I'm not going to seriously address the economic aspect here, but I'll address the political aspect.
It IS a huge problem that corporations and the rich have undue influence on government. You can't even put a dent in this through campaign finance laws, because most of the corruption comes from other avenues:
- There's a revolving door between politics/bureaucracy and corporate leadership positions. You can't sanely eliminate this backscratching cycle without eliminating regulatory agencies altogether, because if you try to "outlaw" the revolving door, people will complain about unqualified people taking bureaucratic positions instead of "experts." Not to mention, nobody in high places ever gets in trouble unless they've really displeased someone else in high places. There are laws for "us," and there are laws for "them."
- The media and largest special interests are interlinked and in bed with party leaderships. By the time the general election rolls around and the corporations are donating to one of the two anointed candidates at all - which is the corruption everyone notices and complains about - the damage has already been done anyway, since you're usually unlikely to have someone left in the race who wasn't bought and paid for years before the election anyway.
So, do we allow the government to have the power to arbitrarily regulate corporations and argue they use it more, in the hope we can keep them from taking over the government? (Note: It's not authorized by the Constitution, unless you want to grossly abuse the commerce clause...so, arguing for government regulatory power necessarily requires abusing/disregarding the Constitution or amending it.) Or, do we enforce hard limits on the governments power, which can't be crossed for any reason whatsoever, to make control of government completely useless to special interests?
If your answer is the first one, you grossly underestimate the ability of regular people to compete with the "elite" in the regulatory/bureaucratic/legislative tug-of-war, and you probably grossly misunderstand the kind of people that inevitably gravitate towards and thrive in positions of power. There is realistically no winning that fight, and I think Bastiat's
The Law makes some good arguments here. The problem is, most people avoid recognizing the futility of this. Most people are just too emotionally hellbent on getting their pet coercive law implemented at all costs, so they refuse to see that the same underlying government authority for that law will inevitably be used against them more often than not.
To briefly touch on an economic point, it's crucial to point out that dominant/incumbent corporations actually
like most regulations: Every single one means more red tape, fixed costs like lawyer costs, permits, inspections, etc. that any startup will have to deal with, in addition to insurance requirements and size-proportional costs (and even costs proportional to business size still unduly affect small competition, since they have no existing cash reserves to fall back on in bad months). Increasing the cost of entry with regulations is a sneaky way that major corporations cripple competition and amplify the significance of economies of scale. It is this very regulatory environment which drives the economy-wide tendency of modern corporations to endlessly grow and assimilate their competition until none is left and still none reemerges. It is only after their dominance is fairly secure that the biggest corporations really oppose regulations (since they cut into profits without any payoff), and the way that power works guarantees that most of the time, they'll still work in subtle loopholes with back room deals...and all the while, everyone cheers about the big corporations getting their come-uppance from the regulators. There are new laws written everyday, and government meddles in the markets more and more everyday, yet people wonder why corporate dominance just keeps getting worse every decade/year and keep arguing for more government power to fix it.
Long story short: If you want to take away the power of corporations to control government, the only feasible solution is to eliminate that arbitrary government power altogether and take precautions against it ever being reauthorized. Limits on government power need to be hard and non-negotiable (no matter what extreme scenario or sob story someone can come up with for "fudging" them on occasion)...or there won't be any limits at all.
You describe the problem we currently have with central planning controlled markets. Monopolies are protected by being granted favored status through regulations.
