Political Machine of the 21st Century
The Trump Organization As Platform Capitalism
Like Uber, But For Politics
Today, the Trump Organization lies at the epicenter of political power in the American state. How should we make sense of the family business and its relationship to politics? Ethics watchdogs and journalists speak of “conflicts of interest” when the president governs from Mar-a-Lago or promotes his golf properties and brands. Most conspicuously, the president flaunts the Emoluments Clause of the Constitution by accepting payments from domestic states and foreign governments. Critics denounce the potential for quid pro quo corruption by big spenders looking to court favor at Trump venues or by extending the president’s family lucrative business opportunities. But even anxieties about public corruption miss the big picture.
Donald Trump is building his company into a “platform.” By this, I mean the president has positioned the Trump Organization as the indispensable medium through which the party-government linkage is valorized. Roughly $10 billion circulated throughout the political system in 2016, a conservative estimate that adds up the publicly reported cost of the election cycle with that of lobbying. Although small in comparison to other sectors, the political-industrial complex is increasingly financialized and growing rapidly. The rents extracted by political professionals are actually minor relative to the policy windfall. Companies receive a taxpayer bailout. A new pharmaceutical drug is brought to market. Or, if cryptocurrencies are allowed to flourish. Out of this swamp has grown something novel: a party business that governs.
Platform capitalism is a term that describes our new age of digital monopolies. Like Facebook, Google, or Amazon, the Trump Organization aspires to operate as a ‘platform’, exerting monopolistic control over an industry or sector. (At least, insofar as the political market is organized by the Republican party.) By gaining a commanding position, platforms disrupt business as usual by flexing market-making powers with the potential to extract super-profits. We have become accustomed to hear startups pitched as “Uber, but for x.” (One satirical Twitter bot generates ideas “Like Uber, but for…noodle”). What matters to platforms is not any particular content or commodity — on Facebook, users post whatever they desire. Rather, the gambit lies in control over the infrastructure through which various types of content flow. You buy or sell books on Amazon, but also diapers, clothing — anything. You watch TV there. The Seattle-based company recently moved into shipping packages, cloud computing, and banking services. Platforms are not the car (initially, at least) but the road upon which you drive.
By bringing platform capitalism into the party system, Trump is experimenting with a new mode of political organization. Presidents historically govern by centralizing party activity through the Republican National Committee (RNC) or Democratic National Committee (DNC). More recently, SuperPACs run by political advisors have played an important role as the president’s official voice (think of Priorities USA or Obama For America). Donald Trump’s approach differs. A wide constellation of political actors — from officeholders, campaign committees, affinity groups, donors, and companies, to trade associations and foreign governments — are now marshaling their activity through the president’s family business. What began as a marketing ploy has evolved into a platform upon which partisans and favor-seekers must compete.
From Party Machine To Platform
“We don’t want nobody nobody sent,” one machine politician famously quipped. The axiom exemplifies how coordination is one of the few imperatives in democracy, and that influence is predicated upon closing ranks. Political parties first emerged as a way to promote careers, work in concert with others, and place a common agenda before voters. With the rise of mass politics in the nineteenth century, however, a question arose. If the party coordinates the government, who or what coordinates the party? Bosses and the political machines they built took on the role of coordinating the coordinators. Just as parties were an extra-constitutional form of organization, machines developed unexpectedly as shadow institutions that were vital but one-step removed.
The personalities and institutional expressions of political machines varied widely. Some twentieth century cases were built upon the charisma of populist leaders like James Curley of Boston or Huey Long of Louisiana. Others, like Chicago’s Daley Machine, tracked closer to bureaucratic authoritarianism. What all the machines held in common was a monopoly right to speak and act on behalf of the party, secured by control over the means of election and public administration. Public and private sources of patronage — from the parks department, for example, or a shady land deal — were leveraged into nominations and offices. If you wanted a career in politics, or a policy fix, you simply had to work through the boss or his adjuncts. This is what “practical politics” meant in the industrial era of mass politics.
