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The Business of America is Lobbying: How Corporations Became Politicized and Politics Became More Corporate (Studies in Postwar American Political Development) 1st Edition

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Corporate lobbyists are everywhere in Washington. Of the 100 organizations that spend the most on lobbying, 95 represent business. The largest companies now have upwards of 100 lobbyists representing them. How did American businesses become so invested in politics? And what does all their money buy? Drawing on extensive data and original interviews with corporate lobbyists, The Business of America is Lobbying provides a fascinating and detailed picture of what corporations do in Washington, why they do it, and why it matters. Since the 1970s, a wave of new government regulations and declining economic conditions has mobilized business leaders, and companies have developed new political capacities. Managers soon began to see public policy as an opportunity, not just a threat. . Ever since, corporate lobbying has become more pervasive, more proactive, and more particularistic. Lee Drutman argues that lobbyists drove this development by helping managers see the importance of politics and how proactive and aggressive engagement could help companies' bottom lines. Politics is messy, unpredictable, and more competitive than ever, but the growth of lobbying has driven several important changes that have increased the power of business in American politics. And now, the costs of effective lobbying have risen to a level that only larger businesses can typically afford. Lively and engaging, rigorous and nuanced, this will change how we think about lobbying-and how we might reform it.

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Editorial Reviews

Review

"With careful research and an unflinching eye for telling detail, Lee Drutman shows beyond any doubt how big money is strangling our democracy, and why the rest of us must take action before its last gasp. A vitally important book everyone who cares about America must read."
-- Robert B. Reich, Chancellor's Professor of Public Policy, University of California, Berkeley, and former U.S. Secretary of Labor

"Why do corporations lobby? How much do they spend to sway the federal government? Lee Drutman amassed the data to answer these hard questions and many others, including the hardest of all: what has lobbying done to American democracy?"
--David Frum, senior editor,
The Atlantic

"The ever-rising amount that corporate America spends to shape government policy is hard to ignore-except, it seems, in American political science. Now, finally, we have a meticulous, innovative, yet remarkably readable analysis of the post-1970s lobbying boom: why it happened, how it feeds on itself, and how it is reshaping American politics. This book is likely to start a boom of its own, forcing political science to grapple with its fresh findings and powerful new arguments."
-- Jacob S. Hacker, Stanley B. Resor Professor of Political Science, Yale University, and co-author of
Winner-Take-All Politics

"Drutman's description of corporate lobbying, standing alone, is worth the price of admission. But he pairs this empirical work with sound judgment, sensible policy proposals, and a clear-eyed view of the world. It's an irresistible combination."
-- Heather K. Gerken, J. Skelly Wright Professor of Law, Yale Law School

"In the most impressive compilation of new data and analysis on corporate relations with the US government ever completed, Lee Drutman's painstaking and comprehensive study shows clearly how important individual corporations are in the federal lobbying game. At the same time, he shows just how dependent corporate leaders are on their government relations staff for knowledge about the value of the work of that very staff; how corporate lobbying is often as ineffective as it is self-perpetuating; and how it raises the cost of democracy for everyone. This will be seen for years as the best book on corporate lobbying in America and should be read by everyone with concern about how our government really works."
--Frank R. Baumgartner, Richard J. Richardson Distinguished Professor of Political Science, UNC-Chapel Hill, and co-author of
Lobbying and Policy Change

"Drutman's book is a must-read for all who are concerned about the influence-peddling game. It alerts us to this growing threat to democracy itself, and it intrigues us to search for solutions."
--Craig Holman,
Public Citizen News

"...let me stress how edifying and entertaining I found The Business of America Is Lobbying. Anyone interested in gaining a better understanding of business, politics, and the growing intersection between the two should read Lee Drutman's book."
--Matthew Mitchell, George Mason University

"Drutman presents one of the more thoughtful analyses of lobbying in America that has been made so far."
--Jeff Madrick,
The New York Review of Books

"Drutman offers a package of reforms. The proposals call for greater representation of noncorporate interests and increasing government's policymaking capacity. The latter raises the question of why Congress has not yet empowered itself. One possible answer that lessens businesses' fault for the current state of affairs is that just as firms are skilled at constrained optimization in their market and nonmarket environments, politicians are skilled at structuring the rules that govern these environments to their own benefit."
--
Political Science Quarterly

Book Description

Provides a fascinating and detailed picture of what corporations do in Washington, why they do it, and why it matters.

