Corporate Capture: Can We Find a Way Out?

This article, published originally by Nonprofit Quarterly, from Nonprofit Quarterly Magazine’s summer 2024 issue, “Escaping Corporate Capture.”

The aircraft manufacturer Boeing, granted the authority by the Federal Aviation Administration in 2009 to self-certify compliance, uses that authority to cut regulatory corners—with tragic results.A 10-person advisory panel convened by the Federal Drug Administration in 2002 looks at an alarming rise in prescriptions for a Purdue Pharma drug known as OxyContin, but half of the members have ties to the company and no action is taken, allowing opioid overdose deaths to continue to climb.A United Nations– sponsored Conference of the Parties, the world’s leading climate gathering, is led in 2023 by Dr. Sultan al-Jaber, a “state oil company chief executive,” who, notes the Associated Press, “got the world to agree to transition away from fossil fuels while still being able to pump ever-more oil”—the horrifying effects of which can already be seen in mounting climate-related disasters.3

This is corporate capture, whereby agencies meant to control corporate behavior instead are controlled by corporate leaders to advance their economic interests.But considered more broadly, corporate capture extends far beyond the capture of a few government agencies; indeed, over time, it has developed a stranglehold on our economy and life.

Corporate capture is evident not just in regulatory agencies but also in elections, the halls of government, the media, music, art, and any other cultural sites corporate elites can get their hands on. Corporate capture is visible too in the names adorning the walls of nonprofit university and hospital buildings. It can even be found in the thinking of nonprofit and movement activists and leaders.

Indeed, the scope of resulting corporate control and influence has been astonishingly broad. Decades ago, Philip K. Dick asked if androids dream of electric sheep.We won’t hazard a guess as to the psychology of androids, but we can say with certainty that corporate messages have entered human dreams.

Life as Commodity

In 1848, Karl Marx and Friedrich Engels observed that the capitalist class was “like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells.”Today, approaching two hundred years later, the modern corporation has amassed and harnessed spellbinding and mythmaking powers that Marx and Engels might scarcely have imagined.

More and more of society has been converted into commodities—that is, items that can be bought or sold. But the corporate form, per se, is not the problem—the corporation is just a creature of law that limits individual liability. Rather, the primary challenge is the accumulation of wealth and power that the corporate form has enabled a small number of owners of private, for-profit corporations to accrue. And, over time, the for-profit corporation has occupied more and more social space; its tentacles reach into politics, our economy, our daily life, and—perhaps most insidiously—our culture and ideas.

Politics. These days, it is often noted that US democracy is in peril.And it is true that a rising authoritarian tide threatens civil liberties and democratic institutions like Congress. But even absent open dictatorship, US government today is less a democracy than a plutocracy, ruled by the wealthy few. This is neoliberalism, which is best understood as a politics in which the state acts to support the concentration of wealth among an elite few through its taxation, spending, and regulatory policies.In 2014, political scientists Benjamin Page and Martin Gilens published a study that asked a simple question: Do policy choices reflect elite preferences or those of the people at large? Their empirical findings were clear: “[B]usiness interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”9

Decades earlier, another political scientist, Thomas Ferguson, came to a similar conclusion, developing what he called the “investment theory of politics.” Ferguson’s main finding was that the US Democratic and Republican parties are best thought of as “blocs of major investors who coalesce to advance candidates representing their interests.”10

As nonprofits attempt to solve social problems, they must solicit both government funding and private funding from philanthropy and, occasionally, even from corporations. What this means is that progressive agendas depend on funding sources that are ultimately invested in preserving the profit motive.Going even further back, in 1977, Charles Lindblom, onetime American Political Science Association president, authored Politics and Markets: The World’s Political-Economic Systems, in which he argued that in capitalism, business occupies a “privileged position” that offers business elites disproportionate policy influence.11 Lindblom wrote this more than 30 years before the US Supreme Court’s decision of Citizens United, which removed many restrictions on corporate political spending.12 Lindblom’s point was that without spending a cent, corporations, by dint of their mere economic power, tilt politics in their direction.

Economy and daily life. A 2021 study by McKinsey Global Institute found that, globally, “The business sector overall contributes 72 percent of GDP [gross domestic product]” and, further, that “corporations with more than $1 billion in revenue…increased their global value added by 60 percent relative to their home countries’ GDP since 1995.”13 In other words, corporate GDP is growing much faster than the economy as a whole. More broadly, the data show more and more corporate wealth concentrated in fewer and fewer hands. A long-term study of US corporate concentration from 1918 to 2018 by three economists (published in 2023 by the University of Chicago) found, “Since the early 1930s, the asset shares of the top 1% and top 0.1% corporations have increased by 27 percentage points (from 70% to 97%) and 40 percentage points (from 47% to 88%), respectively.”14 Put differently, a subset of one in one thousand companies currently owns nearly nine-tenths of total corporate net worth in the US economy.

Additionally, corporate influence in daily life is growing, as many parts of the economy that once existed outside the corporate sphere are now incorporated within it. One heartbreaking example can be seen in how children are raised. Hours spent in unstructured play are declining; hours spent in structured corporate social media consumption are rising.