Today, party competition and patronage flows through Trump’s private company rather than a classic-style machine. The new party monopoly is not about absolute control over nominations or parochial territory. Instead, what matters is shaping where and how investment moves through the political system: the way in which domestic or global capital materializes within national political institutions; how it connects to the political-industrial complex, from election campaigns to lobby shops; where Republicans meet and spend party money; and influence over the means by which personal relationships are formed fundamental to career ambitions. This last point on political socialization, by the way, is elemental for a party trending toward patrimonial-style rule.
As a capital-intensive platform, the Trump Organization has brought order to the chaotic internal Republican party market. The Supreme Court’s decision in Citizens United v. Federal Election Commission (2010) gave rise to innumerable advocacy groups that decentered the traditional party apparatus, from the Tea Party and Koch network, to fly-by night scamPACs, and billionaire donors going it alone. That ‘warring states’ period of internal conflict is over. What now constitutes the boundary of legitimate party competition is policed by the extent to which disparate groups are willing and able to work through the president’s myriad businesses, by courting official favor. Those who patronize the Trump Organization expect to be first in line.
If the classic machines coordinated a mix of public and private resources within the shadow of the party state, how does this look today? Party committees, SuperPACs, and ideological groups are some of the biggest spenders at Trump properties, especially the Trump International Hotel, located just down the street from the White House. Clients follow public signaling from the president himself, his own campaign spending, and patronage from high-ranking administration officials. Frequent travel to Mar-a-Lago has pulled the orbit of corporate lobbying into his private club. Before the presidential election, regulars at the Palm Beach resort largely consisted of the nouveau riche and celebrities. Since 2016, membership fees have doubled and Mar-a-Lago has transformed into a luxury political clubhouse filled with influencers and apparatchiks. Trump’s daughter Ivanka, formerly a top executive at the Trump Organization, works in the White House as one of her father’s main advisors. Meanwhile, Don Jr. and Eric continue to expand the company at home and abroad. Three years into the Trump Administration, doing business with the First Family is doing business with the United States.
In some ways, times have changed since the old machines. Daniel Schlozman and Sam Rosenfeld argue that parties today are “hollow,” in the sense that they have few grassroots mechanisms characteristic of mass participation. The centrality of petty officeholding is also different. Back in the 1880s, the reformer William Ivins referred to public offices distributed throughout the spoils system as the “capital” of the machine. Allocating coveted jobs allowed party machines to embed themselves deeply in social life at the neighborhood or ward level. Patronage workers then returned a portion of salary (or time) back into a common pot that served as the machine’s working capital. Monetary tithes were called assessments. Technically, the cash was a voluntary donation of partisans to their party. But lack of payment meant loss of party standing, and therefore, your job. It took reformers nearly a century to ban assessments at the federal level.
Today, political assessments have reemerged without patronage armies. The parties operate more like brands that market a collective image and cue partisan voters with messaging on TV spots or social media. Thus, in order to centralize management over producer services in the political sector, the Trump Organization has little need to employ a modern army of ward heelers. Butlers at Mar-a-Lago are not directly involved in the election canvass in the way clerks or messengers at the nation’s ports were once upon a time. Yet, it would be a mistake to presume there lacks a material basis to Trump’s mode of political organization similar to the patronage mills of yore.
The platform’s capital is whatever inputs into the Trump Organization are necessary to gain the ear and favor of the president. T-Mobile dropped $195,000 at the Trump International Hotel in Washington D.C. while regulatory approvals were pending for its merger with AT&T. Saudi lobbyists spent $270,000 there, right after the election time. And so on. The public does not have a full picture of private transactions. Still, transparency databases compiled by the Center For Responsive Politics, Citizens for Responsibility and Ethics in Washington, and other investigative reports, suggest that payments are systematic. What is this money but a political assessment? Clients must again tithe a portion of their earnings back to the party leader who, in this instance, is president. Recent financial disclosures show the Trump International Hotel alone earned more than $40 million in revenue last year. The hotel’s political clientele makes it by far the most promising new asset in the Trump Organization’s 500-large portfolio of limited liability corporations.
