Big government and big companies have always been separate—and the fathers of our country wanted it that way.
by DAVID FONTANA | April 13, 2019
Walk down a busy street in Washington during the week and you could run into a number of powerful people—but only certain types of powerful people. The powerful in Washington have earned that status mostly by what they have done for, with or against the federal government. And as much as Washington is defined by having big government in town, it has also been defined by not having big business in town. If you want to run into the titans of finance, go to New York City. If you want to run into the masters of technology, go to Silicon Valley. If you want to run into the giants of the entertainment industry, head to Los Angeles.
This geographic separation of Big Business from Big Government is not a bug—it’s a feature of American democracy at its best. The founders knew that democratic government demands a connection between the powerful and the people to survive and thrive—and that different kinds of powerful people need to be separated from each other to keep that connection strong. They designed the United States with this principle in mind—and for much of American history, it has stuck: We have kept our biggest corporations out of our our capital.
But this could be starting to change, and the reason is Amazon. The online retail giant has announced its decision to place a second headquarters, and therefore tens of thousands of high-level business jobs, in the Washington metropolitan area.The move will flood the capital, already crammed with the politically powerful, with economic elites, deepening the bond between the two groups and making it even harder for those outside the bubble of the rich and powerful to be in or influence the federal government.
Many of the founders would have hated the idea of a megacorporation in such close proximity to Congress and the White House—and they would have been worried about what it means for the country. History had taught the founding generation that democracy faltered when economic and political power centers shared the same address.
In today’s environment, it threatens to erode both democracy and Americans’ trust in it. As corporations like Amazon entwine themselves more closely with government—with CEO Jeff Bezos’ new house just a few blocks away from the president’s daughter—America begins to seem even more like a massive conspiracy of the rich and powerful far from where regular citizens live and work.
The geographic separation of powers has been at the core of the American democratic vision from the beginning. Many of the founders believed that smaller countries had failed in their democratic experiments because they did not have multiple places among which to distribute power. The powerful had become corrupt because they were too concentrated. London was the most dramatic example at the time. In combining the political elite with the economic elite, London, according to the founders, had become a bubble out of touch with the rest of the country and the colonies. (Notice that the Declaration of Independence singles out the problems with the “distant” British government.)
James Madison wrote in The Federalist Papers that part of the promise of the United States was the presence of many types of places and therefore many types of people. The United States would “[e]xtend the sphere” of democratic government over a larger territory, he wrote, and therefore would feature a “greater variety of parties and interests.” There were significant cities in the United States at the time—led by Philadelphia and New York—but no single place contained more than 1 percent of the population. Making one of these cities the permanent capital would combine the new political elite with an existing economic elite, and the American democratic experiment would have been flawed from the beginning thanks to a concentrated, isolated aristocracy.
These concerns were only magnified when the capital was temporarily located in New York City for the first two years after the Constitution came into force. The new president, George Washington, had always been known for his common touch. But two years rubbing elbows with the elite commercial class in New York City led one commentator to remark that Washington had lost touch with the “rabble” that the president needed to understand in order to rule well. The Boston Gazette reported that when the capital was in a dominant commercial city like New York City it created a “vortex of folly and dissipation” because of how it focused the new federal officials on private business there instead of on the people’s business everywhere.
This is a major reason why Washington, D.C., was chosen as the seat of government—a central location that wasn’t too close to any existing economic power center. (Back then, it took several days of travel to reach New York City from D.C.) Washington was also just 56 miles from the mean center of the U.S. populationand 95 miles from the geographical center of the country at the time.
So deep was the commitment to the separation of political and economic power that many states then and now have replicated this commitment, choosing not to place their state capitals in the economic centers of the state. The major state capitals have largely been in places like Albany, Sacramento, and Tallahassee, not in New York City, San Francisco or Miami.
This quality has also distinguished the United States from many other similar democracies. Movements like the Yellow Vest protesters in France, for instance, have a bigger and easier target to attack because the country’s economic and political power is concentrated in Paris. Brexit was very much a revolt against London’s overwhelming concentration of both economic and political power. When Occupy Wall Street took on the concentration of economic power in New York City, though, they were doing so more than 200 miles from where our current president wanted to drain the swamp.
Separating out the places of the political and business elite matters for the same reasons it always mattered. We are still shaped much more by those across the street from us than across the country from us, and placing Big Business across the street from Big Government all but guarantees that its interests would align even more closely. There is plenty of research to assume this will happen. Our neighbors across the street are still more effective than strangers across the country are in shaping what issues we care about, and how we think about those issues.
Of course, Washington has always paid attention to business and money, a trend that was accelerating long before HQ2 announced its arrival. Approximately 80 percent of money spent on lobbying is money spent by business. Between 90 and 95 percent of the 100 organizations that spend the most on lobbying represent business.
The voices speaking for business in Washington, though, have usually been hired hands—political players lobbying for plutocrats elsewhere, not the plutocrats speaking for themselves from Washington. Amazon has already been increasing its presence in town, but largely by hiring the local political elite—starting with Jay Carney, President Barack Obama’s press secretary, who now oversees the company’s public policy and public affairs operation out of D.C..
It’s true that Big Business is already present in Washington—there are 15 Fortune 500 companies in the area—but these are firms that survive and thrive on obtaining contracts from the federal government. In other words, they’re here because their main customer is here. This is dangerous in its own way, but in the end, these CEOs are depending on Washington and the government for their success.
Amazon, on the other hand, is different. Amazon is a multinational e-commerce and cloud computing giant that has huge influence on the lives of individuals totally outside government and effectively represents its own power base.
Amazon says it will bring only 25,000 jobs to the D.C. area, but this understates the quantity and quality of its eventual Washington influence. It will take more than 25,000 people to support those 25,000 Amazon workers. These Amazon positions will be higher-level jobs, the kind that make Amazon officials part of the same powerful Washington networks as the higher-level political elite. And several other big companies have said that if all goes well for Amazon in Washington, they are likely to follow soon and substantially.
Once that starts to happen, corporations like Amazon won’t have to rely on the political elite to do their lobbying for them. The top Amazon officials living and working in Washington can themselves talk to the senator or staffer at the annual dinner for the schools they send their children to, or at the coffee shop in the neighborhoods that they will increasingly share.
Washington, D.C. is taking a victory lap right now, after having won Amazon. The city no doubt thinks now it’s a new kind of leading metropolis—the center of government as well as an economic center. But Washington doesn’t realize that in becoming both, it is undermining the very democracy it stands for.