The relationship between government and corporations is very tightly linked. In the early years of American history, government kept a heavy hand on corporations. By the Civil War, however, corporations had begun to become more powerful. The railroad barons were the first who took advantage of corporate power and political relationships. The turning point came with the Supreme Court ruling stating that corporations could act as an individual.

Money Talks

With the Supreme Court ruling of Santa Clara County v Southern Pacific Railroad in 1886, the railroads (and hence private corporations) could be considered as citizens, giving them all the rights available under the Bill of Rights. However, corporations have more money than most private citizens. Now being able to act in the same way as citizens, the railroads began to spread around their wealth. They donated to particular political campaigns. The railroad barons were able to determine which politicians would promote the interests of the railroads and which would not. There was concern that the railroads were buying politicians, particularly Senators who, until 1920, were appointed to office, rather than elected.

Government Defers to Corporations

Since the railroads showed how corporations could influence politics, large corporations have been using their power to push government toward certain decisions.

Most corporations hire lobbyists who promote their interests in Washington or state capitals around the country. The lobbyists look at various bills that are making their way through the governmental system and determine how it will affect the corporation. The bottom line is always money. Corporations do not want to see government push through legislation that might hinder the opportunity for an increase in profits.

As personal citizens, management within a corporation is likely concerned with environmental issues or the opportunity for family members to take time off to be with a sick loved one. As a corporation, however, these issues can cost the company from increasing revenue – or worse, work at a loss. Therefore, it is vital for the corporation to push through their agenda rather than promote an agenda for the good of the country. This is possible because the corporation is able to donate large amounts to political candidates, something that private citizens are unable to do.