America Incorporated

What is the American Dream? The inventor of the idea himself, James Truslow Adams describes it as “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” Adams would be disappointed to find that today, very few ever see that opportunity- the working class in America doesn’t get that chance to “pull oneself up by one’s bootstraps” (Hart-Landsberg). Corporate power in America, aided by a neglectful government, serves as the one-ton weights on the bootstraps of the vast, yet powerless, majority. While the top 1% become exceedingly richer, the bottom 99% are buried under increasingly high costs. As evidenced by the political double standard, suffering working class, and economic inequality which runs rampant in America, corporate America must be checked in order for the American economy to ever be balanced.

To illustrate, throughout the past century, American corporations and the government have grown increasingly codependent, tied in a mutually beneficial relationship of political logrolling- but they weren’t always. When America’s first monopolies formed in the 1890s, the Sherman Antitrust Act was the first legislative “check” of corporate power, and limited the large-scale business mergers that allowed companies like Standard Oil to become so overwhelmingly powerful that it eliminated any and all competition in the steel industry. Then, these regulations were implemented in the name of stimulating the economy through the necessary existence of competition within industries. Less than a decade later, however, emerged Boss Tweed and his fellow political machines. While the government was previously keen on limiting corporate power, Senator Tweed of New York offered exclusive government services, such as lucrative contracts and business licenses, to businesses which agreed to politically and financially support him and his ring (Lemann). The government began to depend on the financial support and public influence won by corporations’ monopolistic motives. By the end of the 1800s, big business sat on the shoulder of the government. 

This changed with Theodore Roosevelt’s famed trust-busting project, during which he dissolved forty-four monopolies which he deemed harmful to the public- Roosevelt created a new, more socially supportive role for the federal government in regulating business, and thus the economy, which had never before been attempted so successfully. Federal involvement in the economy, though it waned during the height of prosperity, achieved an all-time high during the Great Depression, when speculative ventures made by unchecked banks caused the worst economic downturn in American history. Franklin Delano Roosevelt took complete control of America’s banks through the New Deal programs he instituted- many of which are still in place today- in order to regulate the risky investments banks were making and insure his people’s money against mishandling in the future. Unfortunately, these measures were disrupted by Reagan’s deregulation policies fifty years later, which loosened necessary restrictions on industries like commercial airlines, allowing the most powerful airlines to fix prices and limit competition, and thus to form modern-day monopolies (Hershey). From then on, the government has colluded with big business in such ways, allowing corporations to grow in power and disproportionately advantage themselves over the American people.

A prime example, as UCLA Professor of Law Adam Winkler states, has been the recent rush for human rights by corporations, largely through Supreme Court cases- “corporations have built and maintained their power through the courts and the judiciary,” turning the “Constitution itself into a shield against unwanted regulation of the economy.” Through Supreme Court cases, corporations have won rights previously thought to apply only to the people, such as the freedoms of speech, press, and religion, the rights to due process of law and to compensation for property taken by the government, and the freedom from unwarranted searches and seizures, among others. The most contentious, Winker continues, is the “freedom to political speech recognized by the Supreme Court” in the case Citizens United v. FEC. The non-profit group Citizens United had made a politically charged film about Hilary Clinton, a candidate in the presidential primary elections at the time, and the Court debated whether Citizens United was allowed to pay cable companies to make the movie available for free on their platforms just thirty days before the election. This directly challenged the Federal Election Campaign Act, which prohibited corporations from using their funds to produce electioneering or express advocacy communications within thirty days of a primary election or sixty days of a general election (Federal Election Commission). 

When the Supreme Court decided to allow corporations to make independent expenditures and produce uninhibited electioneering communications, effectively giving extremely powerful and influential corporations the same First Amendment rights that mere individuals hold to spend money on election advertisements, Americans across the nation realized that their government had officially relinquished their rights to democracy. When a money-hungry corporation is given a political voice, that highly influential voice can be bought for any amount of money a politician is willing to pay to earn political support. Any politician or political group can influence the entire consumer base of one or more companies, thus biasing the political opinions of millions of Americans and opening the opportunity for further political corruption, now that politicians have come to depend on the support of corporations. As Winkler concludes, “so long as the Supreme Court adheres to the view that corporate speech is no different than any other speech, any reform designed to limit the voice of corporations in the electoral process is vulnerable.” Action must be taken to separate the power of corporations from that of the government through political and constitutional reform to keep our right to unbiased democracy as an American people.

