American politics operates on many different axes, from conservative-progressive to populist-elitist. But one underappreciated axis is what one might call the public-private axis. At one end are the private-sector partisans who favor Big Business over government. Privateers, if you will, prefer government policies that give large businesses free rein to conduct their affairs as they see fit. Private enterprises get official recognition as partners with the government both as contractors and occasionally as insurers when the government needs help. Put abstractly, banks, media, and other industries get to be the prime movers of world events if they can achieve that level of growth, and Privateers see this as part of a natural, and even good, order.
At the other end is a vocal camp that seeks to reassert the government’s power over Big Business. Among these Publicans (again, if you will indulge me) are critics of “coin-flip capitalism,” a term for financial institutions profiting handsomely not by producing anything but from, essentially, gambling on other companies. Publicans tend to believe that government, which registers corporations and provides them with relevant tax benefits, can direct private enterprise to advance the public welfare by nudging them toward constructive ways of earning their revenue and other practices that favor American workers, production of nationally useful goods, and other public concerns. When frustrated, they will rail against “oligarchs” of private industry who, they claim, look out for their own wealth and power to the detriment of the nation. This trend has crossed partisan lines, with progressives and conservatives alike, if for different reasons, criticizing government for letting Big Business push it around.
But beneath the surface, this public-private divide is much messier, as Tevi Troy illustrates in his new book The Power and the Money. Neither estate is dominating the other. Rather, there is an ecosystem of competition, cooperation, and complexity, an ongoing give-and-take that defies easy characterization between leaders of the public and private sectors. Though our system does include regulatory capture, occasional government favoritism, and even bribery—not that this is Troy’s focus—for the most part, Troy argues, the public and private sectors are not quite in the other’s pocket. The best way to describe it is value-neutral: American public and private sectors have been intertwined in profound ways for at least a century, and no single bailout or industrial policy is going to change that.
In the background of Troy’s book are two gigantic, if mundane, facts: First, we live in a free country; second, we are a nation of laws. Under such conditions, Americans will always be free to provide goods and services the public wants, and get wealthy doing so. And they will always run up against the government when they get large enough to be a significant influence on Americans’ lives (or if those good and services are not obviously lawful). That CEOs and presidents will find themselves entangled, for better or for worse, is practically a law of nature in a nation that is fundamentally free, but not unlimitedly so. The Privateers and Publicans are forever haggling over details.
The substance of those entanglements is Troy’s subject. And the law of inevitable collision between Big Business and Big Government—and the theory that all such collisions tend to advance the interests of both, as Troy subtly suggests, often at the expense of smaller businesses and American consumers—is his focus.
There are two main ways a government can cut a threateningly large, law-abiding corporation down to size: regulation and antitrust. Yet neither strategy pushes CEOs away from the government in the long run; to the contrary, it pulls them closer. Regulation does not tend to remove massive corporations from the market, as economists have long pointed out, because they can afford the lawyers needed to comply while smaller competitors can’t. Troy’s tracing of longtime motor-company executive Lee Iacocca’s trajectory illustrates this principle. Iacocca, who oversaw both Chrysler and Ford, “initially pushed to get government off his company’s back,” Troy writes, but “spent his later years trying to get more government intervention on behalf of his business interests.” His “evolution…was reflective of the shift made by CEOs in the twenty-first century.” Once companies become “big” enough, their interest is no longer to have a favorable regulatory scheme for themselves so much as an unfavorable one for upstart competitors. So while business leaders have a reputation for being a reliably Republican constituency, that has rarely if ever been the case, with CEOs recognizing that various Democratic goals, such as environmental and safety regulations, help preserve their market share.
Antitrust does not fare much better, per Troy. When in 1911 Standard Oil magnate John D. Rockefeller heard that his company was about to be deemed a monopoly and broken up, he was out golfing with a Catholic priest. He calmly turned to the priest and gave him some good financial advice: “Buy Standard Oil.” He shared a mock obituary for his company with friends. He and his investors got fabulously wealthy, as they found themselves newly invested in ExxonMobil, Chevron, and other companies we might refer to now as Big Oil. Even when it works for consumers, antitrust works better for those “oligarchs,” who have the knowledge to capitalize on breakups and spinoffs.
