The absence of effective state, and especially national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power…. We grudge no man a fortune which represents his own power and sagacity, when exercised with entire regard to the welfare of his fellows…. We should permit it to be gained only so long as the gaining represents benefit to the community.
Theodore Roosevelt, The New Nationalism, August 31, 1910
Much of TR’s classic New Nationalism speech is spent criticizing the influence of “special interests”, especially business corporations, on government and public policy. While his criticism is primarily based on morality and the good of the country, the situation is best explained by legality and practicality. Legally, corporate officers have a fiduciary duty to avoid wasting corporate assets and to maximize returns to their shareholders, which includes increasing the underlying value of their capital investment. They thus have an incentive and, arguably, a duty, to seek legislation that will help them accomplish that objective. It is the role of the people, through the democratic process, to ensure that this incentive is controlled and channeled by the law in a way that benefits the nation.
Continue reading “A Gaping Loophole”