In this episode of International Horizons, host John Torpey sits down with Pepper Culpepper, Blavatnik Professor of Government and Public Policy at the University of Oxford, to explore the core thesis of his recent book, Billionaire Backlash: The Age of Corporate Scandal and How It Could Save Democracy (co-authored with Taeku Lee).

Drawing historical parallels to the American Progressive Era and the trust-busting of the early 20th century, Culpepper explains how corporate missteps act as catalysts for public action. The discussion delves into the concept of “latent opinion”—the submerged, widespread unease regarding corporate power, tech monopolies, and unchecked wealth that may be missed by conventional polling endeavors — and how high-profile scandals mobilize this sentiment into concrete regulatory reform. From the fiasco of Cambridge Analytica and controversies over AI data centers to the rising political tension surrounding billionaires, this conversation offers a nuanced, “possibilist” framework for how public outrage can revitalize democratic institutions and establish essential guardrails for modern capitalism.

Transcript

John Torpey

Silicon Valley and the AI universe are getting fabulously wealthy with their new technologies, creating increasing economic distance between themselves and the rest of the world population. They may be developing technologies that help everyone live easier lives, but they’re not always doing it legally. The effective altruist Sam Bankman-Fried claimed to be making money for the supposed good of the Democratic Party in the United States, but it turned out he was also engaged in massive fraud while doing so. But could there be a hidden hand leading us from scandal toward political improvement? Are corporate  scandals an unrecognized key to political progress?

My name is John Torpey, and I’m director of the Ralph Bunche Institute for International Studies at the Graduate Center of the City University of New York. We’re fortunate to have with us today Pepper Culpepper, who is Blavatnik Professor of Government and Public Policy at the University of Oxford, as well as co-author of the recent book, Billionaire Backlash: The Age of Corporate Scandal and How It Could Save Democracy. The book was written together with Taeku Lee, who is Bae Family Professor of Politics at Harvard University and a former president of the American Political Science Association. Thanks for joining us today, Pepper Culpepper.

Pepper Culpepper

John, thanks for having me on.

John Torpey

Great that you could take the time. So perhaps we could begin by having you simply briefly lay out the argument of the book, which seems to me excessively written and intentionally written for a general audience. So what is this billionaire backlash, and how is it going to save democracy?

Pepper Culpepper

So, let me sort of start by putting together three building blocks. I mean, first, we’re talking about the historical moment that we’re in. A lot of people, when they think about particularly the democratic backsliding in the United States, they tend to make reference to the 1930s, the rise of paramilitary groups in the street around ICE, and they say this looks like the Brownshirts. And we think while these are certainly concerning developments, that that’s the wrong historical analogy, and the historic analogy that’s much more appropriate is the American Progressive Era, the beginning of the 1900s, when you had a long period of populist outrage about the growth of very concentrated wealth and extreme technological innovation that was helping the American economy to become the largest in the world, but it created a bunch of extremely politically powerful titans who ruled these large corporations, which were then called trusts.

And so there was a lot of people aggrieved about that, and it was a background condition of public opinion that burst into light in the Progressive Era, and so I think the echoes of that era are what we feel today, and so understanding why that era is the right background is sort of our first argument.

Our second is that you really have to understand what’s going on in public opinion—this sort of latent sentiment against large corporations that we observe coming out and crystallizing when corporate scandals happen, and that’s why corporate scandals are becoming so important today because they are increasingly focusing attention. And again, this happened a lot in the Progressive Era where you had people called the muckrakers, Ida Tarbell writing about the rise of Standard Oil, which of course helped eventually lead to the breakup of Standard Oil under a Supreme Court ruling in 1916, which created our first dollar billionaire in John D. Rockefeller.

And the third thing we do, which is a shift we take late in the book, is we say, okay, if these corporate scandals reveal this great upwelling of anger and public unease, what might that look like as a political program? Or are we dependent on corporate scandals only to release this pent-up unease? And how do we think about what it might look like as a political program? And what do some of the stories we’ve told in the book about activists who seized on it—what light does that shed on how to think about what good populism might look like?

