The Myth Of Corporate Capture
There’s a myth making the rounds these days that goes something like this: Evil, big, multinational corporations are storm-trooping around not only Washington but state capitals, knocking down the doors of government agencies everywhere and holding bureaucrats hostage to their whims and ways.
Not that most bureaucrats don’t like it, mind you, but, at the end of the day, so the story goes, corporate special interests and their money call the shots. One even becomes the other as corporate goons and bureaucratic buffoons shuttle back and forth between their ivory towers.
This viewpoint is at the heart of the growing alignment of the MAGA and MAHA (Make America Healthy Again) movements, and it is particularly potent among the latter legion, led generally by Robert F. Kennedy, Jr. That is to say, as Kennedy often does, there is a “corrupt merger of corporate and state power” that is subverting democracy and oppressing people, and outsized corporate power is the decisive muscle behind it.
Full disclosure, Kennedy graciously wrote the cover copy for my own book, Dark State, two years ago, and that’s how he described our modern political dilemma there, too, as bureaucratic helpers serving corporate masters: “As powerful corporations obliterate our liberties, courts abet them by rewriting open records laws, government agencies adopt new devices to stonewall freedom of information requests, legislators and bureaucrats exempt themselves from public accountability,” Kennedy wrote.
Wisconsin’s own Sen. Ron Johnson characterizes it the same way, writing in a September 30 op-ed:
Fortunately, what happened during the pandemic opened the eyes of untold numbers of people around the world to the corruption and capture of government agencies, the media, medical journals, and the medical establishment by large corporate interests. Now that our eyes have been opened to that reality, it is impossible to ignore that the same dynamic has occurred throughout governments and industries worldwide.
—Ron Johnson
Now I wholeheartedly agree with them about the problematic and corrupt merger of state and corporate power. The problem with the analysis is, there’s not a single government agency that has been captured by large corporate interests. Not one.
In fact, the dynamic they are describing—again, it is evil and it does exist—works in the exactly opposite fashion. What’s going on around the western world, and especially in the United States, is that large corporations are being routinely captured by even more powerful bureaucratic interests.
The stormtroopers in the streets of American life are from the ranks of the professional civil service, and the doors they are smashing down are the doors of corporate boardrooms as well as private homes. The hostages are the corporate directors of America, quivering behind their investment portfolios for fear of angering their bureaucratic overlords.
To be sure, nothing in this equation is black and white. To make this assertion is not to say global corporations do not wield immense power. Sure they do. It is not to say that these large business interests do not attempt to influence government policy, and often succeed in doing so for entirely anti-capitalist and ideologically driven objectives. Sure they do. They line their pockets with taxpayer dollars, work against taxpayer and American interests, pursue monopoly practices to eliminate smaller potential competitors, and gleefully participate in the revolving door between their office cubicles and government office buildings.
All that is not to be denied. But it is to say that, at the end of the day, whatever the short term may look like, government holds the decisive power. Ultimately, these freeloading cartels of fake capitalism will do the government’s bidding, not the other way around, or they will do no bidding at all.
None of which is to say that we conservatives should not be allies with those who believe corporate power is decisive. Far from it. No matter your take—whether corporations own the keys to the kingdom or whether bureaucrats are the bullies in the pulpit—there is certainly an unholy alliance between large, globalist (and anti-capitalist) corporations and globalist government that needs to be defeated.
That’s the top objective, for it is the only way to preserve both capitalism and democracy. Still, who controls the levers of power is not a distinction without a difference. It matters big time, and so it’s time to set the record straight.
The Bureaucracy Rules, With Its Rules
Just on the surface it should be obvious that the bureaucracy rules, with its rules, and the government itself is the circuit breaker when it comes to decisive power.
After all, corporations can’t print money, but the government can, or they farm it out to the Federal Reserve. When is the last time you heard about the corporate printing press fueling inflation, or that runaway national debt was caused by corporations printing too much money? Never. But we do hear about government printing presses and governments printing too much money—precisely because governments control the quantity of money, not corporations.
Then there are all those massive tomes of regulation. Governments enact them; corporations do not. Corporations follow them. And when corporations (as well as people) decide not to follow those regulations, governments have fines and fees and courts to enforce them, not to mention armies and police forces to back up the edicts.
