What is Democracy? (64): Plutocracy?

The role of money in democracy is hotly contested. It’s undeniable that democracies spend a lot of money on campaigns, advertising, lobbying etc. Some argue that wealthy individuals or corporations often use their financial means to distort the outcomes of elections or the framing of policy and legislation. There may also be a problem of vote buying: wealthy individuals or politicians paying voters or giving them some other advantages (such as jobs or cheap housing) in an effort to convince them to vote in a certain way. Worries about the effect of income inequality on democracy are partly based on this type of argument, as are efforts to regulate campaign financing.

And indeed, the huge amounts of money going around in democratic politics could potentially move us away of the democratic ideal of equal influence. So the charge of plutocracy isn’t necessarily ridiculous. However, this is essentially an empirical matter and we should therefore look at evidence from political science. Here’s a short and somewhat depressing overview:

With regard to overall spending, Jacobson (1978) was the first to show an effect on vote outcomes, but this effect was mainly present for challengers [in U.S. Congressional elections]. In subsequent years, the effect of challenger spending was confirmed, but others also found effects for incumbent spending as well (e.g. Green & Krasno 1988, Erikson & Palfrey 1995, Gerber 1998). The basic takeaway is that spending more is clearly effective for challengers, and probably also matters for incumbents too, but solving the causal direction problems involved makes it very difficult to be really certain of any of these findings.

One problem is we know that winning candidates generally have more money, but whether money helps candidates or is just a signal of unobserved candidate quality [i.e., people give more money to better candidates] is unclear. Another problem is that not only are donors attracted to high-quality candidates just as voters are, but they are also attracted to winning candidates—that is, if money is given in order to get access to elected officials, donors are more likely to give to candidates who are expected to do well, because the expected return is greater. In both cases, we could observe an empirical relationship between winning and having more money for your campaign, without the money actually “causing” the victory. (source)

So, maybe the “plutocrats” can’t just simply spend in order to have their preferred candidate elected and instead spend money on the candidate who is good and who will win anyway. However, the fact remains that their spending gives them privileged access to politicians and possibly also privileged influence on subsequent policy, and that isn’t something we want in a democracy. If “winning candidates generally have more money” – whether the money causes the win or not – one can reasonably assume that the candidates will in some way be indebted to or influenced by their donors. Also, even if there are doubts about the causal direction, it is worrying that the evidence doesn’t rule out the possibility that campaign spending – especially spending by challengers – can determine who gets elected.

Regarding deterrence – successful fundraising by incumbents deterring challengers from entering a race – the empirical evidence is weak:

there is no consensus in the literature regarding deterrence, and once again there are major questions about causal relationships (i.e., do high-raising incumbents deter, or is it just high-quality incumbents who can raise a great deal of money and simultaneously deter quality challengers for reasons having nothing to do with funding?). (source)

Whatever the evidence on deterrence, it’s clear that money determines who can run. It’s naive to think that a candidate with few means would be able to run against another having a lot of means. The former would simply be invisible, even if he or she feels undeterred.

What about campaign advertising, one of the more visible ways in which money could play a part in politics?

[A]ds appear to be somewhat effective but have wide variance in their effectiveness (that is, some ads help a lot, most help very little or not at all, and a few are counterproductive). (source)

Voter mobilization – face-to-face canvassing, mailings, phone calls – is also very expensive, hence well-funded candidates can do more of it. Whether they in fact do more of it depends on its effectiveness:

mobilization efforts appear to be effective but costly (face-to-face canvassing appears most effective by far, while phone calls & direct mail have much less effect). (source)

The conclusion is that campaign spending is somewhat effective, and that those candidates with more money do somewhat better. This results in a financial arms race between candidates, increasing the risk of donor indebtedness and of unequal access and influence:

Candidates who raise a lot of money tend to do better, and it’s more likely than not that at least part of this relationship is due to money paying for things like ads and canvassers that help candidates win over new voters and/or turn out their bases. (source)

Vote buying is the other channel through which money could potentially influence democratic politics. Here, some of the evidence is more encouraging:

The experiment took place during the March 2011 elections in Benin and involved 150 randomly selected villages. The treatment group had town hall meetings where voters deliberated over their candidate’s electoral platforms with no cash distribution. The control group had the standard campaign, i.e. one-way communication of the candidate’s platform by himself or his local broker, followed (most of the time) by cash distribution.

We find that the treatment has a positive effect on turnout. In addition, using village level election returns, we find no significant difference in electoral support for the experimental candidate between treatment and control villages.

…the positive treatment effect is driven in large part by active information sharing by those who attended the meetings. (source)

In conclusion: democracy is not simply a market transaction, but neither is it silly to worry about the role of money in elections and legislation.

More on money in politics here. More posts in this series are here.

What is Democracy? (59): A Money Hole

At least in the US, it seems:

Barack Obama felt that he had to spent $730 million to win the 2008 election. That’s roughly the GDP of Timor-Leste.

The so-called killer argument of those in favor of unlimited election spending is that the cost of a ticket to the White House hasn’t kept up with US GDP, as if it should keep up with US GDP:

I see absolutely no reason why a slower growth of campaign spending compared to the growth of GDP should automatically deflate our worries about campaign spending. After all, it’s not as if a country needs to spend more on elections as it becomes richer. On the contrary. If campaign spending is defended as a means to inform the public, then one could counter with the fact that people in wealthy countries tend to be better educated and to have good access to modern information sources. Hence, they don’t need to be “informed” by political parties or candidates, especially not if this “information” takes the form of a deluge of hatefilled ads and lying propaganda. The absolute level of campaign spending should remain a worry, wether or not it’s higher or lower than GDP or any other unrelated indicator.

