We’ve Been Played By The Political Industrial Complex

We’ve Been Played By The Political Industrial Complex

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David Dodson

Military Industrial Complex

In a prescient farewell address 60 years ago, U.S. president Dwight D. Eisenhower predicted the rise of America’s military industrial complex. Yet as visionary as he was, Eisenhower missed the rise of another complex – one that is arguably more powerful and destructive.

In his January 1961 comments, Eisenhower told Americans we needed to create “a permanent armaments industry of vast proportions.” But he also noted that such an alliance of business and government had “grave consequences,” because the buyers and suppliers had incentives that went beyond national security.

The outgoing leader’s other predictions about shifts in scientific research, the growth of the federal government, and global balance of power all came to be. But he failed to see how these trends would later spawn a dysfunctional new force: the political industrial complex

In the 2020 election cycle, candidates spent almost $14 billion. Another $3.5 billion was spent in 2018 and 2019, by more than 12,000 lobbyists, mostly funded by individuals with significant economic resources (such as those I teach at the Stanford Graduate School of Business).

More Dysfunction, More Spending

Politics and business are now inextricably linked in a political industrial complex. Which is why, when we shout to “get money out of politics,” we miss the larger structural issue. Today’s political system is an industry. Just like today’s defense industry has an incentive to increase our military budgets, so too the political industry has an incentive to increase political spending. And the more the divisions and dysfunction, the more the need for spending.

While I would never want to believe Lockheed Martin or Raytheon hoped for warfare in order to increase revenue, the same is not true for the merchants of political warfare. Twitter and The New York Times do best when we are at each other’s throats. Lobbyists drink nicer wine when legislation is being argued over than when it is settled. There is no mistaking that the farther apart we are as a nation, the better the political industrial complex does economically.

Despite a rise in small-dollar donations to political campaigns, over 80% of the $14 billion spent in the 2020 elections came from larger donors. Wealthy individuals and businesses fuel the political industrial complex, believing that while the system is poisoned, participation is important to advance one’s economic interests. Yet in the Harvard Business School report “A Recovery Squandered”, Michael Porter and the other authors document how those of us holding the economic power have not gotten the returns we expected from our participation in the politics industry. American competitiveness has declined, in large measure, because the very system business funds has failed its benefactors.

Yes, we’ve been the suckers, easy marks, year after year.

Starving The Enemy

Those with economic power have been the unwitting oxygen that has allowed the political industrial complex to thrive. And there is no greater reward to the system than uninterrupted warfare which perpetuates the see-saw nature of which major party stands behind the podium.

And yet, the system cannot survive without the support of those with economic power.

If we recognize our unique ability to force change upon the system, we can stop the flow of funds which is essential to the political industrial complex. There are signs this is happening. Following the U.S. Capitol insurrection, dozens of companies ranging from Goldman Sachs to General Motors put a hold on their PAC spending and donations.

Eisenhower said in his farewell speech, “We, you and I, and our government — must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.”

If General Eisenhower were alive today, I suspect he’d start by blowing up the supply lines and starving the enemy to surrender.

About the Author

David Dodson is a former candidate for U.S. Senate, faculty member of the Stanford School of Business, regular guest with Fox Business and CNBC, and 30 year entrepreneur and CEO. Our political system is in shatters, and as long as we keep pretending that the solution is electing more of our own team and less of theirs, we’re playing right into the dysfunction. Complaining is not progress. Leveraging my experience in the private sector and my political experience, I work alongside the leading thinkers of political innovation, to introduce practical and impactful policy solutions to repair our democracy.

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