In further explanation, taking another look back at the Great Depression tells us just how much the overwhelming power kept by corporations has repeatedly caused harm to the American economy. When America’s banks were left unregulated by the government during the 1920s, it was the monopolistic greed for as much money as they could get, as quickly as they could get it, that led them to make risky investments to which their customers’ money was never returned. Soon, so many of these speculative investments had been made that when the stocks grew to unsustainable prices, banks didn’t have the money to allow their customers to withdraw their deposits; the collapse of the banking system in the 1930s was largely the fault of the banks themselves. (Lemann) President Roosevelt realized that it was a lack of government intervention and regulation of these now-corporate banks that allowed them to make those misguided investment ventures. After Hoover’s unsuccessful attempts to recover the economy by pushing money back into the hands of the top CEOs and hoping that it would trickle down, FDR implemented some of the most socially supportive programs America has ever seen- and it was these measures that did successfully fix the economy. For one, through the Bank Holiday in 1933, the president completely shut down the entirety of the American banking system, as he knew they couldn’t be trusted to make informed decisions themselves. Then, in the Emergency Banking Bill, FDR effectively took full control of all banks in America and decided which were allowed to reopen, with what amount of money, and for how long. This let the American people know that they could again trust their national banks to keep their money safe, thus reinvigorating the economy. In addition, through the Glass-Steagall Act, which still exists today, President Roosevelt was able to fully insure his people’s money against bank irresponsibility, which banks themselves had clearly been unable to do prior. The social programs, such as these, of the New Deal were integral in the restimulation of the American economy during the worst economic downturn in history, and such programs can and should be used to fix the similar economic issues Americans face today.

One such issue is the exponentially-growing rate of economic inequality in America. The widening gap between America’s rich and poor not only disparages those at the bottom of the caste system, but also is the cause of America’s worst economic issues- as Heather Boushey cites, the “high home foreclosures, high unemployment, and an inability to get ahead” faced by Americans across the country, as well as the “Great Recession and the subsequent slow recovery.” The high rate of economic inequality is explained succinctly by Tufts Professor of of Mathematics Bruce Boghosian in his mathematical model of the American economic system; while corporations and the government have supported the idea of a trickle-down economy in which money paid to the people on top eventually trickles down to equally benefit the people on the bottom, Boghosian’s model demonstrates that “far from wealth trickling down to the poor, the natural inclination of wealth is to flow upward,” meaning the natural inclination of a “free-market economy is one of complete oligarchy.” This reality has proved itself multiple times in history, namely Hoover’s unsuccessful Reconstruction Finance Corporation Act during the Depression- he refused to give relief funds directly to those suffering the most from the Depression, in fear of the erosion of work ethic. However, those funds didn’t trickle down to the working class as he’d hoped, and instead worsened the economic crisis by increasing the inequality between the rich and the poor. There is only one way current inequality can be resolved: direct wealth redistribution by the government, through socially supportive legislations (Boghosian).

Corporate America must be checked in order for the American economy to ever be balanced. Through social programs to check corporate power, governmental reform to reduce the risk of corporate lobbying and government corruption, and redistribute the wealth concentration between America’s economic classes, the suffering of the working class in America and the overall disintegration of the economy can be solved.

Works Cited

Adams, James Truslow. The Epic of America. Boston: Little, Brown, and Company, 1931.

Boghosian, Bruce M. "Is Inequality Inevitable?" Scientific American, 1 Nov. 2019, www.scientificamerican.com/article/is-inequality-inevitable/. Accessed 31 Jan. 2022.

Boushey, Heather. "Economic Inequality Is Not Sustainable." Center for American Progress, 11 Dec. 2011, www.americanprogress.org/article/economic-inequality-is-not-sustainable/.

"Citizens United v. FEC." Federal Election Commission, Feb. 2010, www.fec.gov/legal-resources/court-cases/citizens-united-v-fec/.

Hart-Landsberg, Martin. "Magical Bootstraps and the Struggles of Working Americans." Monthly Review, 14 Aug. 2018. Monthly Review, mronline.org/2018/08/14/magical-bootstraps-and-the-struggles-of-working-americans/. Accessed 26 Jan. 2022.

Hershey, Robert D., Jr. "Airline Deregulation Debated." New York Times, 28 Oct. 1968, www.nytimes.com/1986/08/28/business/airline-deregulation-debated.html.

Horowitz, Juliana Menasce, et al. "Trends in Income and Wealth Inequality." Pew Research Center, 9 Jan. 2020, www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/. Accessed 27 Jan. 2022.

Lemann, Nicholas. "Why the Spectre of Size Has Always Haunted American Politics." The New Yorker, 21 Mar. 2016. www.newyorker.com/magazine/2016/03/28/why-big-business-and-big-government-haunt-america.

Winkler, Adam. "How American Corporations Used Courts and the Constitution to Avoid Government Regulation." Promarket, Chicago Booth School of Business, 12 Feb. 2021, promarket.org/2021/02/12/corporations-supereme-court-constitution-avoid-regulation/. Accessed 28 Jan. 2022.