Why the Only Business of America Is Business

Last week, Americans flocked to the polls to engage in their biannual election ritual. In America, voting is — as every schoolchild is taught — a very important responsibility.

According to the most popular theory of representative democracy, voting is the method through which the populace selects representatives, who must take moderate policy stances on those issues which different groups of citizens have voiced concerns over, in order to win a majority of votes and serve in public office.

Most of us would like to believe this is true, largely because it sounds good. But, as polls have repeatedly shown, most of us also suspect that things don’t really work this way.

And so, another, very popular, theory of representative democracy gets passed around outside of school. Voting is how citizens keep in-check all those politicians who keep using the potent central government to amass more and more control over our lives for the state.

While this theory allows Americans to express their cynicism about politics — and is frequently one of the main themes of election-year rhetoric — it, also, doesn’t really explain the American political process.

Take the recent, several-year-long, squabble over health-care reform in America. If elected representatives really act moderately on behalf of voters’ concerns, then why did it take almost a century for citizens’ concerns over the cost and availability of health care to become a genuine public-policy issue? And why did the results end up being so lame that most citizens consider health-care reform to have been a complete failure?

And, if representatives really wish only to seize more power and control for the central government, then why have they repeatedly failed to create socialized medical care, or at least socialized medical insurance, when every other developed nation has found it quite easy, and very popular, to do so for over a century? And why has every president, even those with immense popularity, like Teddy Roosevelt, FDR, or Harry Truman, who ever broached the idea of government-managed health-care funding, suddenly found himself a persona non grata within his own government?

The truth is, in America, elected officials neither represent voters’ concerns, nor are they interested in expanding government power. Instead, they represent the concerns of those who finance their campaigns and employ lobbyists. Citizens can vote, if they like, but they will only have the opportunity to vote for those who will represent the big businesses that can afford to sponsor candidates and purchase influence.

In order to understand how this situation came about, you’ll need to understand both the nature of power and the history of institutionalized power in the West.

Power is, simply put, the ability to achieve desired results. Mostly, it comes in four variations: authority, reference, resources, and coercion. Authority is the willingness to arbitrate disputes and accept responsibility for group action. Reference is the ability to make sense of things or know how to do things. Resourcefulness is the capacity to determine how materials will be used and distributed. And coercion is just punishing or misleading others.

Long ago, the institutions that people created to make their lives simpler started exerting more power over their people than vice versa, largely because it had made sense for people to create their institutions around one or more power bases. For instance, government and courts exercise authoritative power, the church and academy exercise reference power, merchants and corporations exercise the power of resource distribution, and the military and police exercise coercive power.

Not surprisingly, you can understand the general character of any society by looking at the power bases of its most dominant institutions. Particulars will vary, but, inevitably, most of a societies’ goals and public policy will serve the institutions whose power most influences that society.

For instance, during Europe’s medieval period, coercion and reference determined the character of life. Armed and armored aristocrats ensured, through coercion, that the royal houses’ authority and the serfs’ agricultural production bolstered the aristocrats’ power. The Catholic Church also, through reference, ensured that royalty was dependent on it, for legitimacy, and also kept the trade guilds dependent on it, by commissioning the cathedrals and accouterments necessary to display its reference power.

Eventually, though, the merchants’ resource-based power found a way to tip the balance in society. Merchants began funding the small and constantly-indebted royalty, who, in turn, began adjudicating disputes in the merchants’ favor. Soon, states and businesses found that they could match or even dominate the aristocracy’s and church’s power. In response, both the aristocracy and the church began to operate outside their power bases, by engaging in adjudication or business, like their rivals, and were soon rejected by a population which saw that they had been corrupted by other institutions.

This led to the colonial period in the West, where the state’s authority and the merchants’ resourcefulness dominated society. Merchants continued to fund the state as long as the state would use its authority to validate their actions. Merchants patronized and publicized scholars who would use their reference power to explain how markets could manage everything. And states, at the request of the merchants, who they could not afford to ignore, socialized the military and police’s coercive power and then attempted to expand themselves into neighboring territories, and even in territory overseas, so the merchants could acquire new markets and continue to fund the state’s actions.

When, in the modern period, colonies, like the ones in North America, began to rebel against the practices of their colonizers, they attempted to limit the government’s authoritative power, believing that this must have been the means by which corporate merchants had controlled and exploited them. So, the fledgling United States limited the scope of government, attempted to make it accountable to the populace through representative democracy, and, just to be safe and avoid a repeat of the Middle Ages, barred it from colluding with the church. But the founding fathers didn’t see the need to put limits on business institutions — which the merchants’ scholars had told them were completely benign — and so corporations’ resource power quickly grew to fill the void left by limited authoritative power, limited reference power, and limited coercive power.

This oversight soon became obvious. Thomas Jefferson hoped, early in American history, to “crush, in its birth, the aristocracy of our monied corporations, which dare already to challenge [us] to a trial by strength.” But it was too late. With no other institutions empowered to stand in their way, companies easily dominated society. It’s not that they prevented other institutions from exerting influence. After all, all institutions require the use of some degree of authority, reference, resourcefulness, and coercion, but dominant institutions can, and do, set the terms under which others may operate.

The academy, for instance, may exert reference power, as long as it continues to conduct corporate research and train potential employees. The military may exert coercive power, as long as it continues to buy expensive weapons systems and deploy itself to regions unfriendly to American markets. The government may continue to exert authoritative power, as long as it continues to adjudicate in favor of big business and doesn’t tax wealthy corporations.

Now, remember all that fuss over health-care reform? Knowing that corporate institutions set the agenda and terms of public policy, we can see why it took almost a century for health-care costs to become a policy issue. It’s because it wasn’t until now that the costs finally reached the point where creditors feared the growing number of bankruptcies, which were occurring for no reason other than because people were getting sick and then trying to pay their medical bills. Want to know why it took an entire legislative term filled with political infighting to end up with a mostly-useless law that’s filled with concessions to various industries? It’s because bankers, employers, hospitals, and insurers had conflicting interests and used their bought-and-paid-for representatives to fight each other to a stand-still. Want to know why we’ll probably see the legislative infighting over this issue continue through the next term? It’s because some factions of industry are still getting hurt by health-care costs, and the law hasn’t fixed that yet.

So, two years from now, most of us will, again, return to the polls to vote for representatives, thinking we’re either getting the issues which concern us to the table, or limiting our representatives’ urge to expand government power. But, really, we’ll only be validating the choices big business has already made for us through their institutional funding. And, until our society, as a whole, refuses to allow big business to keep America in a stranglehold, that’s the way it will continue to be.