must conform to the party line for them to be selected to run for office, they are effectively pre-screened so that only those with corporate-friendly views can do so. If all the major parties take this view the government will always consist of corporate-friendly people.

This situation is exacerbated by the appointment of corporate executives to bureaucratic positions within a government. Corporate executives are often the best-qualified candidates for public office, where they are typically charged with regulating their former employers since their area of expertise is the industry in which they previously worked.

When these bureaucrats leave government service they often return to the corporate sector, where they are more likely to be re-employed, and given better-paid positions, if the industry benefited from the decisions they made while in public office. This encourages them to place corporate interests ahead of those of the public when they are working for the government. The cyclical employment of bureaucrats by corporations and the government institutions established to regulate their industry, which allows corporations to influence, and in some cases write, the regulations that apply to them, is known as regulatory capture.

Regulatory capture is only half the problem though; the other half is cognitive capture. This is where the thinking of bureaucrats is captured, rather than just their behaviour. This occurs when only people of the ‘correct’ mindset can get a job regulating or working in an industry. This is probably best seen in the field of economics, where the curriculum at many leading universities is such that neoliberalism is taught as the only viable approach. Alternatives are either discredited or ignored. Several decades of this has led to the situation where virtually every economist in a position of significance is a neoliberal, and anyone with an alternative point of view is seen as a radical.

Corporations also control governments via lobby groups and the media. Multinationals can afford to spend millions of dollars on advertising and lobbying politicians because the pay-out can be in the billions. This is particularly worrying because the industries with the most money to spend include some of the most destructive, such as arms, fossil fuels and tobacco.

If a government represents the people who voted it into power, then the laws and regulations it passes should be based on the principle that the primary purpose of an industry is to provide its employees with good jobs, and that a corporation’s main responsibility is the benefit of its workers, not its shareholders, or even its customers. It may seem wrong that the primary purpose of an industry is to provide good jobs, rather than good quality products and services, but if workers know their employer is providing them with the best pay and working conditions possible they will be motivated to produce a high-quality product. And if their pay is linked to company profits it will give them an incentive to maximize production.