What Occupy Wall Street Gets Wrong About ALEC

Courtesy Shutdownthecorporations.org

Occupy organizations in about 80 cities promised a day of action Wednesday around the theme “Shut Down the Corporations.” Well, not all of the corporations. Just the ones that sponsor the American Legislative Exchange Council, or ALEC. But that leaves a lot of rich targets. According to the day’s live blog, in Austin, Tex., the Occupiers marched on Monsanto. In Portland, Ore., a march passed through a 76 gas station and stopped briefly in front of a shuttered Verizon store. Occupy New York scheduled a ceremony to bestow upon Pfizer an award for “Excellence in Profiteering.”

Alison Fitzgerald and I wrote a feature on the council last December. We described ALEC as a nonprofit that:

… brings together state legislators, companies, and advocacy groups to shape “model legislation.” The legislators then take these models back to their own states. About 1,000 times a year, according to ALEC, a state legislator introduces a bill from its library of more than 800 models. About 200 times a year, one of them becomes law. The council, in essence, makes national policy, state by state.

It’s a bill laundry. Corporations suggest a bill to a state legislator, then bring it to ALEC’s attention, where, after a complicated procedure I have to allude to because ALEC gets aggressive and finicky about descriptions of the precise arrangements of its legislative and private-sector boards, the bill becomes “model legislation,” which the corporations can then suggest to other state legislators. In one case that we were able to document, the corporations actually wrote the bullet points of the initial piece of legislation themselves. There’s nothing illegal about this, but it does look bad. ALEC creates the fiction that these bills grow wild in the fertile, democratic loam of America’s state legislatures.

All protests are ideologically slippery. People rally for any number of reasons, and not always for the bullet points offered by the organizers who got them out on the street. Fine. But it does seem like the Occupy movement continues to focus on the wrong thing: profits. From a page on the Shut Down the Corporations website, titled “Why the American Legislative Exchange Council”:

ALEC is one of the most successful mechanisms used by the 1% to control state and federal laws. It is much more than a lobby group. ALEC creates model legislation written to increase the profits of large corporations, and hands it off in secret to lawmakers who then introduce it as their own.

We could quibble about whether the 1 percent are people or corporations, but otherwise this is roughly the same take Bloomberg Businessweek had on the council. What’s missing in the anti-ALEC rhetoric is an explanation for why profits are bad. Again, from the same post:

As a first step in reclaiming our voices and challenging our society’s obsession with profit and greed we will shut down the corporations that are part of ALEC.

Sigh. Profit is just bad. This is part of the Occupy movement’s cosmology, and as such, doesn’t need any further proof.

But profits are neither good nor bad. Water flows downhill. Corporations seek returns on equity. This is good for my retirement portfolio, and bad by way of any number of negative externalities that begin with climate change and end somewhere around why America has inadequate rural broadband. ALEC is bad not because it helps corporations profit, but because it makes them lazy.

Corporations can invest in new capital. Or, if they’re lazy, they can secure favored tax treatment for their existing assets. They can invent new things or, if they’re lazy, they can find ways to collect rents on the things they already invented. They can compete on service and price or, if they’re lazy, they can arrange regulation that ensures they won’t have to compete at all. The American Legislative Exchange Council doesn’t replace democracy; all those model bills are still voted on by state legislatures before they become law. But it does quietly ease passage of bills that the laziest corporations like—the ones that prevent them from having to invest, invent, or compete.

Corporations should be made to feel shame for sloth, just like people do. They should be embarrassed to have facility with government be a part of their business model. Occupy is almost right to target ALEC. The problem is, the right reason to target ALEC is actually better suited for a Tea Party rally. Or a Jesuit school. Which is why we’re stuck with a “national day of action” about profit. And, yes, street theater in front of the Koch Industries building in New York.

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