Tackling Corporate Power Head-On: The Urgency of Fixing Our Democracy

(image credit: lightbrigading via flickr under Creative Commons Attribution-NonCommercial 2.0 license)

By Sarah Stranahan

The New Economy Coalition defines the three pillars of a new economy as “Justice, Sustainability and Democracy.” In this essay I will make the case that reclaiming democracy is a strategic priority in the transition to a new economy.

While there is a great deal of positive energy focused on workplace democracy and collective ownership and decision making at the firm or local level, I want to focus on democracy writ large, the mechanics of creating representative and effective self-government on national scale.

The democracy movement includes important work defending voting rights and reforming and innovating outmoded systems like voter registration and redistricting, but at its core is the effort to decouple private wealth and political power by radically reforming the way we finance political campaigns.

This robust movement to reclaim democracy has the capacity to:

i.    Disrupt the dynamics of oligarchy
ii.    Harness the economic engine of the state
iii.    Re-write the rules of the political economy
iv.    Change the global impact of the US
v.    Accelerate non-violent transformative change


I.    Disrupting the Dynamics of Oligarchy

If oligarchy is defined as a government in which an elite group exercises political control to advance corrupt and self-serving ends, we are living in a mature oligarchy. A rigorous study of public policy and public opinion by Martin Gilens from Princeton and Benjamin I. Page from Northwestern University supports this conclusion.

Thomas Piketty has provided the empirical evidence for what is logically obvious; capitalism, if uninterrupted, inexorably concentrates wealth. In fact, Piketty proves that whenever the rate of return on capital is greater than the rate of economic growth, disproportionate wealth will accrue to the owners of capital. 

What Piketty does not examine in as much detail is how great wealth translates into political power such that public policy privileges the owners of capital. For example, why are capital gains taxes lower than taxes on earned income?

Oligarchy is not a static condition. In fact, the decidedly un-virtuous circle between increasing concentrations of wealth and political power has an exponential dynamic. The more political power the wealthy have, the more they can make rules that help them increase their share of the wealth. In turn, these rules increase their ability to use that wealth to buy elections, candidates and policies, and increase their political power. These trends compound rather quickly, and, if history is predictive, usually evolve into outright tyranny or collapse into financial crises, armed conflicts or revolutions.

The most effective way to interrupt this negative feedback loop is to decouple the critical mechanism that translates wealth into political power- campaign finance.

82 percent of campaign contributions come from less than one half of one percent of the U.S. population. But even more alarming, 60% of all Super Pac contributions came from just 132 individuals. This donor class reaps both political power and economic benefits from their investments. Candidates court them, and once in office they promote public policies that protect and support their patrons, the same patrons whom they depend on to finance their reelection campaigns.

It should not surprise us that faced with this blatant corruption, voters turn to dangerous demagogues like Donald Trump, who do not depend on outside donors.

The American people do not like this unlimited campaign spending. 92% of them want our elected leaders to reduce the influence of money in elections. But by a narrow 5-4 vote the Supreme Court has tied the hands of Congress so that they cannot respond to this public outrage. They decided in Buckley v Valeo that, while regulating direct campaign expenditures is lawful, regulating independent election expenditures is a violation of the first amendment.

The 2010 Citizens United decision expanded corporate first amendment rights, allowing corporations to make unlimited expenditures from their general treasuries to influence elections. These laws make it literally illegal for Congress to limit corporate and individual political expenditures.


II. Harnessing the economic engine of the state

The immense economic power of the public sector could be a crucial accelerator to scale up the solutions we need to address outrageous extremes of inequality and avoid an even greater ecological crisis. Federal, sate and local governments account for more than 40% of GDP.

The scale of resources that the government can rapidly mobilize dwarfs both the slow spread of grassroots change, the self-interested interventions of certain portions of the private sector, and the meager and unaccountable contributions of philanthropy. Only state investment has the capacity to support large-scale interventions that increase both justice and sustainability.


III. Overruling the corporatist court

It is not just the size of the federal budget that makes it imperative to reclaim democracy. Our government writes the rules of the legal and economic system, both through public policy and by appointing the judges that determine the constitutional framework in which policy can be made.

The dominant political consensus, which privileges capital and corporate rights over workers, communities and the environment, has been carefully crafted by conservative elites. Over the past 50 years they have strategically invested in candidates, media, and organizing to capture the courtrooms.

The courts have given corporations the constitutional rights of human beings, prevented communities from regulating guns or fracking, allowed states to trample the voting rights of low income and minority populations, and upheld the contractual rights of investors over the economic well being of entire nations.

