This is What Regulatory Capture Looks Like

How many times have you heard a politician, addressing some issue of regulatory policy, speak of “all the stakeholders” being at “the table?” That phrase has become popular recently, in particular among sponsors of maximalist copyright law proposals like SOPA and ACTA. “All the stakeholders had seats at the table — the RIAA, MPAA, Microsoft — the whole spectrum from A to B.”

The exclusion of any “stakeholders” who don’t stand to benefit from the regulatory regime they shape isn’t coincidental. The WIPO (World Intellectual Property Organization) just made that clear. Last year, Pirate Parties International (a federation of national Pirate Parties) asked for observer status at WIPO. The U.S. delegation lobbied strenuously against their inclusion, on the grounds that Pirate Parties “don’t support the objectives” of WIPO. WIPO, accordingly, has just officially blocked the Pirate Parties’ request.

Now if you’re naive, you might think the “objectives” of the WIPO are simply to formulate “intellectual property” policy, with the nature of the policies it hammers out being an open question to be arrived at through a vigorous process of pluralistic debate. You dummy! No — WIPO’s objective is to craft global copyright policies that serve the interests of Big Content.

But this is how it always works. There’s a certain kind of liberal who admits that regulatory capture has happened and does happen, but wouldn’t necessarily have to happen if “progressives” were just a little more vigilant, or if we passed the right campaign finance laws, or something. That’s just not gonna happen, by the very nature of things in a corporate capitalist socio-economic system regulated by a capitalist state.

And no, Chris Matthews — in the unlikely event you’re reading — this isn’t a “crazy conspiracy theory” about self-consciously evil corporate interests gleefully rubbing their hands together and chortling as they pull puppet strings behind the scenes. It’s simply the recognition that, in a society where social, economic and political functions are concentrated in the hands of a few large, hierarchical institutions, such institutions are likely to cluster together into interlocking, functionally oriented complexes. These complexes are more apt to be characterized by cooperation than by competition.

By definition, the state in a corporate capitalist society sees its function as guaranteeing the stability of an economy dominated by large corporations — accepted without question as the normal state of affairs by everyone involved in the policy process. Even “progressive” capitalists and “patriotic billionaires” like Gates, Buffet & Co., see a successful economic policy in terms of guaranteeing stable output, employment and profits over the long run, and avoiding any actions that would result in large-scale capital flight. Those who work within the system see it as inevitable, and any alternative as unimaginable.

Given these structural preconditions, even in the absence of conscious corruption, it is likely that regulatory and policy-making bodies will tend to promote the long-term interests of the regulated as their primary concern. This is because even the most civic-minded people in these circles genuinely believe that “what’s good for GM is good for America.” To think otherwise would entail questioning the most fundamental institutional presuppositions of our economy as it has existed for over 150 years. And to be frank, people who wind up in second- and third-tier cabinet positions and corporate board rooms aren’t the sort to do that kind of questioning.

Of course conscious, deliberate corruption is there. Create a society built on interlocking directorates of a few hundred of the most powerful individuals in politics, economics, culture, and the military, and they’re bound to get cozy and discuss all kinds of stuff after meetings are officially adjourned. My point is, corruption and conspiracy are not essential to the system. The basic nature of the system — a close alliance of state and corporate power, limiting competition and guaranteeing long-term profit — would be the same if there weren’t a bit of corruption. Corruption and conspiracy are just icing on the cake — or if you prefer, grease for the wheels.

So, liberals, don’t think the solution to corporate-state capitalism is to make it less corrupt. The problem is not that it’s corrupt. It’s that it’s corporate-state capitalism.

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