In “The Assault on Corporations” (TOS, Fall 2020), I showed that the economic power of a corporation is fundamentally different from the political power of government. Whereas economic power is the ability to produce and trade, political power is the legal authority to use physical force against people. Government acts legitimately when it uses force to protect people from criminals and hostile nations. But it often acts illegitimately, using force to violate people’s rights. A corporation can have vast economic power, but unlike government, it has no legal authority to force anyone to do anything. Despite this, people often conflate economic power with political power, incorrectly ascribing political power to corporations.

Although corporations lack direct political power, some critics retort, this misses the point. They use their economic power to unduly influence government. Corporations thus wield political power, the argument goes, because they gain control over those who have it. “These massive concentrations of economic power,” says former secretary of labor Robert Reich, “generate political clout that’s easily abused.”1 Liz Kennedy from the Center for American Progress says, “America faces a crisis of corporate capture of democratic government, where the economic power of corporations has been translated into political power with disastrous effects for people’s lives.”2 Or as Massachusetts Institute of Technology Professor Noam Chomsky puts it, “The corporations set the conditions within which the government operates, and control it to a large extent.”3 This control encompasses both parties. “The corporate political machines,” journalist Chris Hedges writes, “control the Republicans and Democrats.”4 . . .


1. Robert Reich, “Break up Facebook (and While We’re at It, Google, Apple and Amazon),” The Guardian, November 20, 2019,

2. Liz Kennedy, “Corporate Capture Threatens Democratic Government,” Center for American Progress, March 29, 2017,

3. Noam Chomsky, How the World Works (New York: Soft Skull Press, 2011), 157.

4. Chris Hedges, “We Must Understand Corporate Power to Fight It,” Truthdig, June 13, 2016,

5. Senator Sheldon Whitehouse with Melanie Wachtell Stinnett, Captured: The Corporate Infiltration of American Democracy (New York: New Press, 2017), 3–4.

6. Robert Monks, “The Corporate Capture of the United States,” Harvard Law School Forum on Corporate Governance, January 5, 2012,

7. George Monbiot, “Is This the End of Civilisation? We Could Take a Different Path,” The Guardian, January 24, 2018,

8. Benjamin I. Page and Martin Gilens, Democracy in America? What Has Gone Wrong and What We Can Do About It (Chicago: University of Chicago Press, 2017), loc. 4019.

9. Whitehouse and Stinnett, Captured, 150.

10. “2020 Democratic Hopeful Tom Steyer: We Shouldn’t Put an Arbitrary Lid on the Dreams of Americans,” Fox News, October 16, 2019,

11. Wendell Potter and Nick Penniman, Nation on the Take: How Big Money Corrupts Our Democracy and What We Can Do about It (New York: Bloomsbury Press, 2016), 167.

12. Ralph Edward Gomory and Richard E. Sylla, “The American Corporation,” Daedalus, Spring 2013,

13. Lawrence Lessig, Republic, Lost: How Money Corrupts Congress—and a Plan to Stop It (New York: Twelve, 2011), 169.

14. Quotable Elizabeth Warren, edited by Frank Marshall (New York: Skyhorse, 2014), 78.

15. David C. Korten, When Corporations Rule the World, 20th Anniversary Edition (Oakland: Berrett-Koehler, 2015), 312.

16. Ralph Nader, “Taming the Giant Corporation,” May 29, 2007,

17. Bernie Sanders, “Get Corporate Money out of Politics,”

18. Page and Gilens, Democracy in America?, loc. 261.

19. Lee Drutman, The Business of America Is Lobbying: How Corporations Became Politicized and Politics Became More Corporate (New York: Oxford University Press, 2015), loc. 516, 1021–31, 1059, 2112–39, 4516–24.

20. “The Most (And Least) Lucrative Committees in Congress,” NPR, April 6, 2012,; Jay Cost, A Republic No More: Big Government and the Rise of American Political Corruption (New York: Encounter Books, 2015), 273; Potter and Penniman, Nation on the Take, 9.

21. As I said, corporations cannot contribute directly to a politician’s campaign. When referring to corporate contributions, therefore, I am referring to contributions from a corporation’s PAC or individual contributions from a corporation’s executives.

