Pluralism in America 1

Alexander T. DawejkoProfessor Rebecca C. Harris, Ph.D.Politics 100: American GovernmentNovember 17th, 2014Word Count: 1,914

Interest Groups Are Destroying the Country

"Democracy is the one national interest that helps to secure all the others."

- U.S. Department of State, "Diplomacy in Action"

This blog will first outline a thought process comprised of ten ideas, starting with

the goal of democracy and leading to the idea that the United States has failed. This

thought process is simple but takes ideas as facts which some may find controversial. The

protagonist in this blog is the American citizenship and the antagonist is a villain named

"Big Business". For the reader, some suspension of belief may need to be used at first.

The blog will then go on to highlight why theoretical pluralism is a positive force for

democracy but in practice (in a capitalist country) pluralism cannibalizes itself and

destroys the economy and any remnants of democracy. It will then provide opposing

views from some experts and show why they are incorrect in their thought.

Thought Process:1. Democracy represents the will of the citizenship.

2. The U.S. is striving for democracy.

3. The U.S. fails if it doesn't achieve democracy.

4. Democracy fails if one group takes control.

5. Interest groups are the driving force behind our government, not the citizens.

6. There is only one significant interest group, "Big Business".

7. Democracy has failed... One group has taken control of our government.

8. Big Business' goal is to maximize profit, not to promote social welfare.

9. Government/Big Business doesn't represent the citizenship but hurts them.

10. The U.S. has failed.

Pluralism in America 3

The goal of the United States government is to represent the will of the people by

using a democratic republican system. When the country was being formed many

political philosophers argued that it wouldn't work due to the sheer size of the nation.

Republics only seemed to work in small scale assemblies such as the Athenian Assembly,

where every man could argue face to face. How were rice farmers in South Carolina

going to be able to compromise on laws with cod fishermen from New England? The

answer proposed by James Madison in The Federalist #10, was that pluralism, the

coexistence of two or more groups of authority, would make the U.S. work. So the exact

reason that the political philosophers said that a republic of this scale could not work, was

the reason it would work. Madison argues that because the United States has such a

diverse ideological background, it would never be threatened by one group gaining

control of the government. This pluralism, equal input from a wide variety of interest

groups, is a force to promote democracy. This idea is shared and expressed by David

Truman in his, "The Governmental Process" (1952) in which he explains how interest

groups run the government. David Truman and James Madison are both correct and

incorrect. This pure form of pluralism would promote democracy, but the "pluralism"

practiced in America isn't pluralism at all.

The pluralism in America is, according to William E. Hudson in his, "American

Democracy in Peril: Eight Challenges to America's Future", specific to business

(Hudson, 2013, 227). Hudson believes that in a capitalist society, the most privileged

interest groups are Big Business interest groups. These groups have the capital and they

make the nation's major economic decisions (Hudson, 2013, 227). If business is deciding

everything, what is the motive? The goal of a logical firm is to maximize profit (private

firm) or to maximize shareholder's equity (public company). So if the businesses are...

"actively manipulating the political system through lobbying, elections, and media

propagandizing to attain their political objectives," they are molding the policy to fit their

business models so that they can increase profits (Hudson, 2013, 227).

The United States has the façade of having pluralism because it has such a wide

variety of firms. There are insurance lobbyists, upstream oil industry lobbyists, media

lobbyists, and thousands of different kinds. They seem like they are representing different

views and ideas which would promote democracy, but in fact they are all in one interest

group, BIG BUSINESS. Every one of these interest groups has one goal: to change

policy to maximize profit. I argue that this seemingly democratic system is worse than

having a feudal or theocratic state. At least if there is a tyrant, the citizens understand

who it is. In America the citizens think that they are being represented and that their will

is going into policy making, when in fact Big Business, the all powerful sovereign, is

ruling the government.