Product details

  • ASIN ‏ : ‎ 0190215518
  • Publisher ‏ : ‎ Oxford University Press; 1st edition (April 16, 2015)
  • Language ‏ : ‎ English
  • Hardcover ‏ : ‎ 288 pages
  • ISBN-10 ‏ : ‎ 9780190215514
  • ISBN-13 ‏ : ‎ 978-0190215514
  • Item Weight ‏ : ‎ 1.14 pounds
  • Dimensions ‏ : ‎ 9.3 x 6.3 x 1.3 inches
  • Customer Reviews:
    4.1 4.1 out of 5 stars 44 ratings

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4.1 out of 5 stars
4.1 out of 5
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Top reviews from the United States

Reviewed in the United States on September 8, 2016
Excellent book if you want to learn a nuanced and accurate view on lobbying in America today. The book is a little dry and main points are repeated sometimes, but there are very few sources that are as in depth and well researched as this one. Not especially entertaining (although shocking at times), but extremely informative. If you want to understand lobbying in the US in Washington this is the book for you. No regrets on the purchase.
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Reviewed in the United States on September 13, 2017
During the past forty years, wealthy special interests have managed to create a cycle of increasing influence on US government leading to ever-increasing inequality (as well as decreasing protection for the environment and the economy). This influence is exerted by a variety of means, such as lobbying, campaign contributions, think tanks, university institutes, media outlets, and quasi-grass roots groups, all generously funded by the fruits of inequality. Author Lee Drutman focuses on the increasing importance of corporate lobbying as a component of this special interest influence on government. Lobbying by politically active groups increased from $200 million to $3.55 billion per year from 1983 to 2010 (corrected for inflation), of which more than three-quarters represented corporate America.

Prior to the 1970s, few corporations had their own lobbyists, and the trade associations that represented them were of limited scope. In the late 1960s and early 1970s congress passed a series of environmental and consumer regulations that business lacked the capacity to stop. This awakened the sleeping giant. Between 1971 and 1982, the number of firms with registered lobbyists in Washington grew from 175 to 2,445. The number of registered lobbyists in Washington reached a peak of 14,849 in 2007. Corporations’ approach to lobbying was initially merely reactive against their perceived enemies in labor and government. But as labor was defeated and government became much more pro-industry, corporate lobbying became more proactive and particularistic to exploit government as a source of profits and assistance. Also, lobbying increased from its own internal momentum (stickiness). Once fixed start-up costs were met, marginal costs for additional lobbying declined. Lobbyists themselves drove the process with the advantage of asymmetric information to sell their services to managers.

Corporations now have more political power than at any time since the 1920s and are favored by the status quo. Any major policy change now generally requires mostly one-sided lobbying, which is increasingly unlikely in today’s dense and competitive lobbying environment. The need to respond to many lobbyists also makes legislation more complicated. This complication hides the growing tendency to redistribute resources upward to the wealthy and the organized. Also, it overwhelms the limited capabilities of congressional staffers who must then rely on lobbyist specialists for information and drafting of bills. This imbalance is exacerbated by the siphoning off of more and more talent from the public sector by the much higher salaries in the lobbying industry. Between 2001 and 2011, almost 5,400 congressional staffers had registered as lobbyists with increased salaries of up to $200,000 to $300,000 per year.

Mostly, these changes benefit corporate interests because they increase the importance of money. While other interests may enjoy more legitimacy, corporations have substantially more money and easily overwhelm these interests. In 2012, corporations spent $56 for every $1 dollar spent by labor unions and $34 for every $1 spent by diffuse interest groups and unions combined. Financial companies that lobbied the most aggressively on mortgage lending and securitization in the 2000s subsequently engaged in the riskiest lending practices and were most likely to be bailed out after the crisis. Studies have shown that the more firms lobby, the lower their effective tax rate, and that policy outcomes lean toward corporate interests and wealthy donors.

