Good Company

Progressive-minded companies can mount an effective counter to the
U.S. Chamber of Commerce, but only if they get off the political sidelines.
A response to Ryan Grim.

By Alyssa Katz

Tagged CorporationsLobbying

I know, I know, it was preposterous of me to presume. But allow me to elaborate on a concluding takeaway from my book The Influence Machine: The U.S. Chamber of Commerce and the Corporate Capture of American Life. I posit in the book that the nefarious machinations of business giants seeking to lock in their supremacy—to say nothing of the corollary costs they inflict on the environment, consumers, and workers—can be countered by an upsurge in political activism driven by more forward-looking (if surely just as self-interested) corporate actors.

As Ryan Grim quoted from my book in his review: “The combatants may end up being companies like Skanska and Apple that left the U.S. Chamber, disillusioned; perhaps Google will finally heed the ceaseless calls to drop its Chamber membership and find fresh avenues for influence.” [“Open for Business,” Issue #39] Grim is skeptical and makes a fair point—Apple, to take my example, hardly shines as a paragon of workers’ rights. Why should it, or any company responsible to shareholders, find reason to align with labor, never mind actively advocate on workers’ behalf?

But, contra Grim, American companies, or some of them anyway, have already seized the opportunity to develop a competitive advantage by engaging in progressive political advocacy. They are not driven by altruism but self-interest; their activities are not a diversion from the bottom line but an enhancement of it. They see such engagement as an opportunity to extend their relationships with their clientele into the political sphere, with an eye on issues that both company and consumer alike can get behind. And in these moves, we can see the makings of a progressive counterattack on the U.S. Chamber of Commerce. 

Grim sharply distills my main point about the Chamber: While claiming to act as the voice of American business, its current incarnation chiefly serves as a front group for companies and industries peddling noxious products such as tobacco and coal. In the crosshairs of regulators and public outrage, these companies fight back with a purchased bloc of friends in Congress and muscle in the courts. Generous contributions buy these PR-challenged companies a zone of safety in Washington, enforced through targeted spending on elections, lobbying, and litigation.

Note that all this is conveniently going on as the nation musters little interest in the doings of Congress unless the words “government shutdown” are involved. And it’s more than lack of interest—it’s outright revulsion. Heading into 2016, just one out of eight Americans told pollsters that Congress is doing a decent job. Just 36 percent of registered voters turned out for the 2014 midterm elections. Into the void rush well-paid lobbyists and election strategists far more invested in the outcome—and in the Chamber’s case, coordinated to a degree to which only organized labor comes close. Unions, however, can muster only a fraction of corporate financial firepower in what will for them forever be a losing game.

Now consider the popularity of some of the most beloved consumer brands. Consider that more Americans bought tickets to see the new Star Wars movie than the 80 million who turned out to vote in the midterm elections. Consider that young Americans identify themselves as much by their media worlds as they do conventional citizenship.

As fewer and fewer Americans choose to affiliate with a political party, we also increasingly define identity through purchasing power and where we apply it: Whole Foods or Cabela’s; Hobby Lobby or Starbucks. Americans tend to live in worlds of private cultivation. These worlds have leaders who, as the Christian right has shown, can successfully organize their inhabitants to advance electoral causes that matter most to their constituents. Consumer brands, on issues of shared interest, have proven adept at motivating their loyal customers to act in the political sphere—a trend that shows the potential to evolve into out-and-out political activity on matters of broader civic interest.

Consider these examples. Awkwardly but with undeniable power, the ride-hailing app service Uber has enlisted its loyal armies of users to fight taxi industry-fueled efforts to rein in its business. Organic-food companies like Eden sponsor groups advocate the labeling of food products containing genetically modified organisms. Apple has propelled pro-consumer political advocacy to another level by encrypting iPhones over the FBI’s objections, making it impossible even for a terrorism investigator with a warrant to extract evidence—but honoring their customers’ preference to keep their digital lives private. While Apple’s lobbyists work the Hill, every iPhone purchased represents a consumer (and potential voter) at the ready to raise hell should Congress ever be tempted to mandate a back door to extract data.

The forward-looking faction of corporate America has so far steered clear of the electoral politics necessary to convert popular ideas into law.