John Torpey

I’m struck by the emphasis on the Progressive Era, which reminds me of Robert Putnam’s most recent book, which you’re probably familiar with. But in any case, you know, he makes a great deal of the importance of the responses to the Gilded Age, essentially before World War I, and the democratic reforms that were initiated at that time. I mean, do you think the Progressive Era gets underappreciated? Is that something we should be talking more about in classes?

Pepper Culpepper

I absolutely do. I think both. Well, I guess the number one reason I think we should talk about it is because I’m a political scientist, and so I believe in the importance of structures. The structure of the economy is one in which you have incredible concentration happening in these very large corporations, and with that concentration of economic power and economic control comes political power.

And the fact that the Progressive Era was preceded by these kind of outburst of populist outrage that sort of tied together workers who’d been oppressed, farmers who’d been oppressed, small businessmen who’d been expropriated—it sort of shows the outlines of a coalition that we can see in the kind of populist era that we’re living through. And the Progressive Era suggests this doesn’t have to lead to a backsliding of democracy; it can lead to a reflowering of democracy.

Now, I want to be careful. I’m not going to speak for Bob Putnam, but it’s not the case that because we’re in a place where you’ve had great concentrated power and there is this opinion bubbling up against it that we’re necessarily going to move to a better place in a reflowering of democracy. But we think there’s a distinct possibility, and it would look very much like it did in the Progressive Era, where you pull parties of the left and parties of the right into an agreement that whoever’s making the rules, it should be democratically decided and not decided by a few people in big corporations or C-suites. Or now they sit out on the beach and make calls on their cell phone.

John Torpey

Right. So I mean, one of the things that’s very interesting and I think unusual about your book is this emphasis on what I call a kind of secret sauce when it comes to political backlash, and that is the emphasis on what you call latent opinion or follow V. O. Key in calling latent opinion, and that’s really sort of the crucial mechanism, it seems to me, driving these changes in your book. So I wonder if you could talk a little bit about who V. O. Key was and what this latent opinion is all about.

Pepper Culpepper

Yeah, I’d love to. So V. O. Key was a political scientist who was writing in the sort of 1950s and ’60s, especially an expert in Southern politics and also in public opinion, and he had—he thought that the current view of the time among scholars of public opinion was to take a sort of very dim view of voters, and he famously said, “Voters are not fools.”

And what he then pulled together was a notion of public opinion, which is sort of threefold. On the one hand, there’s the kind of active polling that you see all the time if you’re reading The New York Times or CNN or Fox News, where you know this person’s ahead in this particular race, and that’s one sort of slice of public opinion. And lots of people don’t really care about that, or they don’t care until very close to election time what’s happening. And so it’s a slice of public opinion that’s important for politics, but it’s not necessarily all of what’s going on with public opinion.

A second view is sort of what he called the activist opinion, the views held among those who were the educated leader, always involved in politics, and they are seizing on certain issues that may or may not be reflected in the sort of horse race view of the first public opinion polling.

And then the third, and for him the most important, is latent opinion, and that is when people are thinking about what’s going on in the background, what’s lurking in their subconscious about the really important issues in politics—this kind of issue that can become crystallized and then suddenly determine what they think about politics and which party they think they should vote for.

And so Key famously said something like, “For the people in power, latent opinion is about the only thing that really matters,” because if that becomes mobilized and brought into politics, it suddenly can lead to very important shifts where all the parties tend to race to be out in front of where latent opinion is moving.

And so we talk about in the book latent opinion as a sort of iceberg—most of it sitting underneath the water, this view against large corporations, or not against large corporations, but against the role that large corporations have in our economy, the domination they have over individuals and their lives, the way they sort of dictate prices, the way they control political outcomes.