And before you ask: yes, money in politics is a problem, and more money means more problems. If you’re not convinced try some older posts here and here.

Also, it goes without saying but I say it anyway: money is an issue in all types of elections, not only presidential ones. A record $6 billion will be spent on the 2012 elections, according to the Center for Responsive Politics. Adjusted for inflation, that’s 60% more than the 2000 elections (source).

More posts in this series are here.

Limiting Free Speech (48): Equal Influence, Money in Politics, and “Citizens United”

The US Supreme Court’s decision in Citizens United correctly emphasized the importance of free speech in a democracy. (There’s a thorough discussion of this point here). Free speech serves to expose government corruption and is the means to hold governments accountable to the people. The people also need free speech to deliberate on possible policies and on the respective merits of political parties, candidates and incumbents. The latter in turn need free speech to make their point and attract support and members. And, finally, political assembly, protest and organization require speech.

So it’s fair to say that no democracy can function without free speech. It’s also important, as noted by the Court, that this speech right should not be limited to individuals. Organizations, such as corporations, labor unions, pressure groups etc. should also enjoy this right. They are, after, all, collections of individuals who may want to exercise their free speech rights in common.

However, this is precisely the main problem in the Court’s decision: politics is already heavily dependent on corporate funding. Giving corporations an unlimited right to marshal their substantive resources for corporate political speech would only increase the influence of money on politics. Enormous amounts of money are already necessary in order to win elections in our present-day democracies, especially in the U.S. Candidates have no choice but to accept contributions from those members of society who have the money, and those are generally private corporations. There’s a persistent feeling that candidates can be “bought” and that, as a result of contributions, the interests of large donors receive disproportionate government attention. This may or may not be corruption, but it flies in the face of democratic ideals that tell us that it’s the people who rule, not large donors.

The Citizens United decision seems to make this situation worse by stating that corporations have an unlimited right to engage in political speech and that they can, for example, fund political commercials endorsing or attacking a candidate. As such, this right should not be controversial since it’s part of the right to free speech. However, many people fear, rightly in my opinion, that corporate speech, because it can use disproportionate financial resources, will drown out the voices of everyday citizens and give corporations a role that’s even more important than the one they have already managed to secure for themselves through campaign contributions. Hence some form of limit on corporate spending should be possible. And this applies to both campaign contributions and corporate political advocacy in favor or against certain candidates. Corporations would keep their speech rights, of course, but we would simply limit the amounts of money they could spend on their political speech. In fact, rather than a limitation of speech as such, this is merely a limitation of the amplification of speech.

Now, it’s in the nature of speech in general that some voices drown out others. Some people have more interesting things to say, some are not interested in saying anything, some are better at speaking or are better educated, and some have more resources or time to speak. However, we do generally try to equalize speech in some way, even in ordinary life. We have rules on etiquette and politeness. We think it’s better if people speak in turns, for instance. We don’t allow the best speakers to monopolize everyday discourse. Also, we subsidize education, and one of the reasons why we do that is to give people the ability to speak their minds.

We usually try to do something similar in politics. Democracy is the ideal of the rule of the people. That means that everyone’s influence on politics should be more or less equal. It’s useless to adopt a principle like “one man one vote” if afterwards we allow asymmetrical speech power to dramatically increase the political weight of one vote over another. We know that this ideal of equal influence is impossible to attain, and yet we try to make influence as equal as we can. Limits on campaign spending and financing are part of that effort: a candidate should not be allowed to dramatically outspend other candidates because that would give him or her a disproportionate influence over the voting public. For the same reason, donors should not be allowed to contribute excessive amounts to a single candidate, because then that candidate would be able to outspend other candidates. Now, why not limit corporate advocacy spending as well?

Of course, campaign contributions to candidates as well as spending on advocacy in favor of candidates are clearly acts of political speech, and therefore protected by default. By donating to a candidate or a party, or by funding or producing political advocacy, you state your political preferences. And the fact that this “you” is not, in our case, a private person but a corporation shouldn’t change anything. A corporation is a collection of private persons (owners, directors or shareholders) and they have a right to voice their opinions collectively, using their collective resources, just like other collectives.

However, all this doesn’t mean that we’re talking necessarily about an unlimited right. If corporations or other entities with a lot of resources (wealthy individuals, labor unions etc.) are allowed to donate without limits or to engage in unlimited advocacy, it’s likely that they thereby “buy” a disproportionate share of influence. And this, ultimately and after a certain threshold is passed, destroys democracy. The beneficiaries of their donations or advocacy will receive more attention during the election campaigns, and will in turn give more attention to the interests of their backers once they are elected. During the campaign, it will seem like the beneficiaries of excessive contribution or advocacy have the better arguments because those arguments receive more attention. Simply the fact that a story is “out there” and is repeated a sufficient number of times gives it some plausibility and popularity. There would be no commercial publicity or advertising if this weren’t true. Flooding the airwaves works for elections as well as sales.

However, are we not infantilizing the public with this kind of argument? Is a voter no more than an empty vessels waiting to be filled by those political messages that are best able to reach him? Or can they see through it all and make up their own minds irrespective of what they hear and see? If they see that a candidate receives large amounts of money from a particular company, isn’t that reason enough to vote for the other candidate? The truth is likely to be somewhere in between. People are neither empty vessels for donors, nor objective arbitrators of political truth. And the fact that they can be partly influenced should be reason enough to restrict the political speech rights of those with large resources – or better their right to amplify their political speech. It’s not as if they can’t make their point. It’s just that they shouldn’t be allowed to push their point. Just like we don’t allow a heckler to silence others, or a bully to just keep on talking because he never learned the rules of politeness.