Numerous examples are provided to show the overwhelming influence of high priced lobbying. Since the Tax Reform Act of 1986, more than 100 acts of congress have made almost 15,000 changes to the tax code. Consequently, in 2010, GE was able to use 1000 employees to file a 57,000 page tax return that enabled it to pay no federal taxes. The 2003 Medicare Modernization Act was essentially written by lobbyists to provide a prescription drug benefit, but without bulk government purchasing. This bill was a boon to industry of $242 billion over ten years at a cost of a mere $130 million in lobbying in 2003. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ran to 383,013 words after lobbying by 900 unique organizations, including 509 corporations and 201 trade associations. The Affordable Care Act of 2010 ran to 327,911 words after lobbying by 1,483 unique organizations, including 514 businesses, 242 institutions (mostly hospitals), 224 trade associations, and 162 professional associations.

Major lobbying operations in Washington are mostly conducted by the very biggest companies of which 127 account for almost half of lobbying expenditures. The top 20 companies on average employ 18 full time lobbyists and contract with 28 different Washington lobbying firms. On average, they have weighed in on 17 different issue areas, before 20 agencies, and on 63 different pieces of legislation. In 2007 Blue Cross/Blue Shield had the biggest lobbying presence with 56 in-house lobbyists and contracts with 30 different Washington lobbying firms. Still, the majority of publicly traded companies (close to 90%) do not have their own lobbyists and instead rely on trade associations for representation. Large companies participate in trade associations, as well. They do so to avoid ceding leadership to others, for coordination among companies for a strategy of divide and conquer, and to obtain cover on difficult issues for which they do not want to be up front. In 2007, 1,820 lobbying firms represented clients in Washington, but 75% had three or fewer registered lobbyists. The top 20 firms (about 1%) had from 26 to 145 registered lobbyist and took in 25% of lobbying revenue.

Recent reforms have included the 1995 Lobbying Disclosure Act, the 2006 Honest Leadership and Government Act (which slowed the revolving door for senators and staffers to lobbying firms and limited gifts but not campaign contributions from lobbyists), and Obama’s exclusion of registered lobbyists from his administration. These reforms have accomplished very little because they addressed the wrong problems. The author maintains that there is not much outright quid pro quo corruption or bribery. Instead, he identifies three genuine problems that need to be fixed: 1) Balance of power. The fight is not fair when corporate interests spend $34 for every $1 of unions and diffuse interests combined. 2) Complexity and asymmetry of information. When government actors are forced to rely on outside lobbyists, outcomes are distorted. 3) Particularism. Companies are increasingly oriented towards narrow, rent-seeking outcomes that crowd out the capacity of the political system to address larger problems.

The author goes on to suggest three solutions: 1) The Madisonian Solution—the best way to counter faction is for faction to counteract faction. This is complicated by the markedly unequal resources between corporations and their opponents and by the problem of collective action when issues affect a handful of companies greatly but most citizens only marginally. The solution would involve government subsidies to even the fight, similar to the use of court-appointed lawyers for indigent criminal defendants. One approach would be for a diffuse interest group to show that its perspective was shared by a threshold percentage of citizens (perhaps 25,000) and that it was outspent by a threshold ratio (perhaps 4 to 1). Another approach would be to establish an Office of Public Lobbying to identify and represent under-represented voices.

2) The Genuine Public Conversation Approach. In 1946, Congress passed the Administrative Procedure Act that resulted in most executive agencies requiring public comments from all interested parties and public responses from agencies before a rule could be finalized. What if Congress passed a Congressional Lobbying Procedure Act that established a uniform process for congressional lobbying? This process could require that advocacy be posted within 48 hours on a central website that would include a summary of the meeting, who attended, and what was advocated. This real-time electronic transparency would enable watchdogs to identify narrow provisions that are now hidden in legislation until they become very difficult to oppose or change. Also, it might make congressmen more wary about sneaking rent-seeking provisions into bills, and it might help to limit the complexity of bills.