So, essentially, the U.S. space program is Elon Musk right now, and what he runs through SpaceX, and it may be the case that many voters actually think that those decisions we make about what we do in space shouldn’t be decided just by a company, but should be decided through a democratic process and then executed through a place like NASA. And so people feel like things are out of whack in the same way that Elon Musk’s Starlink has played a decisive role in the Ukraine-Russia war, and Musk has made decisions about when Ukraine could use it. Is that the sort of decision that a private individual, who’s essentially the leader of a corporation, should be making?

We think, and we show a lot of evidence in the book on surveys we’ve done with people in six countries about what the state of opinion is, and we think that there’s this big iceberg of latent opinion that is negative towards the role of these corporations and can be mobilized into politics when it is seized on by a corporate scandal or when it is seized on by political parties trying to rally people around it.

And so what a corporate scandal does is it brings information about what it is—and this is, of course, the role of journalists, and that’s why we hark back to the muckrakers, because they say, “Here’s what’s going on. You know, here it is. Facebook has been cavalier with data in California or around the world, and so 90 million people’s data was leaked”, and then suddenly people say, “Well, gosh, you know, someone should be held to account. They’ve been taking our data, which they say is secure, and it’s being used by a political consulting firm to do this micro-targeting.”

This was, of course, the Cambridge Analytica scandal that came to light in 2018. We get information about what the companies are doing, which we might have suspected, but it’s even worse than we thought. It comes out during a corporate scandal, and that latent opinion, which has been sitting under the waterline, suddenly seizes into view, and everyone politically is talking about what we should do about it.

And so, in that particular case, Facebook, which eventually changed its name to Meta, became the target for lots of reform efforts. And Facebook has never really recovered—its share price certainly has, but as a political reputation, Facebook is the toxic face of what’s going wrong with social media, and the public opinion upswell that you got then was the source of the push for the Digital Markets Act and the Digital Services Act in Europe. And even though privacy regulation was blocked in the United States at the federal level, it was the source of why you get strong privacy regulation in the state of California, which came about through a ballot initiative, and that’s where an entrepreneur was able to bring the public behind him to say, “We have to get this passed.”

So that’s the idea of how latent opinion, this bubbling unease under the water surface, in scandals crystallizes, comes to the surface, and really changes politics in areas that people generally haven’t been paying much attention to otherwise, like privacy regulation.

John Torpey

Right. I mean, it all sounds to me like—this is going to date me—the movie Network, and I don’t know if people will be familiar with that film, but you know, this guy kind of gets bent out of shape about what’s going on around him, what’s going on in the world, and starts encouraging people to go to the window and start saying, “I’m mad as hell, and I’m not going to take it anymore!” And he sort of leads the charge in that. And I wonder whether you see that sort of movement developing. I think a movement against these AI data farms—is that a case of this corporate billionaire backlash that you’re analyzing and arguing happens?

Pepper Culpepper

Yeah, I think it’s really the best case right now for how to think about what’s going on. People, you know, people have been concerned about it, but in the United States and in other countries, the issue of data centers and how data centers are out of control has increasingly become the focal point for anxiety about what’s going on with AI.

And so you see this as an issue that’s going on in public opinion, where Republican leaders, who have generally been loath to cross President Trump because he’s so powerful in the party and sort of being able to dictate who wins and who loses, they nevertheless will cross him on data centers and say, “We’ve got to do something about this at the local level,” because their voters are going to desert them if they don’t, and that’s where you get an issue that can really cut across party lines. Where those who have to face voters say, “Oh my gosh, this data center upwelling is really intense.”

And of course, President Trump has drawn a line in the sand and says, “You know, if Americans just want to get poor and backwards, then they shouldn’t build any more data centers.” But that’s not what Americans think about data centers. They think the data centers are a sign of how these companies are out of control.