The government estimates that direct regulatory costs to corporations is about $300 billion a year (the cost to the overall economy is much higher), but nongovernmental analyses put the costs much higher. According to the National Association of Manufacturers, the annual cost burden for an average U.S. firm is $277,000.
It’s hard to believe corporate America would allow itself to be saddled with such onerous costs if it were running the show. And when a corporation wins a special-interest regulatory reprieve, or applauds a regulation it can afford and its competitors cannot, you can bet it’s a flyer in the government's orbit.
Then, too, governments can seize private property through eminent domain. They can dole out tax credits and subsidies, and they can take them away. They can smash a corporate monopoly—or even a corporation that is not a monopoly—to smithereens through the use and abuse of anti-trust laws. They can relieve a corporate interest of liability from lawsuits, if the corporate interest follows the prescribed government desires, or they can dismantle it by exposing it to no protections at all, even reasonable ones.
Lastly, corporations do not control the biggest source of all money: taxpayers; and they lack a spine of ideology that can feed the imaginations of the masses. Sure, big business can exert economic power over consumers just as government can exert political power over taxpayers, but economic power is inferior to political power.
Consumers can revolt against economic power by refusing to buy a product (consumers can and did stop buying Bud Light in the wake of the Dylan Mulvaney controversy), but they can’t just up and stop paying taxes. As David Henderson, a research fellow with the Hoover Institution, wrote in Mercatus Research in 2012, political power is the power to compel.
“Lowly bureaucrats in federal, state, and local governments have the power to coerce me,” Henderson wrote. “A city official in Pacific Grove, California, for example, can credibly threaten me with jail time if I cut down a tree on my own property without permission. But Home Depot and Costco, two large retail establishments where I might buy the saw to cut down my tree, cannot force me to do or prevent me from doing anything.”
Who Controls Whom?
Real-world analysis that digs beneath the surface suggests a common-sense answer to the question of who controls whom. The typical example of corporate capture is Big Pharma, which is seen as having captured public health agencies, so let’s take a look.
In this world view, big pharmaceutical companies—let’s face it, if any institution on the planet can truly be considered malevolent, it’s these institutions—have transformed the federal Food & Drug Administration (FDA) and the Centers for Disease Control (CDC) into de facto subsidiaries, and academic critics point to Big Pharma’s funding of those agencies as the proof in the bank account.
Sometimes, at least on the surface, it’s hard to argue with the evidence they present. Back in 2018, Drs. Leslie E. Sekerka of Menlo College and Lauren Benishek of Johns Hopkins University wrote “Thick as Thieves: Big Pharma Wields its Power with the Help of Government Regulation,” a piece that sought to demonstrate just how the pharmaceutical industry enforces policy discipline through agency budgets—the budgets of the very agencies that regulate them.
Even though the FDA is responsible for approving pharmaceutical products for marketing in the U.S., as well as having the statutory authority to regulate prescription drug labeling and advertising, Sekerka and Benishek wrote, the pharmaceutical industry contributes heavily to its annual budget. Since 1992, the authors reported then, pharmaceutical companies had contributed $7.67 billion to the federal agency’s coffers.
“This creates an interconnectedness between the two entities: a marriage between Big Pharma and the government can potentially blur the intent of government regulation and the role that it plays in protecting citizens,” they wrote.
To be sure, that looks like Big Pharma bought public health agencies lock, stock, and barrel through pure old-fashioned cronyism. But it says nothing about who is tasking whom. The result has unquestionably been the creation of an international and national public health syndicate, comprised on the one hand of a bureaucracy that pursues its mission politically, while simultaneously enriching and favoring the biggest of the big special interests, Big Pharma.
But is the funding a bribe by corporate America? or is it bureaucratic blackmail of the corporate sector? The evidence suggests the latter.
After all, if Big Pharma doesn’t cough up the dollars, what’s stopping the government from simply taxing them and punishing them through litigation and regulation? What’s stopping CDC and FDA lawyers from sitting on their hands in the U.S. Vaccine Courts, where they play a critical role in biasing the court against the victims of vaccine injuries?