22. Karl Evers-Hillstrom, “Lobbying Spending in 2019 Nears All-Time High as Health Sector Smashes Records,”, January 24, 2020,; “Cost of Election,”,

23. David Vogel, Fluctuating Fortunes: The Political Power of Business in America (New York: Basic Books, 1989), 34; Drutman, Business of America Is Lobbying, loc. 338–48, 516–24, 1258–77, 1696–1704.

24. Lewis F. Powell Jr., “The Memo,” Powell Memorandum: Attack on American Free Enterprise System (1971),

25. Vogel, Fluctuating Fortunes, 199; Drutman, Business of America Is Lobbying, loc. 1420.

26. Vogel, Fluctuating Fortunes, 197, 207.

27. Fred S. McChesney, “‘Pay to Play’ Politics Examined, with Lessons for Campaign-Finance Reform,” Independent Review 6, no. 3 (Winter 2002): 347,

28. Lessig, Republic, Lost, 91.

29. Drutman, Business of America Is Lobbying, loc. 1466.

30. These figures are in 2012 dollars. “Government Spending Chart: Various Items, US FY 1960 to FY 1980,”

31. Clyde Wayne Crews Jr., Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State (Washington, D.C.: Competitive Enterprise Institute, 2011), 15,,000%20Commandments%202011.pdf; “Reg Stats,” GWU Regulatory Studies Center,

32. John R. Lott Jr., “A Simple Explanation for Why Campaign Expenditures Are Increasing: The Government Is Getting Bigger,” Journal of Law & Economics 43, no. 2 (2000),; Cost, Republic No More, 188; Drutman, Business of America Is Lobbying, loc. 524, 1438–56, 1704, 1767, 3670, 3707–16, 4473–82.

33. Frédéric Bastiat, The Law, translated by Dean Russell (Irvington-on-Hudson: Foundation for Economic Education, 1998), 14.

34. “History,” Business Roundtable,

35. Drutman, Business of America Is Lobbying, loc. 1578, 3875.

36. Neil A. Lewis, “Medical Industry Showers Congress with Lobby Money,” New York Times, December 13, 1993,

37. Theodoric Meyer, “Small-, Mid-Sized Companies Help Sustain Tariff Lobbying Boom,” Politico, October 10, 2019,

38. Drutman, Business of America Is Lobbying, loc. 1737.

39. Quoted in Drutman, Business of America Is Lobbying, loc. 348, 1212.

40. Drutman, Business of America Is Lobbying, loc. 192–200, 286–93, 309, 1712, 2943–53, 3121, 4490.

41. Drutman, Business of America Is Lobbying, loc. 3052–60, 3156.

42. Whitehouse and Stinnett, Captured, 200, 59.

43. Cassandra Clark, “Pharmacide: The Pharmaceutical Industry’s Self-Destructive Effort to Loot America,” The Objective Standard 4, no. 4 (Winter 2009–2010): 11–19; John N. Friedman, “The Incidence of the Medicare Prescription Drug Benefit: Using Asset Prices to Assess its Impact on Drug Makers,” January 8, 2009,

44. “Medicare—CBO’s April 2018 Baseline,” Congressional Budget Office,

45. “Rep. Billy Tauzin—Louisiana District 03,”,

46. Potter and Penniman, Nation on the Take, 109–11.

47. Drutman, Business of America Is Lobbying, loc. 744.

48. Vern McKinley, Financing Failure: A Century of Bailouts (Oakland: Independent Institute, 2011), 130, 142–43, 198, 212–14, 246, 256, 300, 306–9.

49. McKinley, Financing Failure, 144, 170–73, 179, 294–95.

50. Some banks, including Wells Fargo, JPMorgan, and BB&T did not need the TARP bailout. But Paulson forced them to take it because he did not want the markets to know which banks were insolvent. “Document: Paulson Forced 9 Banks into Bailout,” NBC News, May 5, 2009,

51. Eric Lipton and Raymond Hernandez, “A Champion of Wall Street Reaps Benefits,” New York Times, December 13, 2008,

52. Atif Mian, Amir Sufi, and Francesco Trebbi, “The Political Economy of the US Mortgage Default Crisis,” American Economic Review 100, no. 5 (December 2010):

53. Benjamin M. Blau, Tyler J. Brough, and Diana W. Thomas, “Corporate Lobbying, Political Connections, and the Bailout of Banks,” Journal of Banking & Finance 37, no. 8 (August 2013):

54. “Dwayne Andreas,” Frontline,

55. Timothy P. Carney, The Big Ripoff: How Big Business and Big Government Steal Your Money (Hoboken, NJ: Wiley, 2006), 223–41.