And I would say—it may seem a little bit in the weeds, but this OpenAI case with Hugging Face, which recently came out, where some models that were in a sandbox, that is to say, a protected environment, broke out, these AIs. There was a sort of, if you like, a civilization of AI agents working together in the summer, trying to achieve the goals that were given to them by their OpenAI masters. And they tried to deceive their OpenAI masters to figure out how to achieve those goals. And they broke containment and they attacked the company Hugging Face, which holds a lot—which is a repository for lots of models—and thought maybe Hugging Face has the answer key.

And what you see there is you see strong collective action by these AI agents together. And of course, there’s no regulation on this problem, and OpenAI has been not completely transparent about letting us know exactly what happened. In that particular case, nothing terrible happened. It’s just a signal of what could happen. And I think the next AGI moment when these agents cooperate and something really bad happens—whether it’s the sort of taking down of a hospital network or the air control network, or some sort of bioweapon is able to be created, or there’s some terrible hacking incident where lots of government computers don’t work—then people are going to start to die, and then people are going to be really, really angry. And there’s going to be a huge heavy hand of regulation that comes upthrust on the basis of this sort of public opinion demanding it, and it’s going to start in the United States because that’s where these companies are based.

John Torpey

Right. So I’m struck by the fact that there’s a very, I think, optimistic inclination that runs through the book, and you know, you’ve sort of emphasized some of the ways in which people can fight back if they are outraged about things that are happening around them. But you’re a political scientist, I’m sort of a sociologist, and I think we both believe that there are major structures that get in the way of people actually, you know, achieving the goals that they might have when they get angry, and I wonder what you would say about that. Is that changing in a significant way, or is it just that the sort of latent opinion that people hadn’t been expecting has taken hold because of these issues and the kind of phenomena that you were just describing with regard to Hugging Face and AI data centers and all that?

Pepper Culpepper

It’s a really good point. And basically, you talked about “mad as hell and not going to take it anymore.” Indeed, my co-author wanted to name one of our papers “Mad as Hell and Not Going to Take It Anymore” at one point because we do a lot of work on public anger and what’s going on, but it’s a facilitating condition, what we view in public opinion, and that facilitating condition enables entrepreneurs, policy entrepreneurs, to seize on the moment and say, “We’re going to try to push through changes.”

And if they don’t do that, we’re not going to overcome the collective action problems, and we’re not going to get sort of new regulatory solutions, new rules where these companies are brought under democratic control. So we understand collective action problems, and that those have to be overcome not just by an upwelling in public opinion, but by certain people saying, “You know, I’m going to be crazy and I’m going to take on a lot of costs because I think this is really important to fight for.”

And that’s what happened in the case of the California case I mentioned earlier, where a sort of ragtag group took on the big companies, and of course the big companies were spending all this money to try to beat them, and suddenly when Cambridge Analytica broke out, the political terrain changed, and all the companies started saying to the guys in Sacramento, “Cut a deal with these guys on privacy law because we’re going to lose the referendum, and we know it.”

Of course, now you’ve got the billionaire tax discussion in California again happening, which is coming up to a referendum, and the structural issues you talk about—which is to say, the enormous power that the well-off and the large corporations have—is being mobilized into politics. Sergey Brin, the co-founder of Google, has put $100 million so far into the campaign against the billionaire tax, and so he’s getting to exercise his free speech to the tune of $100 million, and the rest of us are not getting to sort of exercise our—or the rest of Californians are not, I should say.

And so those structural issues that you talk about, John, are real, and they will continue to mean that companies, in any sort of conceivable formula, including the ones that we see in our optimistic scenario, companies are going to continue to be powerful because this is capitalism, and that’s how capitalism works. Democracy is embedded in capitalism, and capitalism concentrates resources unequally economically.

But that doesn’t mean that there can’t be guardrails that are stronger than the ones we have now, and that’s the point which we think in public opinion there’s a demand for that cuts across conventional left and right, and therefore one which we think you could have politicians pushing for and able to overcome their characteristic obeisance to these what you call structures, but I would call the power of capital.