And when pharmaceutical companies—who admittedly try to buy off regulators and often do—don’t play nice, the FDA goes after them, sometimes outrageously so. In one noted 2009 case, Pfizer agreed to a $2.3 billion settlement with the FDA, not for peddling some of its actually dangerous drugs, but from promoting the “off label” use of several drugs that doctors believed were beneficial for those conditions. In other words, the company promoted and doctors legally prescribed several drugs for use the FDA had not sanctioned. It didn’t mean they didn’t work—and many drugs are prescribed off label—just that the company failed to get government approval.
There was no public health issue, or even any fraud. As a Forbes piece proclaimed, the settlement really only protected “the FDA’s dubious powers” to coerce American corporations.
“Physicians and patients are happy with off-label usage of drugs, but the FDA sees it as a threat to its powers,” the Hoover Institution’s Henderson wrote in that piece. “After all, if you can market and promote a drug for a usage the FDA hasn’t formally approved, why worry about enduring the expensive and lengthy FDA approval process?”
The list of lawsuits and settlements goes on and on.
Patented Behavior
It doesn’t stop with mere litigation by an annoyed bureaucracy. The CDC itself is a powerful government entity that runs its tentacles of control into the pharmaceutical industry not merely through regulation and enforcement but through its own hoarding of drug patents. In fact, in one sense the CDC itself is a patent company that leverages control through its ownership or co-ownership of 206 patents in total and of 84 vaccine patents in particular.
A recent “fact check” by the neoconservative The Dispatch cast that ownership in a benign and passive light, as if the ownership is in name only —“when CDC researchers partner and collaborate with private companies and academic institutions for vaccine research and development, the CDC will often be listed on the patent as an assignee”—but it is not.
To cite just one example, in 2019 a study by Yale Global Health Justice Partnership showed that the CDC held patents owned by the U.S. government for drugs to prevent HIV infection, including Truvada, Gilead’s approved drug on the market, and the analysis concluded that the government’s rights were “legal and enforceable.” The group wanted the CDC to sue to win royalties, which (they hoped) would then be used to promote public access to the drug.
Sure enough, in 2023, the government sued Gilead for $1 billion for allegedly failing to compensate the CDC for the agency’s discovery that Truvada could help prevent the disease. The government lost in a jury trial, but guess what? The government appealed and that fight is ongoing. If this is an example of corporate capture, the term ‘capture’ needs to be redefined.
Then there was this report to Congress by the Government Accountability Office (GAO). According to the report, the Department of Health and Human Services (HHS) scooped up 4,446 U.S. patents between 1980 and 2019 through research in its own labs. During that same period, the GAO found, the National Institutes of Health (NIH) had 93 patents leading to FDA approval of 34 drugs that included vaccines and treatments for cancer. Mostly, the NIH granted licenses to the pharmaceutical companies to develop the drugs and bring them to market, netting the NIH some $2 billion in royalty revenue since 1991, when the first of the drugs was approved. Three licenses generated more than $100 million each for the agency.
In all these instances, the government is essentially enacting pay-to-play schemes in which the industry pays the government not so much to purchase special interest regulatory favors as to be let onto the playing field. When a firm such as Gilead steps onto the playing field without paying, the government sues. And, like the CDC, the NIH keeps a sharp eye out for patent infringements: From 2009 through 2019, HHS coordinated with DOJ on 24 cases involving its intellectual property, according to the GAO report.
Despite the assertions of groups such as GHLP, such lawsuits over patents are not in the public interest precisely because the CDC’s ownership and control of patents isn’t in the public interest. They are neither benign nor passive.
The problem with the government holding patents—they claim it’s to protect against the restrictive use or misuse of beneficial products—is that it inherently biases the CDC’s approach to any competing research. When the CDC holds patents in vaccines and in vaccine assays and vaccine adjuvants, or vaccines to prevent tapeworms (it does), it is endorsing those products’ approaches (such as the use of aluminum in vaccines) rather supporting independent research that might point to other recommendations. There are other reasons to oppose government-owned patents, including constitutional ones, but essentially, they can and do remove publicly funded research from the reach of the public to satisfy the “science” of unelected bureaucrats.
The more you dig the more you find that the government controls Big Pharma, not the other way around. The money flowing to the government from pharmaceutical corporations is indeed a lot, but more often than not it is the government extracting the money through litigation, fines and fees, patent licensing, sue-and-settle lawsuits, and favorable placement for research grants rather than just plain old cronyism, though that exists, too.