3) Increasing Government Policy Capacity—which would limit the need for staffers to turn to lobbyists for help. Congressional policy capacity has declined while policy complexity and specialization have increased. Hence, Congress needs to improve working conditions and salaries of congressional staff to attract and retain more top policy talent. Congress could significantly increase the budgets of the Congressional Research Service (CRS) and Government Accountability Office (GAO) to increase their ability to provide independent expert advice and research. Congress could partner with universities, such as by providing a congressional clerkship program analogous to the judicial clerkship program. Finally, Congress could fund policy research consultants that would be available to congressional offices as the lobbyist equivalent of public interest law firms.

The author spends little time on campaign finance because corporations spend roughly 13 times more on lobbying than they do on PAC contributions. However, he does note that members of Congress spend far too much time fundraising. In the 2012 campaign cycle, 28% of the nearly $6 billion in contributions came from 0.01% of the US population. Those who can appeal to these donors can run for office, and those who can’t usually can’t. Appealing to wealthy donors involves taking policy positions they like and not wasting time on issues that don’t concern them. Partial or full public funding of elections (as is the norm in almost all other industrialized democracies) would help to level the playing field. However, it would not solve the expertise, complexity, and revolving door problems, and would likely push corporations to redouble their efforts for influence in other areas, including lobbying. Hence, focusing only on electoral reform has limited benefit and needs to be part of a larger package to reform the greatly exaggerated influence of wealthy special interest groups on government.
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Reviewed in the United States on April 4, 2015
This book manages to be incredibly readable without oversimplifying its important and complex subject. The compelling, data-rich foundation is brought to life by revealing interviews with corporate lobbyists, which provide a new and helpful perspective on the drivers of the problem. Perhaps most refreshing, Drutman offers solutions and new fodder for anyone engaged with improving the health of our democracy.
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Reviewed in the United States on October 23, 2015
Sad commentary on U.S. democracy
Reviewed in the United States on January 25, 2016
great book! well done. book is chock full of facts, charts, graphs etc. very thorough. great book. It's great to finally understand the subtleties of the who, what, why, where and when of lobbying. book poses many interesting questions as well.
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Reviewed in the United States on May 8, 2015
The Business of America is Lobbying: How Corporations Became Politicized and Politics Became More Corporate by Lee Drutman

“The Business of America is Lobbying” is a book about what lobbying involves and how it operates. Research fellow, professor with a Ph.D. in political science, Lee Drutman takes a professional approach and argues quite convincingly that corporate lobbying has reached its current persuasive position largely because lobbying has its own internal momentum. Lobbying begets lobbying. This straightforward 288-page book includes the following ten chapters: 1. The Pervasive Position of Business, 2. Why the Growth of Corporate Lobbying Matters, 3. The Growth of Corporate Lobbying, 4. How and Why Corporations Lobby, 5. How Corporations Cooperate and Compete, 6. How Corporations Make Sense of Politics, 7. How Lobbyists Perpetuate Lobbying, 8. Testing Alternative Explanations for Growth, 9. The Stickiness of Lobbying, and 10. The Business of America is Lobbying.

