Corporatocracy: The Influence of Business on the Government

Corporate activism has become a staple of the current economic environment. Corporations routinely give millions, even billions, to causes labeled as “socialism”. Which conceivably would go against their own interests. The modern world is rife with discussions about “Capitalism” and “Socialism”, but there is little discussion as to what those terms mean. There is even less discussion as to the distinctions between the different forms within these two systems. Generalizations are much easier for the masses to understand, even if they don’t make any concrete sense. The real issue pertains to the system the United States currently finds itself mired in, appropriately described as Corporatocracy.

For the first 120 or so years, the United States could generally be described as a farmer’s republic. There were few large corporations and more importantly, there were no single corporations large enough to dictate policy. Though even in the Antebellum period, there were still lobbying interests present. For instance, one of the main reasons that Texas was admitted to the union was because in the bill was a provision stating that the US Government would purchase all outstanding debt of the Republic of Texas. As a result, investors holding bonds from the heavily indebted Republic successfully lobbied congress to admit Texas as a state. It is important to note that in this example there was no bad faith involved and that this was done simply to garner enough votes for what was largely considered a beneficial territory for the Nation.

After the civil war, the yeoman farmers republic began to give way to the corporatocracy that we know and love today. In 1872, the Credit Mobilier scandal rocked the United States Government. The scandal involved Credit Mobilier, which was a shell company created by the Union Pacific Railroad Company, an organization still in existence. The way the arrangement worked was that Credit Mobilier would build the railroad and then bill Union Pacific for the costs. Credit Mobilier would go on to charge Union Pacific almost double the amount of the actual construction costs, with the executives embezzling the excess amounts from the company coffers. The scandal extended to government, with congressman being bribed with Credit Mobilier stock in order to vote for government contracts in favor of Union Pacific. Involved in this scandal were not just low-level politicians, but rather the sitting Vice President as well as the Speaker of the House. This was the first known instance where two influential policymakers lined their own pockets at the expense of the citizens of the country. This scandal would lead prominent social commentators to decry what is now known as the Gilded Age.

The modern world is currently enthralled in a New Gilded Age. Those at the top are wealthier than ever, while many at the bottom struggle to get by or are wage slaves with no real existence. The previous example is actually very similar to many of the arrangements occurring in the US Government today. Companies such as Google and Amazon have made the news lately for arbitrarily banning those with opinions they don’t like from their platforms. One of the most overlooked aspects is that these companies, like Union Pacific, receive enormous government contracts. There is a lot of talk about invoking “Section 230” to stop this, but in reality, it would be much easier to just pull the contracts. This would deprive the companies of quite a bit of revenue, enough that they would likely drop the censorship or significantly limit it.

One of such government contracts is the $10 billion JEDI cloud computing project. Such a project would be a massive boon to the winner and would likely require the winner to play by whatever rules the Trump administration sets. Amazon had made it very clear that it cherished this contract, but Donald Trump himself stepped in and awarded the contract to Microsoft. Amazon is actually suing the government in this and is locked in a heated battle in the courts with both the administration and Microsoft. But the point remains, such contracts should come with strict stipulations against censorship or favoritism towards any political party.

So why doesn’t this happen? Again, just like with Union Pacific, these companies provide financial incentives to make sure that their financial situation is not harmed by legislation or other changes from Congress. Google, for instance, is one of the main sponsors of CPAC.  This supposedly “conservative” conference is taking money from Google, which many voters find strange. It is not strange though; it is the norm for the current system. While Google is genuinely left wing in its political orientation, it knows that if not properly rewarded “conservatives” could vote to punish them. Congressman are also allowed to own stock and seek to line their own pockets by making sure to help out the companies that they are invested in. One of the funniest bits of the 2016 election was that most of the top donors to Jeb Bush… were also top donors for Hillary Clinton. If these entities really cared about the “issues” why would they fund the perceived front runners on both sides?

Business has existed in the United States since its founding as a nascent farmers republic. In recent years, the growth of the corporatocracy has alarmed many and resulted in movements such as “Occupy Wall Street”. If the US were to use the methods listed above, it may be able to redirect the corporate influence towards benefiting the American people rather than oppressing them.

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