Capital accumulation as a mode of governance is “very legal & very cool,” according to President Trump. Here, another parallel is apt with the business model of Silicon Valley platforms. Trump Organization profits are only possible via the political equivalent of regulatory evasion. Airbnb or Uber set up shop in a city first, or Facebook rolls out a new service with privacy implications, and then dare regulators to react. Trump has brazenly violated long standing campaign finance law and conflict of interest rules in similar fashion by using his company to electioneer, by making political contributions through his charitable foundation, and by refusing to divest from personal business once in office. Federal oversight and enforcement, weakened by court rulings and party polarization, is non-functional. The strategy is risky. So far it has been more than vindicated. Judge Paul Niemeyer and the 4th Circuit Court of Appeals recently dismissed one of the many emoluments suits, reasoning that it would be inconceivable and impractical to separate the president from a family business that carries his name. Any cases that do reach the Supreme Court are likely to ratify political innovations that entrepreneurs have already brought into existence. Why?
Let us not forget that political finance is but recently deregulated. The post-Watergate consensus about limiting the influence of money in politics only unraveled in the wake of Citizens United v. FEC (2010). Along with a permissive approach to unlimited funds and corporate electioneering, the landmark case established that “ingratiation” is not tantamount to public corruption. McCutcheon v. FEC (2014), McDonnell v. U.S. (2015) and the 2017 corruption mistrial of Senator Bob Menendez (D-NJ) reflect the federal court’s skepticism that favors, gifts, payments or special privileges given to public officials result in quid pro quo behavior. The First Amendment right of individuals and corporations to deploy private wealth, as they wish, in politics is given wide berth by the Roberts Court.
In this way, Trump is the first Citizens United president. Mick Mulvaney explained to a conference of bankers that he never held a meeting with lobbyists during his tenure in Congress, until they donated to one of his political committees. The fee-for-access method is clarifying. Mulvaney is now Trump’s chief of staff, and it is reasonable to ask whether the approach is generalized in the White House. For the Roberts Court, property qualifications like this are desirable barriers that promote the health of national political institutions. The logic harkens back to a long history of property and taxpayer qualifications that once restricted the electorate by race and class. Few people have the money, let alone the time or skills, to contest roadblocks to political participation. In the last cycle when an incumbent president was up for re-election, more than a quarter of reported political donations came from the tiniest sliver of the population — a mere one percent of the one percent. The court’s approach assures the most propertied interests in society will be first in line. If the line gets too long, the gates of Mar-a-Lago, a private club where the Trump has conducted one third of his presidency, can always be shut.
Even if you have money to burn there is no ‘sure thing.’ In business, as in politics, you need to know where and how to invest wisely. That vehicle is the Trump Organization. This does not imply that anyone who drops money at Trump International Hotel or rents space at Trump Tower will get exactly what they want, or when they want it, as if selecting candy from a vending machine. Instead, the president’s company looks to structure the political marketplace. Clients pay to walk through Mar-a-Lago’s veranda or to be on the terrace at the right moment, and catch the attention of someone who matters. And what is the hospitality industry — of which the Trump International Hotel and Mar-a-Lago are exemplar — if not the business of ingratiation? By granting expansive rights to private capital, the Roberts Court invited a risk-taking entrepreneur to run their family business from the White House. After all, Donald Trump is the first president who is also a company. Corporations are people, too.
Jeffrey D. Broxmeyer is an Assistant professor of Political Science and Public Administration at The University of Toledo. His first book, Electoral Capitalism: The Party System In New York’s Gilded Age, is forthcoming from the University of Pennsylvania Press. Twitter: @JeffBroxmeyer