In the next few months they may make it illegal for unions to collect dues from the workers they represent, prevent public universities from considering race in admissions decisions, and allow states to drive abortion clinics out of business by enacting expensive, onerous and medically unnecessary regulations. The rules made by the courts matter as much, if not more, than the revenues earned by the government.


IV. The global impact of the US economy

The political economy is global. Climate is global. The struggle to reclaim US democracy is national. But transforming the US from a clumsy, wasteful and destructive hegemon into a responsible role model of good domestic policy would have a huge impact on the rest of the world.

I live in the United States and I enjoy all the benefits and responsibilities of citizenship. Speaking only for myself, I have neither the legitimacy nor the capacity to advocate for political change in India and China. The best thing I can do for the rest of the world is to try to put my own house in order.


V. We can do this - we have done it before

When American democracy has been threatened by oligarchy in the past, Congress and the states responded to public pressure and acted. When public outrage over the robber barons’ monopolistic grip on industry, banking, and government reached a peak, Teddy Roosevelt passed the Tillman Act, forbidding corporate contributions to political campaigns. When the copper barons bought and sold state Senators in Montana, the citizens of that state seized power and banned corporate spending in their elections.

But the Supreme Court has now tied the hands of Congress so they cannot respond to public outrage; they have decreed it unconstitutional for Congress to act to limit individual and corporate spending on elections.

When the Supreme Court gets the constitution wrong, we the people have the right (and I would argue the responsibility) to overrule the Court through a constitutional amendment. We have done it before, to abolish slavery, and to give women the vote, and we can do it again.

We can make it clear that money is not speech, and that Congress and the States have the right to regulate spending in elections. We can make it clear that corporations are not people, and have no constitutional rights to finance elections or to overrule democratic legislation and regulations. We need to restore the rights of Congress and the States to regulate spending on elections, and the only way to do that, short of a new Court, is through a constitutional amendment.

A constitutional amendment requires the support of 2/3 of Congress and ratification by ¾ of the states. A daunting task no doubt, but nonetheless a legitimate and effective process that has succeeded 27 times in the past.

What other strategies can generate the large-scale transformative and non-violent change we need? Will we transform global corporate capitalism one worker co-op at a time? Will we limit carbon emissions by organizing resistance to each new gold mine and fossil fuel extraction site? Will we build a new energy infrastructure while waiting for markets to favorably price renewable energy? We must deploy all of these, and more, strategies for change, but reclaiming democracy should be a shared priority for everyone dedicated to an economy that supports people and the planet.

The movement to pass a 28th amendment to reverse Buckley Valeo and Citizens United has made huge strides since it was started on the day of the ruling in 2010. Polls show 70-90% of Americans across the political spectrum support an amendment. Amendment resolutions have already passed in 16 states and more than 600 cities and towns, with New Hampshire, New York and Washington in the wings.

In 2014 the US Senate voted, 54 – 42 for the Democracy For All Amendment, which sought to overturn Buckley v Valeo. Even more importantly, in 2012, a coalition led by Greenpeace, the Sierra Club, the Communication Workers of America and the NAACP (in other words, big greens, labor, and national racial justice organizations) created the Democracy Initiative, an effort to jointly advocate for critical fixes to our democracy, including an amendment.

The movement for reform is strong and winning, powered by a handful of organizations and grassroots leaders on a shoestring budget. A week ago voters in Maine and Seattle resoundingly approved ballot measures aimed at minimizing the influence of big donors and empowering the voices of ordinary citizens in the political process.

Maine will now increase matching funds for qualifying small-donation candidates, increase fines for campaign finance violators, and require groups to disclose some donors on political ads. Seattle is now poised to be the first city in the country to use democracy vouchers, empowering all citizens to contribute to political candidates.

Imagine if we were able to invest even half the resources of say, the marriage equality campaign, on this game changing effort? The Roadmap for Organizing, a white paper written by Public Citizen, Common Cause, Free Speech For People and People for the American Way, estimated that the Amendment could pass within 15 years with a budget of $50 million dollars. Yes, that is a lot of money, and yes, that seems like a long time, but what are our chances of large-scale non-violent transformation if the oligarchy continues unchallenged?

The urgent demands for racial justice and the perils of our planet must not go unheeded. If you are serious about large-scale change, I hope you will join the struggle to reclaim our democracy.


Martin Gilens and Benjamin I. Page (2014). Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens. Perspectives on Politics, 12, pp 564-581. doi:10.1017/S1537592714001595.

Piketty, Thomas, and Arthur Goldhammer. Capital in the Twenty-first Century.

Sarah Stranahan has more than 20 years of experience in mission related investing, community organizing, and social change philanthropy. She is a founding board member of The New Economy Coalition and serves as its treasurer.