Corporate Money for the Democratic Party

ILLUSTRATED: There is cash for Democrats in the knowledge industries

A long held notion in American politics is that “Big Business” supports a certain set of pro-capitalist ideas. Colloquially known as “economic conservatism,” this agenda is manifested in policies which are long ingrained in the Republican Party platform. The Supreme Court’s ruling in the case Citizens United v. FEC is expected to unleash a torrent of corporate money to influence elections.

But a look at the future of American business suggests that the Democratic Party and the political Left can do well financially in this new paradigm. Essentially, Republican economic policy posits that a “pro-business environment” means low taxes and low legal and regulatory accountability. Essentially by decreasing the expenses of doing business that are associated with government, and businesses will thrive. The Republicans and their integrated media-finance-grassroots complex are very good at propagating that message.

For Democrats, their conception of a “pro-business environment” is less artfully communicated, but it is essentially a “high education, high infrastructure” environment. Scholars like Richard Florida and writers like Thomas Friedman have cited much data suggesting that America’s metropolises with the largest concentrations of educated people are producing a vastly disproportionate amount to economic output. Anyone eavesdropping a conversation in a wine bar in San Francisco or Washington, DC is likely to overhear conversations reminiscing about times living in Boston and Seattle, or impending moves to grad schools in New York or Chicago. Essentially, about ten metropolitan areas are attracting a large share of people with contemporary job skills and business savvy.

It should be noted that most of these cities mentioned have very high local taxes. Additionally, as bastions of the Democratic Party at the local level, generally have a lot of local business regulations intended for the public interest. Trial lawyers tend to think of these places as “plaintiff friendly” regarding judge and jury pools. However, for the industries concentrated in these areas, having educated people is more important than avoiding a surtax for community colleges. Having public parks powerful wi-fi antennas spurs more economic growth than would a lax zoning law that allow for the development of parkland.

What types of industries are centered in these cities? Generally they are industries in which intellectual capital is the basis of their business models. In other words, patented knowledge is today what owning farmland or factory space used to be in centuries past. High tech, clean tech, biotech, media, and entertainment industries are some of the industries where America is at a competitive advantage. The culture, laws, and social systems in the United States facilitate innovation. These industries need advertising firms, investment firms, consulting firms, and law firms that understand their business to support them. Thus, these types of companies need a lot of educated people near them. Those who want to do business with them in person or virtually need good roads, rails, and broadband lines. These industries do not need government out of the way, so much as they need government to help develop the human capital and platform to thrive in.

A public policy agenda that aims to effect an educated population, a livable ecological system, and a stable financial system will get support from much of the business community.

Higher education, including vocational and community colleges, will be crucial as these industries account for more and more of American commerce. For example, applicants for janitorial jobs at biotech firms need a special certification to dispose of the material. Candidates who support these educational institutions ought to be the recipients of campaign donations from these New Economy companies.

Environmental issues are not just the interest of clean tech companies. Several types of businesses realize that alternative energy will lower their costs of doing business in the long run. Industries in coastal areas will eventually catch on to the fact that rising sea levels will lead to population migrations inward, not to mention the lowering of property values on the coast.

Much of the small business community will welcome a comprehensive regulation of the financial system to ensure predictable interest rates and regular access to capital. Essentially, the financial system is so much in the public interest, it cannot be completely trusted to the whims of private actors.

There are well known consevative groups and think tanks like the ready to spring into action getting corporate America in the election process. I do predict in the coming years that new lobbying groups will form focused on higher education, a sustainable environment, and other progressive causes that help certain businesses. These groups can issue report cards on the voting records of legislators and new candidates, inducing a flow of corporate money to those campaigns.

To be sure, the conservative movement and the Republican Party will be the net victors of this change in campaign financing in the foreseeable future. However, at this writing in early 2010, two trends suggest that traditional big business interests will lose their control of the Republican Party. First, is the fact that the Great Recession is bringing a rapid end to the Industrial Age, and firms based on intellectual capital will gain in relative prominence. Secondly, the antiestablishment “tea party” populism in the GOP could force a fundamental compromise in the party’s agenda away from those who control capital to a more equitable economic policy. Corporations may not want to support candidates who end up winning Republican primaries railing against the excesses of the financial firms.

If the leaders of the Democratic Party and political Left can organize themselves and hone a message to the business community, they can remain a well funded force in American politics.