Positives:
1. A well-researched and well-referenced book.
2. An important topic that surprisingly doesn’t get as much attention as it deserves, the influence of lobbying in American politics.
3. A very good format. Each chapter clearly states what is expected and ends with a conclusion.
4. Takes a professional, analytical approach. Plenty of charts that complement the accessible narrative.
5. Clearly states the main goals of the book. “This book, by contrast, is far more focused on the self-perpetuating nature of political engagement, and the ways in which, once it gets started, organizational lobbying deepens and expands over time.”
6. Explains the why of lobbying. “…if corporate managers think that lobbying will help their company’s bottom line, then they will lobby. If not, then they won’t lobby.”
7. No shortage of numbers. “In 2012, politically active organizations reported $3.31 billion in direct lobbying expenses, down slightly from $3.55 billion in 2010 but up significantly from $1.82 billion just 10 years earlier and, controlling for inflation, almost seven times the estimated $200 million in lobbying expenses in 1983.”
8. Explains the what of lobbying. “I define lobbying quite broadly to mean any activity oriented towards shaping public policy outcomes, and I make the reasonable assumption that all corporate political activity is oriented towards shaping public policy outcomes.”
9. Explains how the growth of corporate lobbying influences policymaking. Makes the compelling case that growth of corporate lobbying has altered the policymaking environment in eight ways that are largely interconnected.
10. Explains why legislation is much more complex. “On the Affordable Care Act, 1,483 unique organizations lobbied on the bill.” “Policy complexity is valuable for those seeking to extract rents from government because it makes it hard to see just who is benefitting and how.”
11. A look at the history of corporate lobbying. “The most direct strike at corporate political influence was the 1907 Tillman Act, which banned direct corporate contributions to candidates.” “Several pharmaceutical lobbyists described the 1993–1994 healthcare debate as a wake-up political moment for industry, an observation that fits with empirical evidence showing that the number of healthcare companies with a Washington lobbying presence almost doubled between 1992 and 1994.”
12. A look at the various tactics of lobbying. “…changing the status quo requires more work than preserving the status quo.” “…informing clients and bosses about developments in Washington is a key part of what lobbyists do. So it is not surprising that, no matter the strategic approach, collecting information is always a part of it.”
13. Some revelations exposed. “Companies simply devote much more of their resources to lobbying than they do to campaign finance.”
14. Explores the role of trade associations versus lobbying by companies. “If most lobbying is done through associations, it suggests more cohesiveness in the lobbying community. If most lobbying is done through companies, it suggests more divisiveness in the lobbying community, with more companies focused on their own concerns.”
15. There is business philosophy spruced throughout the book. “The more managers (and people in general) understand cause-effect relationships, the more they tend to perceive their environment as controllable.”
16. Explores the perspective of corporate managers. “With more information and experience, managers can better develop more realistic policy goals.” “Corporate managers are not particularly savvy about politics.”
17. Explores three alternative hypotheses on how lobbyists perpetuate lobbying. “(1) lobbying grew because government got bigger; (2) lobbying grew because government devoted more attention to issues companies care about; (3) lobbying grew because companies got bigger.”
18. Provides empirical support for his theory that lobbying is sticky. Find out…
19. A look at the future of lobbying and what we can do to curtail its influence, albeit limited. Proposes three types of solutions.
20. Notes included.

Negatives:
1. More brains than heart. The book makes use of cold hard facts to the detriment of passion. Emotions play a pivotal role in our decision-making process and this book unfortunately strips the heart of such an important component. In short, I wanted a dose of passion into the mix.
2. As with most books of this ilk, the disease is better explored than the cure. The focus is clearly on what constitutes lobbying instead of what we can do as citizens to curtail its negative effects.
3. It’s a well written, professional book but it’s at times a dry read. Some folks will shy away from the statistical analysis. In defense of the author, I considered the charts helpful but it’s not for everyone and may have been better placed in an appendix.
4. The author seems restrained. It’s as if the author did not want to offend anyone. Some of it’s understandable but it comes at a price.
5. A missed opportunity to explore the damage caused by corporate lobbying to average citizens.

In summary, this is a solid, workman-like analytical look at corporate lobbying for the general public. The author succeeds at proving his case that lobbying begets lobbying. The book however is a bit dry and leaves some topics on the table that would have taken it to a higher level. I was expecting more and was little disappointed that the author didn’t pursue the damage done by corporate lobbying. Overall, a good book, I recommend it.

Further recommendations: “Lobbying America” by Benjamin C. Waterhouse, “Corruption in America” by Zephyr Teachout, “Winner-Take-All Politics” by Jacob S. Hacker, “The Price of Inequality” and “Globalization and its Discontents” by Joseph E. Stiglitz, “Affluence and Influence” by Martin Gilens, “Republic, Lost” by Lawrence Lessig, “The New Elite” by Dr. Jim Taylor, “Why Nations Fail” by Daron Acemoglu, “ECONned” by Yves Smith, “The Great Divergence” by Timothy Noah, and “Bailout” by Neil Barofsky.
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