56. Potter and Penniman, Nation on the Take, 158–60.

57. Caitlin Dewey, “Why Americans Pay More for Sugar,” Washington Post, June 8, 2017,; Potter and Penniman, Nation on the Take, 159–61; Carney, Big Ripoff, 61, 240–41; Lessig, Republic, Lost, 45, 48–49.

58. Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power (New York: Free Press, 2004), 102.

59. Timothy P. Carney, “Big Tax-Prep Companies Welcome IRS Regulation,” Washington Examiner, January 8, 2010,; Timothy P. Carney, “Little Guys Fight H&R Block’s Regulatory Robbery,” Washington Examiner, March 13, 2012,

60. Timothy P. Carney, “Mattel Exempted from Toy Safety Law It Helped Write,” Washington Examiner, September 3, 2009,

61. Timothy P. Carney, “How Many Lobbyists Does It Take to Change a Light Bulb?” Washington Examiner, December 28, 2007,

62. Timothy P. Carney, “Big Government Gets in Your Food, Hurts Small Farmers,” Washington Examiner, July 30, 2009,

63. Mark Zuckerberg, “The Internet Needs New Rules. Let’s Start in These Four Areas,” Washington Post, March 30, 2019,

64. Robert A. G. Monks and Nell Minow, Power and Accountability (New York: HarperBusiness, 1991), 130–31.

65. Paul Toscano, “Subway ‘Wouldn’t Exist’ if Started Today Due to Regulations: Founder Deluca,” CNBC, February 27, 2013,

66. Peter D. Schiff, The Real Crash: America’s Coming Bankruptcy—How to Save Yourself and Your Country (New York: St. Martin’s, 2012), 92.

67. Mark Green and Ralph Nader, “Economic Regulation vs. Competition: Uncle Sam the Monopoly Man,” Yale Law Journal 82, no. 5 (April 1973): 871,

68. Quotable Elizabeth Warren, 122.

69. Thom Hartmann, Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights (Emmaus, PA: Rodale, 2004), 164.

70. Of course, any profits gained from government favoritism come at the cost of long-term harm to all businesses.

71. Timothy Sandefur, The Permission Society: How the Ruling Class Turns Our Freedoms into Privileges and What We Can Do about It (New York: Encounter Books, 2016), 104–18.

72. Žygimantas Juška, “The Effectiveness of Private Enforcement and Class Actions to Secure Antitrust Enforcement,” Antitrust Bulletin, August 16, 2017,; Ryan Young and Clyde Wayne Crews, “The Case against Antitrust Law: Ten Areas Where Antitrust Policy Can Move on from the Smokestack Era,” Competitive Enterprise Institute, April 17, 2019,

73. Lessig, Republic, Lost, 150; Drutman, Business of America Is Lobbying, loc. 699.

74. Andrea Seabrook and Alex Blumberg, “Take The Money and Run for Office,” NPR, March 30, 2012,

75. Andrea Seabrook and Alex Blumberg, “Why Lobbyists Dodge Calls from Congressmen,” NPR, April 19, 2012,

76. “Shock Audio: Facing ‘Obligations’ from Leadership, Democrat Congresswoman Leaves Voicemail for Lobbyist Cash,” Breitbart, September 15, 2010,; “Congresswoman’s Voicemail: Where’s My Bribe?,” YouTube, August 17, 2013,

77. Frank James, “Andrew Breitbart Exposes How Politicians Raise Cash,” NPR, September 17, 2010,

78. Quoted in Jenny Andersen, “Hedge Funds Court Washington,” New York Times, March 13, 2007,

79. Andersen, “Hedge Funds Court Washington.”

80. “Hedge Funds: Lobbying,”,; “Hedge Funds: Long-Term Contribution Trends,”,

81. “Hatch: MS ‘Knuckle-Headed,’” Wired, June 6, 2000,

82. Quoted in Lessig, Republic, Lost, 197.

83. Targeted corporate tax breaks are often called “tax subsidies” or “tax expenditures.” For a good explanation of why these terms are nonsensical, see George Reisman, “‘Tax Expenditures’: Not Taxing Is Allegedly Spending,” Mises Daily, April 1, 2013,

84. Some tax extenders, such as the R&D tax credit, have been made permanent. But these are exceptions, not the rule.

85. Peter Schweizer, Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets (New York: Houghton Mifflin Harcourt, 2013), 30–31, 34–38; Lessig, Republic, Lost, 203–7.

