People Who Live in Glass Houses
by
Andrew Bard Schmookler *

For months now we've been hearing the Republicans complaining about the money that organized labor is putting into the political campaigns of this election season.

Their complaint is not, of course, couched in terms of the sheer self-interest of the Republicans. The fact that the unions are pitting their resources against the Republican party that has worked to undermine them as far as memory reaches is presumably irrelevant. No, the issue is presented as one of justice-- justice for the working men and women whose dues provide the funds to the unions and to the AFL-CIO. It's not fair, say the Republicans, for the leadership of the unions to be spending this money for political purposes that not all of the dues-paying members support.

An interesting argument, this. But I suggest that it's one the Republicans might think twice before promoting it publicly. For the Republicans, whose financial lifeblood comes predominantly from the great aggregations of corporate power, are themselves living in a glass house.

It is certainly true that not all members of the labor unions agree politically with their leadership. But at least that leadership is elected more or less democratically. I don't agree with how all my tax money is spent either, but that doesn't render it unjust for the government elected by a majority of my fellow citizens to spend my money for purposes I don't support.

Look, however, at the typical large American corporation. The corporate executives that run these huge organizations control trillions of dollars worth of resources, next to which the funds at the command of the unions are a pittance. And whose wealth is it that these corporate leaders are controlling? Why, the stockholders, of course. In America, that great bastion of the rights of private property, everything the great corporate leviathans do is done in the name of the stockholders.

And who are these stockholders? Just about all of us. Even if we don't invest in the stock market or buy mutual funds, if we have some kind of a pension plan we are likely to own a piece of the rock, and of Philip Morris, and General Motors and others of these corporate giants.

Tell me, when was the last time you were asked by a corporation whether you approved of the PACs they fund, or the lobbying they do?

The corporate leaders might say that they wield their political clout according to what they see as the best interests of the stockholders. Plausible argument, perhaps, but in this no different from what the leaders of the AFL-CIO can say about what they are doing with union resources. The union member who disagrees with his union about whether a particular candidate should be supported is no more aggrieved that the stockholder in General Motors who disagrees with the company's trying to kill regulations requiring greater fuel economy.

The people who run these powerful companies might say that the stockholders who disagree with their politics are only a minority of all their stockholders. Even if this were true, that would not make the spending of corporate money for political purposes any more fair than what the Republicans are complaining about with the unions. Even the Republicans admit that it is only a minority of the union membership that disagrees.
But in fact, the corporations' claims to be representing their stockholders' political views are much more dubious than the unions' claims to be representing their members. The leadership of the unions must regularly stand for direct election by the rank-and-file, but the mandate of the corporate executive is really almost entirely a fiction.

This is the dirty secret of American capitalism: our greatest concentrations of "private" wealth are really controlled not by their owners but by self-perpetuating systems of governance. They are run by officers approved by boards of directors who, in turn, are largely selected by the executives they oversee. Oh, sure, stockholders "vote," but it almost never really means anything but rubber-stamping with their proxies what the self-perpetuating bureaucracy has proposed. For all our waving the banners of private property, the power of the Fortune 500 has almost nothing to do with the real owners controlling what is done with their property.

I called this the dirty secret of American capitalism, but actually, it is not a secret: it has been known and discussed in business schools and texts for more than half a century. But we are so practiced at ignoring this fact and its profound implications that people like Haley Barbour, the national chairman of the Republican Party, can stand before us, flush with the funds of corporate PACs, and complain, in all evident sincerity, about the injustice of union dues being used to fund Democratic candidates.

Before he throws that stone, he should look around at how the rent on his own house is paid.

*Andrew Bard Schmookler is the author of The Illusion of Choice: How the Market Economy Shapes Our Destiny, published by SUNY Press.