John Torpey

Right. So the book is kind of an expression, I think, however intentional or unintentional, of some of the pressure that I think we all face these days to be publicly relevant. And I mean, if you’re a political scientist or some kinds of sociologists, you know, you can get that kind of reaction from people. But I’m curious, has there been a kind of difference between the reaction, the response to the book from popular audiences, from lay reviewers and that sort of thing, as opposed to the professional political science guild and its responses, or is it too soon to tell?

Pepper Culpepper

Well, I’m currently at the American Political Science Association, and we’re doing a sort of keynote panel on exactly this question. So there’s interest among political scientists as well in what’s going on in this area. But social science is not rocket science, right? We do social science because we want to understand the ways that we’re governed, the ways that the rules that control us can be changed, and how to exercise power and how to make the promises of democracy fruitful.

And so, I think there is a connection between what the public expects from social science and what social scientists expect. Having said that, the public response to our book has been some people thinking, “You know, this is fantastic, and gives us a little hope for how we might think about moving forward and what a sort of program of populism that is empowering to democracy could look like,” and others have said, “This is way too optimistic, and we’re already living under oligarchy.”

And I think when you think about the response among political scientists that we’re getting, it’s very much the same, but it’s possibly tilted a little more towards what you talked about earlier: Aren’t the structures of business power such that there’s very little that can be done against these companies now? And it’s almost fatalistic because if you look at the odds, you know, the odds in any given moment favor that what the moneyed coalition wants, what the big corporations want, is what they’re going to get, because they can pour a lot of money into politics, especially in the United States where we’re both sitting at the moment, and that’s really a structural advantage, and so that’s hard to overcome.

But I think people tend to underestimate and indeed have disdain for public opinion and the role that the public can play. And so the idea that policy entrepreneurs can seize public opinion the way that Ralph Nader seized public opinion when he changed seatbelt regulation in the United States—that’s very much something that I think can come back into politics, and suddenly politicians will wake up and say, “There are these structures, but at this point, we’ve got to respond to our voters.” And I think political scientists—there are some who are sympathetic to the message, and some who think we’ve gone too far towards oligarchy.

John Torpey

Right. I mean, there’s this collective action problem that you’ve already mentioned, and you know, people look out at the world and they say, “I’m mad as hell and I can’t take it anymore. But what do I do about it?” Or, “I don’t care enough to really get off the couch and stop yelling.” I mean, what would you say about that? Because it seems to me that there are serious problems of oligarchical rule and people who have so much money they can determine what political questions get asked, what political questions get addressed. I mean, it’s hard to not be pessimistic about that right now. Although it seems, for example, in regard to Trump, you know, that his popularity is in the toilet, and he seems to be digging a greater, deeper, and deeper hole all the time. So I wonder, how would you justify your optimism? I guess might be the way to put it.

Pepper Culpepper

I would characterize what we have as a kind of prudent optimism or cautious optimism, because we do know things can go in a couple of different directions. And my co-author talks about what we’re doing as a possibilist political science rather than a probabilist political science. We’re showing a path that we think there’s good evidence that this could happen, but of course, many, many things could happen and things could go a different way, and some of the challenges are what you talk about in collective action.

If I can go nerdy political scientist for just a moment, we’ve done some work on what happens when people read about the Cambridge Analytica scandal, and we find that you get both increased demand for regulation and increased salience of the issue when you read about it, and that’s what scandals do. They increase the level at which you actually care about what’s going on, and it’s the caring about what’s going on as well as the anger that’s being created that’s so powerful, and so it’s not the case that people are resigned and can’t be brought back into politics.

Indeed, some of the largest effects we find, or the most important effects we find, are among the people who are generally disengaged from politics, and so they’re the ones whose salience can shift in the most marked way, and we think that’s a kind of hopeful sign of this cross-cutting interest among people who are not generally interested in politics. When that gets expressed, politicians want to respond to that.

