Deep Capture – Part IV
Posted by Jon Hanson on December 4, 2007
This is the fourth of a multi-part series on what Situationist Contributor David Yosifon and I call “deep capture.” This post, like Part I, Part II, and Part III, is drawn from our 2003 article, “The Situation” (downloadable here).
The most basic prediction of the “deep capture” hypothesis is that there will be a competition over the situation (including the way we think) to influence the behavior of individuals and institutions and that those individuals, groups, entities, or institutions that are most powerful will win that competition.
Part I of this series explained that our “deep capture” story is analogous to the (shallow) capture story told by economists (such as Nobel laureate George Stigler) and public choice theorists for decades regarding the competition over prototypical regulatory institutions. Part II looked to history (specifically, Galileo’s recantation) for another analogy to the process that we claim is widespread today — the deep capture of how we understand ourselves. Part III picked up on both of those themes and explains that Stigler’s “capture” story has implications far broader and deeper than he or others realized. This Part examines the relative power (measured as the ability to influence situation) of large commercial interests today, much like the power of the Catholic Church in Galileo’s day.
(Situationist artist Marc Scheff is providing the remarkable images at the top of each post in this series.)
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Learning from History
For some of the same reasons that it is difficult to convince people that they would have been influenced by the situational cues in the Milgram experiment, it is nearly impossible to convince people that they live in, and are part of, a deeply captured world. To make our preliminary case, therefore, we will attempt to demonstrate that the situation today is very similar to the situation that existed in Galileo’s Italy. Because the existence of deep capture is easy to see and accept there, by observing it, we may be better able to see and accept deep capture now. Perhaps by seeing that we are subject to a parallel influence over a parallel issue, we may be able to more clearly see ourselves, not in the heroic Galileo, but in the complacent and complicit adherents of the common sense of his day, or even in the reactionary Bellarmine.
a. Institutions to deeply capture
The first parallel is the existence of an institution or collection of institutions with immense wealth and power and, thus, both the ability and desire to influence exterior and interior situations to enhance those advantages. In the Galileo story, that collection of institutions is, for the sake of simplicity, often treated as an individual actor under the heading of “the Catholic Church” or “the Vatican.” Today, we hypothesize that the institutions with the means and the motive to engage in deep capture are large corporations. In virtually any present metric and manner of understanding power, corporations easily qualify as immensely powerful.
Let us start with corporations’ immense wealth, a fundamental component of power in our market economy. As is so often emphasized by legal economists, resources have a tendency through market processes to move to those who value them most, as measured by relative willingness to pay. Willingness to pay, of course, is heavily determined by ability to pay. No institutional actor controls as much wealth in so concentrated a fashion in our society today as do corporations and those individuals with an important stake in promoting the power of corporations. Thus, valuable resources (including influence over the situation) tend toward those with the greatest ability to pay–that is, corporations.
Large corporate interests have several other power advantages beyond their wealth–advantages that likely help them to amass that wealth in the first place. For instance, like Stigler’s beekeepers [described here], they enjoy a common single interest and thus an advantage in the competition to influence–an assertion that finds considerable support in the shallow capture literature. Insofar as each corporation is devoted to the single goal of profit maximization, they are, even as they compete in the marketplace, collectively committed to a uniform regulatory end: the creation and maintenance of a world that maximizes profit opportunities.
Moreover, corporations are–in part because of market processes–profoundly effective at uncovering and exploiting the most efficient and reliable means of influencing people and institutions, a pursuit that will extend through situational influences. Advertising, marketing, lobbying, and public relations are only the most obvious activities that corporations have refined in their profit-maximizing pursuits. Even those practices are largely obscured by our dispositionism and largely invisible in our theories–an obscurity that renders them all the more effective. In future work, we hope to describe those practices in more detail. For now, our point is that the situation of market competition has led corporations to become far more expert at manipulating situational factors than other institutions or individuals have had the need or wherewithal to accomplish.
Finally, the livelihood or economic well-being of the majority of our population is perceived to depend directly or indirectly on the health of corporations–individually and collectively. For example, many people work for corporations, many people invest in corporations, and, more generally, the overall health of the economy, in which most of us feel we have a significant stake, is perceived to depend on the collective health of corporations. Corporate scholars Henry Hansmann and Reinier Kraakman, for instance, recently described the expanding base of shareholders as follows:
Stock ownership is becoming more pervasive everywhere. No longer is it confined to a small group of wealthy citizens. In the United States, this diffusion of share ownership has been underway since the beginning of the twentieth century. In recent years, however, it has accelerated substantially. Since the Second World War, an ever-increasing number of American workers have had their savings invested in corporate equities through pension funds. Over the same period, the mutual fund industry has also expanded rapidly, becoming the repository of an ever-increasing share of nonpension savings for the population at large.
This is not just an academic point. President George W. Bush has been emphasizing this theme repeatedly in the wake of corporate debacles since he took office. In response to Enron revelations, for instance, he explained:
The reason that a single bankruptcy can cause so much concern in America is that more Americans than ever have invested their money in public corporations. Today, about 80 million Americans own stock, either individually or through their pension plans. This is one of the causes for the expansion in personal wealth over the past 20 years. This has been an incredibly positive development for America. Stock ownership allows citizens from all walks of life to own a part of the economy and to share in its growth. The people who run public companies owe a special obligation to these investors, many of whom have put their savings and future security on the line.
The widespread sense that our collective welfare turns importantly on the wealth and success of corporations empowers corporations. It does so by giving the general population a stake in the health of those institutions that are already the most wealthy and influential in our culture. As Hansmann and Kraakman put it:
No longer do labor and capital constitute clearly distinct interest groups in society. Workers, through share ownership, increasingly share the economic interests of other equity-holders. Indeed, in the United States, union pension funds are today quite active in pressing the view that companies must be managed in the best interests of their shareholders.
In this way, according to Hansmann and Kraakman, “a public shareholder class” has developed into “a broad and powerful interest group in both corporate and political affairs across jurisdictions” promoting corporate interests.
b. Fundamental attribution errors
The second major parallel between our world and Galileo’s is the existence of a widely held attributional intuition that is false, but generally viewed as a “truth”–and an obvious one at that. At that time, it was about what, if anything, moved the Earth and the celestial bodies “above” it. Now, it is about what moves us and our institutions.
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Part V of this series examines the third parallel between Galileo’s world and ours is that, in both, those in power have a stake in maintaining the apparent veracity of that “truth” and, thus, in heavily promoting it.