86. Fred S. McChesney, Money for Nothing: Politicians, Rent Extraction, and Political Extortion (Cambridge, MA: Harvard University Press, 1997), 29–32, 55, 59–60, 71; Schweizer, Extortion, 13–14, 19, 41.

87. “Maxine Waters Threatens to Socialize Big Oil,” YouTube, September 12, 2009,

88. Quoted in Schweizer, Extortion, 9; David Fitzpatrick and Drew Griffin, “Ex-Shell Oil President: ‘I Felt Extorted,’” CNN, January 23, 2014,

89. Richard A. Oppel Jr., “Documents Show Parties Often Mixed Fund-Raising and Policy,” New York Times, December 7, 2002,

90. “Soft money” donations to political parties were banned under McCain-Feingold (2002).

91. “Hatch: MS ‘Knuckle-Headed.’”

92. Timothy P. Carney, “How Hatch Forced Microsoft to Play K Street’s Game,” Washington Examiner, June 24, 2012,

93. Carney, Big Ripoff, 10–11.

94. Jordan Novet, “Bill Gates Says Letting Android Win Mobile Was His ‘Biggest Mistake’ at Microsoft,” CNBC, June 24, 2019,

95. Jonathan Allen and David Saleh Rauf, “Apple’s Lobbying Effort Not Yet Ripe,” Politico, May 9, 2012,

96. “Apple Inc,”,; Allen and Rauf, “Apple’s Lobbying Effort Not Yet Ripe.”

97. Whitehouse and Stinnett, Captured, xxi.

98. Whitehouse and Stinnett, Captured, 44.

99. Korten, When Corporations Rule the World, 311.

100. Robert B. Reich, The System: Who Rigged It, How We Fix It (New York: Knopf, 2020), 185.

101. Potter and Penniman, Nation on the Take, 192.

102. Potter and Penniman, Nation on the Take, 193.

103. Page and Gilens, Democracy in America?, loc. 94.

104. Page and Gilens, Democracy in America?, loc. 3141.

105. Potter and Penniman, Nation on the Take, 213.

106. Mickey H. Edwards, “The Case for Transcending Partisanship,” Daedalus, Spring 2013,

107. Bradley A. Smith, Unfree Speech: The Folly of Campaign Finance Reform (Princeton, NJ: Princeton University Press, 2001), 24, 30, 37, 93–94, 104, 174–76, 178, 180–81, 194, 225.

108. Smith, Unfree Speech, 36, 50, 66–68, 70–73, 99–100, 102.

109. Steve Simpson, “Citizens United and the Battle for Free Speech in America,” The Objective Standard 5, no. 1 (Spring 2010): 13–32.

110. Whitehouse and Stinnett, Captured, 107.

111. Owen M. Fiss, The Irony of Free Speech (Cambridge, MA: Harvard University Press, 1996), 4.

112. Korten, When Corporations Rule the World, 311.

113. Page and Gilens, Democracy in America?, loc. 3598.

114. Chomsky, How the World Works, 208.

115. Hartmann, Unequal Protection, 243.

116. James Leach, “Citizens United: Robbing America of Its Democratic Idealism,” Daedalus, Spring 2013,

117. “New York Ratifying Convention. First Speech of June 21 (Francis Childs’s Version), [21 June 1788],” Founders Online, National Archives, (emphasis added).

118. “From John Adams to John Taylor, 17 December 1814,” Founders Online, National Archives,

119. “Constitutional Convention. Remarks on the Term of Office for Members of the Second Branch of the Legislature, [26 June 1787],” Founders Online, National Archives,

120. Reich, System, 165.

121. Gregory Salmieri, “On the Role of Voting in the American System of Government,” A New Textbook of Americanism: The Politics of Ayn Rand, edited by Jonathan Hoenig (Chicago: Capitalistpig Publications, 2018), 79.

122. Richard A. Epstein, How Progressives Rewrote the Constitution (Washington, DC: Cato Institute, 2006); Timothy Sandefur, The Right to Earn a Living: Economic Freedom and the Law (Washington, DC: Cato Institute, 2010).