The claim that Big Business is controlling the government seems far fetched. But

if the healthcare industry is examined, a clear influence can be observed. According to

Hudson, "Business can deploy its political resources and exploit its position in the

economic structure to ensure itself an unequal position in the group universe," (Hudson,

2013, 242). Which means that in a competitive capitalist society, competing firms can use

their policy influencing resources to push out competitors. In a natural capitalism, firms

compete by lowering prices to sell to the consumers; this experience is observed in the

Cournot model. If a firm can use policy to push out, or not allow new entry to a market,

Pluralism in America 5

then the firm can experience a monopoly. This is exactly what is happening in the

healthcare industry.

In a New York Times article by Elizabeth Rosenthal titled, "In Need of a New Hip

but Priced Out of the U.S.", Rosenthal explains how bio-tech manufacturers have created

a cartel in the U.S.1 Rosenthal writes, " So why are implant list prices so high, and rising

by more than 5 percent a year? In the United States, nearly all hip and knee implants —

sterilized pieces of tooled metal, plastic or ceramics — are made by five companies,

which some economists describe as a cartel,"2 In this article a man is in need of a hip

replacement, he is quoted at $78,000 plus the surgeon's fee. Because he couldn't afford

this exorbitant price, he searched for a second quote. In the end, the man flew to Belgium

and got the hip replacement for just under $14,000. Rosenthal writes, "he ultimately

chose to have his hip replaced in 2007 at a private hospital outside Brussels for $13,660.

That price included not only a hip joint, made by Warsaw-based Zimmer Holdings, but

also all doctors’ fees, operating room charges, crutches, medicine, a hospital room for

five days, a week in rehab and a round-trip ticket from America."3 Rosenthal answers the

question of why the prices are so high in America, by blaming the government "trade

policy, patents and an expensive Food and Drug Administration approval process that

deters start-ups from entering the market,"4 There is no Cournot Model of competitive 1 "In Need of a New Hip but Priced Out of the U.S." New York Times 8-3-2013http://www.nytimes.com/2013/08/04/health/for-medical-tourists-simple-math.html

2 "In Need of a New Hip but Priced Out of the U.S." New York Times 8-3-2013http://www.nytimes.com/2013/08/04/health/for-medical-tourists-simple-math.html

3 "In Need of a New Hip but Priced Out of the U.S." New York Times 8-3-2013http://www.nytimes.com/2013/08/04/health/for-medical-tourists-simple-math.html

4 "In Need of a New Hip but Priced Out of the U.S." New York Times 8-3-2013http://www.nytimes.com/2013/08/04/health/for-medical-tourists-simple-math.html

pricing because new entrants into the market are deterred by policy. It is odd that the

government is not only enabling a cartel from forming, but promoting and sustaining its

existence. The Sherman Anti-Trust Act of 1890 was made with the purpose of, according

to the Supreme Court in Spectrum Sports, Inc. v. Mquillan (1993) "... the [Sherman] Act

is not to protect businesses from the working of the market; it is to protect the public

from the failure of the market. The law directs itself not against conduct which is

competitive, even severely so, but against conduct which unfairly tends to destroy

competition itself,"5 The government is supposed to be promoting a competitive market

so that the consumer surplus is protected by limiting producer surplus. The same policies

that the government is using to block out new entrants, go directly against other policies

that the government made in the past.

This article by Rosenthal illustrates my point that Big Business is driving policies

that while profitable to firms, are hurting the citizenship. Obamacare is such a big deal in

the U.S., taking up valuable time with debate after debate. Maybe healthcare would be

more affordable if cartels weren't allowed to form and charge health insurance firms

whatever price they want. This example of Big Business maximizing profit supports

Hudson's fourth threat of business on democracy, "business privilege results in

substantive policies that are contrary to the needs and interests of a majority of

Americans..." (Hudson, 2013, 242). Insurance premiums would be much lower if the

healthcare cartels were not allowed to operate, ridding the country of the need of

nationalized healthcare.

