University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Doctoral Dissertations Graduate School 12-2017 The Three Dimensions of Political Action in United States Democracy: Corporations as Political Actors and "Franchise Governments" Steven Alfonso Panageotou University of Tennessee, Knoxville, [email protected] Follow this and additional works at: https://trace.tennessee.edu/utk_graddiss Part of the Politics and Social Change Commons Recommended Citation Panageotou, Steven Alfonso, "The Three Dimensions of Political Action in United States Democracy: Corporations as Political Actors and "Franchise Governments". " PhD diss., University of Tennessee, 2017. https://trace.tennessee.edu/utk_graddiss/4776 This Dissertation is brought to you for free and open access by the Graduate School at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Doctoral Dissertations by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. To the Graduate Council: I am submitting herewith a dissertation written by Steven Alfonso Panageotou entitled "The Three Dimensions of Political Action in United States Democracy: Corporations as Political Actors and "Franchise Governments"." I have examined the final electronic copy of this dissertation for form and content and recommend that it be accepted in partial fulfillment of the requirements for the degree of Doctor of Philosophy, with a major in Sociology. Harry F. Dahms, Jon Shefner, Major Professor We have read this dissertation and recommend its acceptance: Anthony J. Nownes, Michelle Brown Accepted for the Council: Dixie L. Thompson Vice Provost and Dean of the Graduate School (Original signatures are on file with official studentecor r ds.) The Three Dimensions of Political Action in United States Democracy: Corporations as Political Actors and “Franchise Governments” A Dissertation Presented for the Doctor of Philosophy Degree The University of Tennessee, Knoxville Steven Alfonso Panageotou December 2017 Copyright © 2017 by Steven Panageotou All rights reserved. ii DEDICATION I dedicate this dissertation to my dog, Odysseus. This dissertation was written during our walks. iii ACKNOWLEDGEMENTS First and foremost, I would like to thank my committee co-chairs, Dr. Harry F. Dahms and Dr. Jon Shefner, for the many months they spent working with me on this dissertation. Dr. Dahms has inspired me since the day I arrived in Knoxville. Dr. Shefner has worked with me since day one. Both have been my graduate school fathers. I would also like to thank my committee members, Dr. Michelle Brown and Dr. Anthony J. Nownes, for their support and constructive criticism. I would have never been able to apply biopolitics to corporations had Dr. Brown not started me down this path when she introduced me to Foucault. Dr. Nownes, over many beers, coached me on Congress and the role of money in politics. I am also very grateful for the countless conversations I have had with Joel Crombez, who has been my close friend, travel partner, and research collaborator. Scarcely a sentence has been written that was not in some way sharpened through our talks. I also thank Dr. Michael J. Thompson for being an outside mentor who has been a source of encouragement and professional support for years now. I hope to live up to the example he has set in linking politics to critical theory. And, I thank Aaron Lemelin, Kyle Letteney, Doug Oeser, and Charles Walton for their friendship while I wrote this dissertation. Finally, I thank my parents, Vasilis and Diana Panageotou, for their unconditional love and for all the sacrifices they made to help me achieve my goals. I thank my brother, George Panageotou, for helping me learn the ins and outs of the mutual fund industry, and I thank my sister, Christina Panageotou, for always being there to talk. Last but certainly not least, I thank Sarah Elliott for being my partner and confidant throughout my dissertating. This dissertation was made possible by the guidance, advice, and support of all these individuals. But the responsibility for all arguments and any errors in this dissertation is my own. Many of the arguments developed in this dissertation, particularly those concerned with the participatory-deliberative model of democracy, were drawn from my book chapter “Corporate Power in the Twenty-First Century” forthcoming in The SAGE Handbook of Political Sociology, edited by William Outhwaite and Stephen Turner. iv ABSTRACT A tension has persisted in the United States between the principles of democracy and the capitalist economy. At its core, democracy refers to the ideal that people should govern themselves. Democracy is indeterminate, its future open. But the open-ended principle of democracy collides with the authoritarian nature of corporations that centralize power within bureaucratic institutions designed to rationalize and augment capital accumulation. The purpose of this dissertation is to explain why democratic aspirations to realize a system of ‘rule by the people’ have been confounded by corporate political power. To do so, I delineate how political theorists have envisioned ‘rule by the people’ within the three dominant models of democracy that are prevalent today—liberal, participatory-deliberative, and market democracy. Within each model, people are intended to exercise self-rule by practicing specific modes of political action, which I label as the first, second, and third dimensions of political action. However, theorists have focused on the ways in which human citizens practice politics while paying insufficient attention to the political role of (nonhuman) modern business corporations. This research emphasis is misguided because the political power of citizens has been eclipsed by the political power of corporations. Their power derives from corporations’ dual identity in modern societies—corporations are both political actors and “franchise governments” (Ciepley 2013:140) that are part of the political structure itself. These dual identities feed into each other in a dialectical process that functions to relentlessly augment the political power of corporations. As a result, corporations negate the normative impulse animating each model of democracy and deploy their political power to solidify policies and processes that increase economic inequality. v TABLE OF CONTENTS INTRODUCTION..........................................................................................................................1 Models of Democracy ..................................................................................................................2 A Political Theory of Economic Inequality .................................................................................5 Chapter Overview ........................................................................................................................8 CHAPTER 1: THREE MODELS OF DEMOCRACY ............................................................10 Why Models of Democracy?......................................................................................................11 The Origins of the Modular Approach to Democracy: Joseph A. Schumpeter .........................16 The Influence of Weber on Schumpeter’s Models of Democracy .........................................16 Schumpeter’s Democratic Method vs. Classical Doctrine of Democracy .............................19 Not Two, but Three Models of Democracy ...............................................................................25 Liberal Democracy .................................................................................................................26 Participatory-Deliberative Democracy ...................................................................................29 Market Democracy .................................................................................................................31 Conclusion ..................................................................................................................................34 CHAPTER 2: CORPORATIONS AS POLITICAL ACTORS AND “FRANCHISE GOVERNMENTS” ......................................................................................................................37 The Politics of Corporations ......................................................................................................37 Treating Time Periods as Cases .................................................................................................40 The Gestation of U.S. Corporations: 1776 to 1880s ..................................................................45 The Birth and Infancy of U.S. Corporations: 1880s to 1929 ....................................................50 The Instantiation of the Liberal State and the Recognition of Corporate Personhood ...........52 Corporate Consolidation and the Federal Government’s Half-Hearted Attempt to Stop It ...55 The Adolescence of U.S. Corporations: 1929 to 1970s .............................................................60 The Maturation of U.S. Corporations: 1970s to the Twenty-First Century ...............................67 Campaign Finance Reform: 1970s to Citizens United ...........................................................70 The Recovery of Corporate Profits: Crushing Labor and Restructuring Corporations ..........74 Conclusion: Corporations as “Franchise Governments” ............................................................80