Yes, the pharmaceutical companies reap billions of dollars, but only if they play the government’s game.
There’s A Pandemic For That …
What’s in it for the government? What is the bureaucratic motive? Aside from a few bought-off bureaucrats enriching themselves, what do the majority of civil servants who don’t get rich really crave?
The answer is control. Power and control. While the industry seeks economic power, the bureaucracy seeks political power. It might seem odd to control 84 vaccine patents when no profit motive exists except to line the coffers of government. It might seem to go against the grain of public health to freak out about the legitimate use of off-label drugs only to rush to market vaccines without following safety protocols and to manufacture inflated risks of not taking the jab while downplaying and even hiding injuries and deaths.
Why sue a company for drugs that doctors truly believe help people for certain conditions, then enrich that same company by sanctioning and promoting Covid vaccines and flu shots that don’t work?
The answer is control. Power and control. We know why Big Pharma wants us to be vaccinated heavily from birth—money—but there’s a reason Big Bureaucracy wants us vaccinated from birth, too: It trains citizens to do what the bureaucracy wants them to do “for their own good” and not to question government edicts. It is conformance training, and in the U.S. it literally starts on the first day of life with the mostly (except in high-risk cases) unnecessary hepatitis B vaccination, which is not required in countries such as Denmark, Finland, Iceland, Norway, Sweden, and the United Kingdom.
In childhood, some vaccines are needed and others are not, but all contain a heavy dose of conformity and compliance.
Long Covid, Or Long Game?
A deep dive into federal history shows that public health agencies have been seeking brute political power for decades. After floating in the backwaters of the Washington bureaucracy for most of the 20th century, a new generation of leftist activists ascended to the top of the public health pyramid half a century ago with a dream to control the nation through public health mandates.
One of those activists was Paul Cornely, who, in 1970, became the group’s first African American president. In a 1970 speech, as described in “The Exodus of Public Health,” by Dr. Amy Fairchild, Cornely laid out the future that would come to pass with a 'blistering attack' on what he saw as the complacency of his profession. It had been ‘a mere bystander’ to the profound changes in the health care system that had taken place in the 1960s; its members wasted their time on ‘piddling resolutions and their wordings.’ Public health, he charged, remained ‘outside the power structure.’ Cornely’s address was a clarion call for more aggressive action against a host of health problems integral to modern industrial society.”
Cornely intended to bring public health inside the power structure, and, by the late 1990s and early 2000s, the agencies had fashioned a template for their march to power. The Model State Emergency Health Powers Act, proposed by the CDC, would, if a state adopted it, provide a governor with sole discretion to declare a public-health emergency. Once the emergency was declared, public-health officials would assume police powers, a militia would be mobilized, and the legislature would be prohibited from intervening for 60 days. Any new orders and rules issued by the governor would have the full force of law. Existing laws and individual rights could be suspended.
Many states adopted at least part of the plan, and, if all that sounds familiar, it was the blueprint for oppressive state actions declared in state after state, including Wisconsin, in the Covid pandemic.
Relevant to the point here, the quest for power by public health agencies—from the local to the national to the international level—has been a long, persistent, and planned quest, and the emergence of massive pharmaceutical companies to help government achieve its totalitarian aims has occurred within that framework.
What we have witnessed during the past 50 years isn’t the corporate capture of public health agencies by Big Pharma; it was the creation and bureaucratic capture of Big Pharma by the government.
Neither Big Public Health nor Big Pharma is doing anything good for our liberty, nor, for that matter, for our public health. There is every reason for MAGA to unite with MAHA to fight what Kennedy calls “the corrupt merger of state and corporate power” and what Sen. Johnson frames as an egregious dynamic between government agencies and large corporate interests.
But we must remember who is the dog and who is the tail. To mix a metaphor, but appropriately so, the only true way out of such a merger or dynamic is to cut off the head of the snake.
That would be the public health bureaucracy, which is working hard every day to bring about totalitarian control of society through magically divined public health emergencies, from gun violence to climate change to monkey pox and ever more pandemics.
It’s time for the people to “capture” our government again.
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