A 2016 United Kingdom survey found that children’s playtime had fallen from 8.2 hours a week in their parents’ generation to just over 4 hours a week; US data are similar.15 Relatedly, a 2021 survey by the US nonprofit Common Sense Media found that daily screen use was 5 hours and 33 minutes—49 minutes higher than just two years earlier.16

While establishing direct causality is complicated, the two trends do appear to be connected.17 More broadly, in terms of the theme here, much of what used to be childhood outdoor play existed outside the corporate sphere. By contrast, nowadays, youth are much more likely to be consuming multinational corporate products and services via mobile apps.

Culture and ideas. Corporate power has invaded our thoughts and dreams. To take one example, the phrase “the American dream” has come to be defined in ways that emphasize the individual pursuit of wealth. This is ironic. James Truslow Adams, the person who is credited with coining the phrase in 1931, was referring to “well-being that is held in common and therefore mutually supported.”18

Adams, writes Sarah Churchwell, a professor of American literature, created the notion of “the American dream” as a critique of a nation that he saw as having in the 1920s “lost its way by prizing material success above all other values.”19 Churchwell adds, “The American dream was rarely, if ever, used to describe the familiar idea of Horatio Alger [–inspired] individual upward social mobility until after the Second World War.”20

Nonetheless, as Alissa Quart demonstrated in her book Bootstrapped: Liberating Ourselves from the American Dream, the idea that success should be defined in economic terms and is determined by one’s own efforts alone is now deeply ingrained in US society. And the effects have often been politically demobilizing. “The cult of individualism,” Quart writes, has led to a “nagging sense that our failure is ours alone.” This myth, she adds, “drops the blame for inequality in our laps, while our flawed systems get off scot-free.”21

What about Nonprofits?

The ethos of individualism that Quart describes has its corollary effects in the nonprofit sector, and even in social movements that are seeking to advance economic justice. First, as Quart explains, the emphasis on self-reliance undermines support for public sector provision of public goods. This results in what Quart calls a “dystopian social safety net,” with many nonprofits placed in the position of putting together “do-it-yourself, taped together programs Stuff that shouldn’t exist but does because we have to rely on ourselves.”22

[Shawn] Fain put the conflict plainly: “People accuse us of waging class warfare. There’s been class warfare going on in this country for the last forty years. The billionaire class has been taking everything and leaving everybody else to fight for the scraps.”

The role of the nonprofit sector since the 1960s has been to try to fill in the gaps of austerity created by the decline and privatization of the welfare state. The result of this explosion is that nonprofits are subject to the same neoliberal pressures that plague the social welfare state.23 As nonprofits attempt to solve social problems, they must solicit both government funding and private funding from philanthropy and, occasionally, even from corporations. What this means is that progressive agendas depend on funding sources that are ultimately invested in preserving the profit motive. In an interview with Jacobin, Melissa Naschek sums up the fact of corporate capture in nonprofits succinctly: “This leaves nonprofits trapped in an inescapable contradiction: politically they are beholden to the very class that is hoarding the resources necessary to expand social spending.”24

Additionally, as Quart has pointed out, not just failure but also success is seen as “self-made.”25 This encourages heroic notions of individualized leadership at the top. Law professor and activist Dean Spade has noted that the students he teaches often seek to be “nonprofit executive directors” even as they lack a clear idea of what they want to do. “The form predates the content,” Spade observes. “That is worrying; it is doing something to the imagination.”26

The field of nonprofit management, in short, has been deeply harmed by corporate capture. This affects not just nonprofits but also movements for liberation today. As Maurice Mitchell of the Working Families Party powerfully argued in a 2022 essay, movements face a yin and yang between exaggerated notions of individualism that can make effective management impossible and exaggerated notions of collective governance that can make effective organizing exceedingly difficult.27 Writing a year later from the standpoint of solidarity economy organizing, Nicole Wires, network director of the Nonprofit Democracy Network, noted a similar dynamic, pointing out that the first stage of activists moving away from corporate models of management and leadership often leads to what she calls “counter-solutions,” which she defines as “oversimplified solutions that are the obvious opposite of the issue at hand.”28 Wires adds that if movement groups fail to move beyond these binaries, they can get stuck in a destructive loop that undermines their liberatory goals.

 

This article was originally published by Nonprofit Quarterly at https://nonprofitquarterly.org/corporate-capture-can-we-find-a-way-out.

Image: The Universe Delivers” by Yvonne Coleman Burney / www.artbyycolemanburney.com

 

Going Further:

About the Lead Author

Steve Dubb
Steve Dubb
Steve Dubb is senior editor of economic justice at NPQ, where he writes articles (including NPQ’s Economy Remix column), moderates Remaking the Economy webinars, and works to cultivate voices from the field and help them reach a broader audience. Prior to coming to NPQ in 2017, Steve worked with cooperatives and nonprofits for over two decades, including twelve years at The Democracy Collaborative and three years as executive director of NASCO (North American Students of Cooperation). In his work, Steve has authored, co-authored, and edited numerous reports; participated in and facilitated learning cohorts; designed community building strategies; and helped build the field of community wealth building. Steve is the lead author of Building Wealth: The Asset-Based Approach to Solving Social and Economic Problems (Aspen 2005) and coauthor (with Rita Hodges) of The Road Half Traveled: University Engagement at a Crossroads, published by MSU Press in 2012. In 2016, Steve curated and authored Conversations on Community Wealth Building, a collection of interviews of community builders that Steve had conducted over the previous decade.

The Latest

Ash Esposito: Weaving Neighbors Together in Baltimore, MD

Ash Esposito shares her story here as part of Aspen Institute's Weave: Social Fabric Project of a journey from...

Featured

More Articles Like This