The Clinton administration’s antitrust claims against Microsoft were not welcomed quite as warmly, but led to a similar destination. After all the dust and claims had settled, Gates had learned a lesson, which he would share, per Troy, with young magnates like Mark Zuckerberg. Gates personally advised Facebook’s founder to establish a robust presence in Washington, D.C., immediately—to build relationships, shape regulatory landscapes, and essentially befriend the very government that might otherwise become an adversary. This pivot represents a sophisticated understanding of the public-private axis, positioning one’s company not as an opponent of government, but as a potential partner in broader national objectives. No wonder that figures like JPMorgan’s Jamie Dimon played such an integral role in working with the government to stabilize the American economy when it was teetering on the brink.
One way or another, then, government action tends to pull big companies closer, and generally in more of an embrace. How it happens often comes down to matters more personal than business: slights, moments of flattery, and individual quirks often matter more than formal policy positions. The burgeoning friendship between Hollywood mogul Lew Wasserman and President John F. Kennedy, for example, transcended political fundraising. “Wasserman also helped facilitate Kennedy’s other main interest,” Troy writes, and readers familiar with Mr. President’s womanizing know where this is headed. “When Kennedy would come to town, Wasserman would go to political events without his wife Edie so that he could escort attractive starlets for Kennedy to pursue.” An unsavory example like this demonstrates the breadth of the principle that Presidents and CEOs are just people—albeit powerful people—and, as the anecdote emphasizes, usually men. Some stories are about Apple or Warner Brothers, but just as many are about Steve Jobs or the Warner brothers, the former a man uncomfortable in the spotlight and the latter men who practically invented it. And it is hardly new to the presidency—particularly our new one—that decisions are made by a man, not necessarily on consultation of a whole administration, often according to idiosyncratic logic or a spoils system that rewards loyalty rather than capability.
The personal can also disrupt expectations of financial self-interest. Troy pays special attention to Henry Ford’s often-erratic pacifism (one is tempted to call it “militant”), which led him to defy and befuddle multiple presidents, though getting in line with American military build-ups—which Ford eventually did after the attack on Pearl Harbor—would have been more profitable. Powerful figures, Troy writes, are not simply profit- or power-seeking automatons. They are complex human beings capable of altruism, eccentricity, and deeply personal convictions.
Troy’s analysis does leave some elements of a systematic study underexamined. I would have liked to read Troy’s thoughts on the differences between media corporations and others. Publishing giants Henry Luce and Katharine Graham play fascinating roles in the book, often as social touchpoints or gadflies (sometimes both), but extrapolating lessons from their case studies is a challenge because media organizations are so different from car manufacturers or bankers—especially when it comes to politics. To TIME and the Washington Post, political power is not just an external force to be negotiated, but essentially the raw material they shape into their consumer product. That subtle difference, and its manifestations over the centuries, warrants deeper exploration.
That small request for more of Troy’s insights notwithstanding, The Power and the Money promises to become only more essential reading in the years ahead. Business-government interaction grows more confounding by the day, particularly in this new presidency where major CEOs had front-row seats to the inauguration while prominent members of the administration have indicated a less business-friendly posture. Emerging issues like Environmental, Social, and Governance frameworks, diversity and inclusion initiatives (and opposition to them), and the rapid proliferation of artificial intelligence will create unprecedented collision points with the rise of new players and new regulatory initiatives. For politicos and entrepreneurs alike, Troy’s meticulously researched case studies and careful analytical assessments will be eye-opening and thought-provoking. That is equally true for anyone following the ongoing battle for dominance between the private and public sectors—a fight that is more multifaceted, human, and therefore unpredictable than it may appear.
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