Remember the job creators? In the fevered dream the Republican strategists in the last Presidential election, they were the prime justification for Mitt Romney's candidacy and his policy stances that favored things like lower corporate taxes, relaxed environmental regulation, relaxed banking supervision, and a generally business-friendly environment. The conceit was that allowing business owners more latitude in pursuing profit would result in an increase in general prosperity, leading to the creation of more and better jobs.
Well, the Republicans aren't talking about job creators any more (the idea turned out not to poll so well), but we still have Carly Fiorina running for President on her business record (that's a joke in itself), and corporate interests ("Corporations are people, my friend") have committed big money to trying to influence the political process.
It's no surprise that owners of capital try to influence the political process to their own ends. But is there any merit to the "job creator" claim, or the notion that business leaders know what's best for the country? Follow me below for an answer from a surprising source.
What follows is the third part of a long comment about the relationship among owners of land, providers of labor, and owners of capital. The author argues that both owners of land and workers benefit from an increase in general prosperity - land becomes more valuable, and the workers' standard of living rises. Accordingly, the interests of both landowners and workers are aligned with the interests of society at large. No so for owners of capital:
[The worker's] employers constitute the third order [of people - the first was the landowner, and the second the worker], that of those who live by profit. It is the stock [that is, capital] that is employed for the sake of profit, which puts into motion the greater part of the useful labour of every society. The plans and projects of the employers of stock regulate and direct all the most important operations of labour, and profit is the end proposed by all those plans and projects. But the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin. The interest of this third order, therefore, has not the same connection with the general interest of the society as that of the other two. Merchants and master manufacturers are, in this order, the two classes of people who commonly employ the largest capitals, and who by their wealth draw to themselves the greatest share of the public consideration. As during their whole lives they are engaged in plans and projects, they have frequently more acuteness of understanding than the greater part of country gentlemen [landowners]. As their thoughts, however, are commonly exercised rather about the interest of their own particular branch of business, than about that of the society, their judgment, even when given with the greatest candour (which it has not been upon every occasion) is much more to be depended upon with regard to the former of those two objects, than with regard to the latter.
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The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it. [Emphasis added]
The date of this remarkable observation was 1776. It appears at the end of Book I of Adam Smith's
Wealth of Nations.
In one sense, Smith's observation is reassuring, because it shows that the tension between capitalists and the rest of society is nothing new. But it's also every bit as relevant today as it was in 1776. If we suspect that the purpose of big corporate money in the political process is to "deceive and oppress the public," well, we have good reason.