In America we have a form of government in which power resides in a cadre of elected (and unelected) individuals who represent the interests of the citizens. Because of this structure, it is natural and necessary for people and groups to attempt to influence decisions made by government officials. After all, if we don’t tell our representatives what our interest are, how will they be able to represent our views?
This process, known as “lobbying”, is an organic function of our political way of life. But our representatives are human, and thus share the limitations common to all of us. Our representatives don’t have the time and attention to meet with and listen to each of us individually, so we form groups that lobby on our behalf. In this way we can pool our resources and leverage our individual power and influence at a relatively low cost to us.
The problem with this system is that it allows relatively small groups with adequate resources to lobby on behalf of their very narrow interest in a way that can be detrimental to the broader community. Large corporations, for example, once lobbied to reduce the regulatory burden on their industries. But many corporation realized they could gain a competitive advantage by lobbying for specific regulations that benefit their firm and hamstring their competitors.
That is why many corporations spend the GDP of a small nation on lobbying efforts. Since 2009, General Electric spent around $134 million on lobbying activities while AT&T spent $91.2 million and Boeing spent $90.3 million. Would for-profit corporations spend so much on influencing the goverment if it didn’t help their bottom line?
Surprisingly, this state of affairs is a relatively new phenomenon. Lee Drutman has a superb, in-depth examination of why business came to love lobbying and regulation and how it affects us all: