I really don't want to lobby against health insurance reform. But I have to - even though I'd like to see a public health insurance option pass.
Like most middle-class Americans I own stock in a number of health insurance companies through mutual funds in my retirement plan. These companies are using the shareholders money (my money) to lobby against my interests. It's perhaps a straw man, but I suspect the facile response of academic free-marketers is that I shouldn't invest in companies that do things I don't like. Unfortunately, that would mean dropping entirely out of the capitalist system. One simply cannot work a normal job and expect to save for retirement without investing in mutual funds through 401(k) programs (which often don't allow individual stock choices). As a result, I'm invested in a rather large and diverse number of companies, over which I have little control.
My interests as a shareholder are in the survival of a dynamic capitalist system and profit from diverse holdings within it. With the exception of a few companies that have large individual shareholders, most stock is held by people who are not solely interested in the well-being of only a single company. Those interested in a single company can afford to have the "damn the world, I'll get mine" attitude that leads to the apocryphal invisible hand of Adam Smith.
If you're only interested in a single insurance company then it makes sense to lobby congress, contribute to political campaigns, and generally wield whatever influence you can to make sure that your company and your industry are advantaged in any legislation. The same argument applies if you are in the upper levels of corporate management. When your income, bonuses and stock options are tied to a single company that company is paramount.
However, there is an unwarranted leap when the corporate officers claim they are fulfilling their fiduciary duties to shareholders by influencing legislation for preferential treatment. Because the shareholders are not monolithically invested in the company, it is not in their interest to see the markets distorted - such distortion artificially inhibits other industries and companies that the shareholders are also invested in. Through political influence gained by spending other people's money, the titans of industry are able to retain and expand their positions. In this way, they are no different than politicians, except that I don't get to vote them out of office.
The root cause is how easy it is to spend other people's money.
The solution is as simple as it is unattainable. We need laws (or perhaps a constitutional amendment) that makes it clear that only bonafide homo sapiens - and not corporations - have a right to petition congress (i.e. lobby) and contribute to political campaigns. Imagine, with one simple law the corporate (and union, and non-profit) executives could no longer spend other people's money to advance their narrow interests. If the CEO of a company believes that lobbying for or against a bill is in his interest, then he should put up his own money, not the shareholders. Likewise if unions believe that a particular issue is worth lobbying, they should get their union members to contribute but should not be able to simply direct the union dues.
Simple, workable, and it will never happen.