Do ‘Large’ Corporations Have Disproportionate Political Clout

I liked Jim Harper’s Tea Party / OWS venn diagram:

That said, I actually think it may be an analytic mistake to believe that the political system is disproportionately influenced by large businesses. To be more precise, while clearly a big business is going to have more influence than a small business, my view is that if you look at it systematically, the political system is somewhat biased in favor of small firms as a class. That’s because the U.S. political system is pretty geographically dispersed. So the sectors that have the most power are sectors that are large, but fragmented. Agriculture has a lot of political clout in part because rural states are overrepresented, but also in part because there are farms all over the place. New York and California aren’t “farm states” by any means, but they contain plenty of farms and farmers. During the auto bailout debate, the folks with the most clout turned out not to be the GM and Chrysler managers or shareholders or bondholders or workers but the car dealership owners. That’s because there’s one in every congressional district and members of Congress are hyper-responsive to local elites.

Small businesses also benefit from positive affect. Politicians brag about doing favors for “small business.” Nobody ever says something like “I came to Washington to streamline regulations and make it easier for large companies to put their smaller competitors out of business.”