5 "Sherman Anti-Trust Act" Wikipedia http://en.wikipedia.org/wiki/Sherman_Antitrust_Act

Pluralism in America 7

In the news recently The New York Times released an article by Albert R. Hunt

titled "In Congress, Obama's Healthcare Act is Still a Target," that discusses the appeal

by congressional republicans for the Affordable Care Act.6 The republicans are

attempting to create a tax for device manufacturers in the healthcare industry, which

would go directly into paying for Obamacare. This tax is exactly the kind of policy that

would solve the problems listed in my previous paragraph. But to no surprise, Hunt

writes, "device makers have waged an effective lobbying campaign against the tax," So

some policy makers identified the issue: medical device pricing driving up insurance

premiums. But these policy makers were shut down by Big Business, the profit hungry,

social welfare destroyer.

Samuel Huntington, a Harvard political-scientist, wrote a famous essay published

in the "Trilateral Commission in 1975" (Hudson, 2013, 162). In this he argues that

pluralism is bad for the country because it, threatens how a democracy can be governed

(Hudson, 2013, 162). I agree with this idea, but differ on his opinion about why pluralism

has negative externalities on the political system. Huntington thinks that too many

interests begin to conflict and create a stagnant government. I believe many conflicting

interests promote democracy, but I think it is impossible to have a pluralism in a capitalist

society. The interests of groups with more capital outweigh the interests of the groups

with less; this is the essence of capitalism. Nicholas Rescher's, Pluralism: Against the

Demand for Consensus, attempts to find a place for pluralism in western capitalist

societies. He thinks the "Utopian" approach, coming up with a solution where every

interest is represented, is naive. Instead, Rescher, "advocates incremental improvements

6 "In Congress, Obama's Healthcare Act is Still a Target" New York Times 11-16-2014http://www.nytimes.com/2014/11/17/us/politics/in-congress-obamas-health-care-act-is-still-a-target.html?_r=0

within the framework of arrangements that none of us will deem perfect but that all of us

"can live with."7 I deem his proposal naive, for in a capitalist society the little changes in

policy will either be struck down, or immediately changed if they go against the interest

of Big Business.

I believe the United States Government should represent the will of the diverse

citizenship. The theoretical pluralism of James Madison would promote democracy, but

in the U.S. we don't experience this pluralism. Instead, we experience Big Business, the

sole interest group. Big Business is the child of capitalism and the free market. It strives

for profit maximization and according to Hudson, is all powerful in our government.

Thus, the government fails at representing the citizenship and also fails at protecting it.

The government has become a tool for Big Business to destroy competition and in doing

so, ruin the economy. Democracy has failed because one group is in control. Pluralism

has failed because only one interest, profit maximization for firms, is represented. The

United States has failed.

Sources:

William E. Hudson, American Democracy in Peril: Eight Challenges to America's Future (Sage Press, 2013)

Albert R. Hunt, "In Congress, Obama's Healthcare Act is Still a Target", New York Times 11-16-2014

7 http://philpapers.org/rec/RESPAT-3

Pluralism in America 9

http://www.nytimes.com/2014/11/17/us/politics/in-congress-obamas-health-care-act-is-still-a-target.html?_r=0

http://en.wikipedia.org/wiki/Cournot_competition

http://en.wikipedia.org/wiki/Pluralism_(political_philosophy)

http://en.wikipedia.org/wiki/Sherman_Antitrust_Act

http://www.state.gov/j/drl/democ/

Nicholas Rescher, "Pluralism: Against the Demand for Consensus" (Oxford University Press, 1993), abstract.

Elizabeth Rosenthal, "In Need of a New Hip but Priced Out of the U.S." New York Times 8-3-2013http://www.nytimes.com/2013/08/04/health/for-medical-tourists-simple-math.html

James Madison, "The Federalist #10" (1787-1789)

Notes:

Pluralism in America 11