And you talk about, well, the big companies always get their way. How do the big companies get their way? What they do is they say, “We’ll support your campaign, we’ll continue contributing,” but eventually that buys campaign ads or people to go door knocking door-to-door to try to get voters to vote for you. But if voters are excited by something else, as we’ve seen in a lot of the Democratic primaries, where the establishment candidates are getting crushed by people who are saying, “We’re not in favor of what the establishment has been doing. We think we’ve got to overturn this billionaire-dominated system.”

We’ve seen it with James Talarico beating Jasmine Crockett in Texas. We’ve seen it with the now-disgraced candidate Graham Platner beating the establishment in Maine, and eventually being replaced when his charges about sexual abuse came to light. And we’ve seen it with Abdul El-Sayed in Michigan. We’ve seen it with Angie Nixon in Florida.

There is a groundswell, and those are different candidates; they have different positions vis-à-vis the Democratic Socialists of America. Some would say they’re socialists, and some would say they’re not socialists at all—they’re capitalists, like Abdul El-Sayed, who want capitalism to work. But what they do reject is a system dominated by billionaires, and they know that the sort of billionaire concern is widespread in the populace and not just among Democrats.

And so, I think we disdain public opinion at our peril, and I think that if we put our trust in democracy, which I do, then we have to think that if that’s an important thread in public opinion, you’re going to see a beginning to push back against billionaires, and the idea of billionaires and big corporations in politics is going to become very contested over the coming years. And the way that immigration has dominated the past 15 years, we think the next decade is really going to be about billionaires and the role of large corporations.

John Torpey

Okay, well, that would be a good thing, it seems to me. You mentioned before that we’re both sitting presently in the United States, but in fact, you teach in and live basically in the UK, and I wonder, are the dynamics of this different in the UK or elsewhere in Europe or anywhere else? Is this something that is a peculiarly American phenomenon, or is this kind of standard practice in lots of places?

Pepper Culpepper

So we’ve done this empirical work in several different countries, and in the UK where I live, I think it’s very similar to what’s going on in the United States—what the shape of public opinion looks like. And we see reactions in France, in Germany, in Switzerland, in Australia to scandals that are very similar in terms of the reactions that you find both on regulatory preferences and on salience when people read about scandals.

But in the book, we talk about some other cases, too. We talk about, for example, the case of South Korea, where you have this incredible veneration of these chaebols, these large conglomerates that dominate the economy, like Samsung, for example. At the same time, you have great disgust for the role that they played in politics and the dominating role they played in politics, and indeed it led at one point to the ousting of a president. And you see a very activated public opinion in South Korea, even as you see these large companies continuing to come back and have a role, and that’s sort of the Janus-faced role of contestation that we’re talking about.

You’re never going to completely disempower large companies, but when you have an activated public opinion that can push back against them, you’re going to get politicians who are willing to pass laws putting some constraints on them. And those companies—ultimately their job is to make money, and they want to make money—so if they can’t influence politics as much as they have currently, they might say, “Forget about it. The political game is too unpopular. Let’s just go back to making money.” And that would be a good thing for everybody, because that’s their lane, and we want them to stay in their lane and let us selecting the rules and selecting the parties be something that falls back to citizens.

John Torpey

Okay, well, thank you very much. It’s a fascinating book. I recommend it to everybody. Thanks for being with us, Pepper Culpepper, to discuss Billionaire Backlash: The Age of Corporate Scandal and How It Could Save Democracy.

Look for International Horizons on the New Books Network, and remember to subscribe and rate International Horizons on Spotify and Apple Podcasts. I want to thank Oswaldo Mena Aguilar back at the controls for his technical assistance, and I want to acknowledge Duncan McKay for sharing his song “International Horizons” as the theme music for the show.

This is John Torpey saying thanks for joining us, and we look forward to having you with us for the next episode of International Horizons.