123. Robert A. Levy and William Mellor, The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government and Eroded Freedom (New York: Sentinel, 2008), chaps. 1–2, 11.

124. Page and Gilens, Democracy in America?, loc. 954–63, 2601–8, 2952, 3592, 3904, 3939, 3954, 3994–4002.

125. Page and Gilens, Democracy in America?, loc. 916.

126. James Madison, “The Federalist Papers: No. 10 [November 23, 1787],” Avalon Project,

127. Brink Lindsey and Steven M. Teles, The Captured Economy: How the Powerful Enrich Themselves, Slow down Growth, and Increase Inequality (New York: Oxford University Press, 2017), 9.

128. Conor Lynch, “America’s Libertarian Freakshow: Inside the Free-Market Fetish of Rand Paul & Ted Cruz,” Salon, April 14, 2015,

129. Luigi Zingales, A Capitalism for the People: Recapturing the Lost Genius of American Prosperity (New York: Basic Books, 2012), 244.

130. Early in their article, Munger and Villarreal-Diaz argue that “it is at least possible that cronyism is intrinsic to and not separable from capitalism.” By the end of their article, they conclude that cronyism is intrinsic to capitalism, arguing that, “it is wrong to dismiss such problems [of cronyism] as having nothing to do with markets. The road to cronyism leads directly through capitalism”; Michael C. Munger and Mario Villarreal-Diaz, “The Road the Crony Capitalism,” Independent Review 23, no. 3 (Winter 2019): 343.

131. Randall G. Holcombe, Political Capitalism: How Economic and Political Power Is Made and Maintained (Cambridge: Cambridge University Press, 2018), 164–65; Randall G. Holcombe and Christopher J. Boudreaux, “Regulation and Corruption,” Public Choice 164, nos. 1–2 (July 2015): 75–85,

132. Abolishing the regulatory-entitlement state would not end all lobbying. New technology sometimes creates the need for government to define property rights. The businesses affected would probably lobby, as they have a legitimate interest in how those rights are defined.

133. Although the Constitution was a brilliant, epoch-making achievement, it did not establish a complete separation of economy and state. Nor did it fully protect individual rights, as it allowed the continued existence of slavery. The principles laid out in the Constitution, however, made possible the eventual abolition of slavery.

134. For an elaboration of such a philosophy, see Craig Biddle, “Individualism vs. Collectivism: Our Future, Our Choice,” The Objective Standard 7, no. 1 (Spring 2012): 19–28. And for a dramatization of this philosophy, see Ayn Rand, The Fountainhead (New York: Signet, 1943).

135. Robert B. Reich, I’ll Be Short: Essentials for a Decent Working Society (Boston: Beacon Press, 2002), 6.

136. Theodore Roosevelt, “Index C, Collectivism and Individualism,” Theodore Roosevelt Association,

137. Franklin D. Roosevelt, “Address to the National Conference of Catholic Charities,” October 4, 1933, (emphasis added).

138. Lyndon B. Johnson, “Remarks in Raleigh at North Carolina State College,” October 6, 1964, (emphasis added).

139. Lyndon B. Johnson, “Remarks at a White House Conference With the Governors,” March 18, 1967, (emphasis added).

140. Barack Obama, “Remarks in Independence, Missouri: ‘The America We Love,’” June 30, 2008, (emphasis added).

141. Bakan, Corporation, 149.

142. Hartmann, Unequal Protection, 31.

143. Lindsey and Teles, Captured Economy, 17–18.

144. Edwards, “The Case for Transcending Partisanship.”

145. Cost, Republic No More, 191.

146. John Hawkins, “The Conservative Case for Breaking up Monopolies Such as Google and Facebook,” National Review, May 16, 2018,

147. Howard E. Gardner, “Reestablishing the Commons for the Common Good,” Daedalus, Spring 2013,

148. Korten, When Corporations Rule the World, 107.

149. Korten, When Corporations Rule the World, 118.

150. Howard Zinn, “A Little Disquisition on Big Government,” Third World Traveler,

151. Holcombe, Political Capitalism, 169, 174–78, 230–31, 271.

Return to Top
You have loader more free article(s) this month   |   Already a subscriber? Log in

Thank you for reading
The Objective Standard

Enjoy unlimited access to The Objective Standard for less than $5 per month
See Options
  Already a subscriber? Log in

Pin It on Pinterest