Enlisting customers knows no partisan boundaries: Witness gun-maker Sturm, Ruger and Co.’s pledge to give $2 to the National Rifle Association’s lobbying arm for every weapon sold. By their nature, such campaigns target the Venn zone where company and consumer interests overlap, on narrowly defined issues where customers’ views predictably align with their product choice and the outcome has a positive impact on sales.

But increasingly, companies are seeing evidence that stepping up broader social advocacy yields net benefits to their brands. KPMG found that a majority of top companies now detail their “corporate social responsibility” efforts in arenas like human rights and the environment, both within the company and out in the world. The practice is more likely to be observed among—surprise, surprise—firms with Democratic CEOs and boards that are headquartered in blue states.

Though some scholarship has associated the practice with lower returns, those results may not tell the whole story. Washington State University marketing psychologist Jeff Joireman and colleagues recently found reliable dividends for brand loyalty when companies engage in social-responsibility spending, including on issue-specific advocacy where it aligns with customers’ expressed interests. Even better, they concluded, those efforts help the companies weather rough patches—think data breaches or recalls—because consumers’ positive perceptions and loyalties overpower individual bad experiences.

The obvious downside to corporate political activity is that customers come with a messy diversity of views. Publicly traded corporations have an obligation to shareholders to maximize returns and minimize risk—neither of which provides much incentive to go out on a political limb. But there’s an argument to be made that advancing political positions that are not universally held and are only ancillary to core business can bring unexpected dividends to an enterprise.

Witness the NBA’s recent partnership with Michael Bloomberg’s advocacy group Everytown for Gun Safety to launch an ad campaign against gun violence. Predictably, Second Amendment fanatics scowled that the NBA was sending gun-loving fans packing. If so, so be it. Pro basketball gains well-earned cred for standing up against a scourge that takes no small toll on its own fans. The earth might not have shaken beneath the feet of Second Amendment fanatics, but some of the hundreds of media pickups came from big-league sports news outlets usually silent on the firearms wars, a stream of airtime on CNN clocking more minutes than the ads themselves, and letters to red-state newspapers citing the campaign to urge that the NRA’s grip on state and federal lawmakers not go unchallenged—all this with no discernible hit to the league’s popularity or ratings.

The corruption of the U.S. Chamber of Commerce in service to the bottom lines of retrograde industries leaves ample ground for a coalition of reality-based and future-oriented corporations to pave the way for their own prosperity and the country’s. As the ties between companies and their consumers become tighter, and as more and more of those companies see the economic opportunity in unabashed advocacy, the possibility of a progressive counter-movement of corporations becomes less unimaginable. (Building a better nation: Now that’s a winning sales proposition, not too far from that of the Business Roundtable, a Washington corporate advocate better behaved than the Chamber.)

But the forward-looking faction of corporate America has, unlike its retrograde counterparts, so far steered far clear of the electoral politics necessary to convert popular ideas into the law of the land. Chalk up their reticence to the potentially explosive risks of hitching their brands to the wrong candidates.

The way out of that trap is to find power in numbers, and to rally behind the cause of securing a congressional majority both pro-business and pro-progress. As Grim notes, the Chamber of Commerce is not a true coalition, in the sense that its leading sponsors individually pursue selfish ends. But collectively, above all through the combined power of their congressional campaign spending, they secure a powerful bloc of political support that they never could have won individually.

The growing ranks of companies eager to show social dividends should follow suit. They should start with a Super PAC, its donors and dollars fully disclosed. Assuming no earthquake this coming Election Day, the 2018 midterm cycle offers a ripe opportunity to mirror the remarkable victories of the Chamber, the Koch network, and other powers on the corporate right in 2010, which secured a Republican majority in the House. Starting with a few winnable House districts, the Super PAC—call it “The Innovators’ Super PAC”—needs to sell its favored candidates as intensively and innovatively as any product, taking full advantage of its own members’ sophistication in targeting markets. Success in a few races, starting with a few companies’ seed capital, will embolden more to join from there.

These moves do the Chamber of Commerce playbook one better—and have the power to break the lock of toxic, last-century industries on national power.

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Alyssa Katz is a member of the New York Daily News editorial board.

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