The Political Economy of Corporate Speech

David Weigel at Slate has a very nice article on how the NRA helps stir up conspiracy theories after each massacre. You can think of them as a bit of guerrilla marketing. As he explains,

But what’s the point of debunking any of this? The theories don’t spread because they’re credible. They spread in part because of the confirmation bias of worried gun owners. And that’s actually been egged on, multiple times, by the National Rifle Assocation. The gun lobby might be the only credible group, with real clout, with the ability to bring presidential candidates to its conferences, to endorse the idea that the government would engage in a “false flag” operation. In 2011, as the Republican House of Representatives dug in on the “Fast and Furious” investigation, the NRA’s professional flak magnet Wayne LaPierre speculated that the Feds planned the debacle, to build momentum for gun control.

“Over a period of two or three years they were running thousands and thousands of guns to the most evil people on earth,” he said. “At the same time they were yelling ’90 per cent… of the guns the Mexican drug cartels are using come from the United States.’ ” It wasn’t a wild theory. “It’s the only thing that makes any sense.”

The idea that the government is one short step away from a gun ban is actually integral to the lobby’s pitch. It’s implicit when the lobby brags about ammo sales at gun shows or AR-15s disappearing from the shelves. And give the NRA this: It’s not entirely wrong about the momentum of politics. At the 2012 Conservative Political Action Conference, LaPierre warned that the first-term Obama administration’s “lip service to gun owners is just part of a massive Obama conspiracy to deceive voters and hide his true intentions to destroy the Second Amendment during his second term.”

To understand LaPierre's conspiracy speech, you need to understand the NRA. While ostensibly a grass roots organization that is supposed to look out for the interests of its members, the NRA, in practice, is the chief lobbyist for the gun industry. This change in organizational outlook is relatively recent, as Walter Hicky explains. Most of the organization's money now comes from corporate support. In turn, this means that most of the organization's activity is directed towards supporting the corporations' material interests.

The use of conspiracy theory to support private financial ends is not a new phenomenon in public speech. Look at what the tobacco industry did to hide the link between smoking and lung cancer, employing every last marketing and PR trick to sow doubt in the public mind. Even though they were aware in the 1950s that cigarettes posed huge health benefits, they kept that charade going for 40 years. This is just more evidence that a company will say whatever it wants when it comes to the bottom line.

The tobacco comparison is especially apt, since the gun industry is in a similar position. Despite the fact that gun makers got a law passed in 2005 that is supposed to protect them from class action lawsuits (love your lobbyist!), and despite the fact that the Supreme Court is working tirelessly to kill off class action lawsuits (love your lobbyist even more!), that's clearly the direction we're heading in. As Hank Cardello writes in Forbes,

To be sure, the 2005 law enacted by Congress makes it difficult for firearm companies to be sued over the misuse of their products. But successful challenges to that law have already taken place. Last October, a New York appeals court unanimously held that a gunmaker, distributor, and dealer could be held liable for selling 181 “Saturday night specials” to a gun trafficking ring, which shot a Buffalo high school basketball star. And in light of Newtown, the cries for Congress to appeal the law have begun in earnest. As Vice President Joe Biden met last week with both sides in the gun debate, President Barack Obama vowed to enact new restrictions, with or without Congress. New York Governor Andrew Cuomo is pushing for a ban on assault weapons and allowing police to confiscate weapons from the mentally unstable; Connecticut Governor Dan Malloy is also calling for new restrictions.

As the anti-gun movement begins to hone its strategy, the blueprint is already in place for activists who want to pursue big legal settlements against gunmakers, using the same playbook that was successful against the tobacco industry. But unlike that industry, which staved off efforts to ban or curb smoking for decades before getting socked with a landmark $206 billion fine in 1998, U.S. gunmakers don’t have deep enough pockets to survive such challenges. Their industry profit margins are much smaller—8.5% on annual revenue of $11.7 billion, according to market researcher IBISWorld.

Both of the previous examples illustrate a classic political economy problem, and they should be framed accordingly. Government is a forum for organizations to compete over resources. These can be material (tax breaks) or not (favorable regulation), but it is the presence and relative strength of these organizations that determines what policy is passed.

Take assault weapons. I know that there's a lot to be said for the statistics of the amount of deaths that they cause, but that's for a different time. More importantly, despite the fact that a majority of Americans support a ban, the chances of seeing one pass are very slim. Why? Just follow the money, my friend. As Abram Brown explains,

Any sort of ban on modern sporting rifles will greatly affect the closely held Freedom Group and also impact Smith & Wesson and Sturm, Ruger, too. Modern sporting rifles are among the most profitable weapons that gunmakers produced, says Rommel Dionisio, a Wedbush Securities analyst, as well as one of its fastest-growing segments. Freedom Group has said that modern sporting rifles are a useful tool in driving youth interest in firearms.

These types of rifles account for 20% or so of Smith & Wesson’s sales, Dionisio estimates. It’s probably a slightly smaller amount for Ruger. Ruger’s recent explosive growth has centered on its new compact handguns, made to take advantage of expanded concealed-carry laws. The White House did not specifically mention whether high-capacity pistols would be affected. New York has already limited large pistol magazines. If that went nationwide, customers could stop buying bigger, higher-margin pistols. These more profitable guns are primarily bought for enthusiasts to enjoy the added capacity in the clips.

When the benefits are concentrated but the costs are diffused, expect the minority to usually prevail. The gun companies have a lot to lose in the increased regulation of their product, so we shouldn't be surprised by the extreme actions taken by their lobbying group to protect their industry. Among lobbying groups, the NRA remains an impressive exception. It can attract all of the negative criticism for the industry directly to itself, allowing gun makers to "make the sausage" in government with almost no direct criticism. 

Nonetheless, the underlying framework remains the same, as most politics continues to follow the Golden Rule: where there is money, there is action. We shouldn't expect the industry to remain an exception for long. Conspiracy speech is no different than any other speech; it's generation almost always follows the same financial incentives, allowing us to understand it the same as any other PR or marketing trick.