'Capital' Hill

Fighting big money in government and society

by Thad Williamson

Dollars and Sense magazine, July / August 2000


Nearly 160 years ago a young German journalist wrote, "Politics is in principle superior to the power of money, but in practice it has become its slave." Millions of Americans today would agree-even if they would recoil at the thought of siding with Karl Marx on anything. Though the influence of moneyed interests over legislative outcomes is often much subtler than Marx's "slave" metaphor suggests, the pursuit of public office has never been more closely tied to the pursuit of private financing. On May 24, the Democratic National Committee staged a soft-money fund-raiser in Washington where corporate executives paid up to $500,000 for such perks as dinner with President Clinton. The overall take-for a single night-was over $26 million.

The reaction of many to the big-money influence has been "enough is enough!" Campaign-finance reform efforts have sprung up all over the United States. In several states, these movements have won reform measures based on the public financing of political campaigns. While the lasting impact of such measures remains to be seen, the success of these movements speaks well of Americans' desire for a more genuinely democratic political system.

As important as campaign finance is, however, it is only one thread among many binding American democracy to powerful economic interests. The most important source of big-money power over American politics, in fact, is not candidates' dependence on private funds to run their campaigns, but the government's dependence on private economic actors to run the economy. The influence of money on politics is less the cause than the effect of a political-economic system in which capital controls jobs, investment, and prosperity. Campaign-finance reform alone, no matter how successful, is therefore but a first step in the struggle to expand democratic self-governance in America.


Since the 1970s, most critical attention regarding the role of corporations in politics has rightly focused on political action committees (PACs) and the flow of unlimited "soft money" donations from corporations to the major parties. Yet even if PACs could be dismantled and the soft-money tap turned off, however, businesses would have little problem broadcasting their point of view loud and clear- via the "issue ad."

The issue ad is already a prominent part of the corporate political toolbox. Corporations (or corporate-sponsored "citizens' organizations") run ads which do not mention specific candidates, but which are designed (and often timed) to boost the fortunes of a favored candidate. Full public financing of elections would not prevent big business from running issue ads, either to influence an election or to shape public opinion on a particular policy question. The medical industry's "Harry and Louise" ad campaign-which provoked fears about government-controlled health care, helping to defeat the Clinton health-care plan-suggests what would happen (probably on a much larger scale) if big money were blocked from influencing politicians directly.

In principle, this situation could be ameliorated by action on the federal level. Advocates like Green Party candidate Ralph Nader have long linked campaign-finance reform with media reform. Possible steps may include reversing the trend towards media conglomeration (restoring restrictions on ownership of multiple media outlets), reviving the "Fairness Doctrine" (requiring media networks, in exchange for the use of the public airwaves, to grant all sides "equal time"), and promoting public and community broadcasting. Of course, even modest measures in this direction are certain to provoke hostility from entrenched media interests. Far-reaching reform will undoubtedly require a struggle as protracted as the one over campaign finance itself.


Today, most "credible" candidates for national office come from the most affluent, best-educated, and best-connected segments of American society. The 435 members of the House of Representatives include 145 with law degrees and 65 more with at least one graduate degree. In the past decade, former lawyers and business people have totaled about 75% of the House and 85% of the Senate. Of the 100 U.S. Senators, 25 have degrees from Harvard, Yale, or Columbia. Furthermore, an "accomplished" career in business, law, or government is at present widely viewed as the pre

requisite for political credibility. Only once in the last 35 years have there been as many as six former labor leaders in the House at one time. No former labor leaders have been in the Senate since 1966.

Even under the best possible campaign-finance laws, the well-educated and well-heeled would enjoy significant built-in advantages in congressional campaigns (especially in Senate races). Even if they could no longer draw campaign contributions from wealthy friends, aspiring politicians would still benefit from elite connections. All the assets necessary for a campaign team-legal acumen, business and accounting skills, logistical expertise, media savvy, etc.-are more accessible to well-connected individuals than to ordinary people. Studies show that affluent Americans are more likely than others not only to make campaign contributions, but also to work on political campaigns or belong to political organizations.

To be sure, class and social status do not always determine political stance. However, the institutions through which political careers are built-the professions (especially law), business and industry, the mass media, and the military-all shape future elected officials (and unelected policymakers). Along the way, most rising politicians accumulate pro-establishment perspectives as well as debts to their career benefactors. Sometimes, they learn hard lessons about the costs of challenging big business. After timber interests and other segments of the Arkansas establishment played a major role in ousting Bill Clinton as governor in 1980, he tempered his youthful liberalism and pledged not to antagonize big business. His transformation soon vaulted him back into the governor's mansion and on his way to the White House. Since becoming president, Clinton has largely championed business interests. Political realities forced him to abandon the more progressive elements of his 1992 "Putting People First" agenda.

Public financing of elections may enlarge the candidate pool beyond those with the personal connections (or personal means) to put together a "war chest" of hundreds of thousands of dollars. Perhaps we would see a wider range of representatives from the middle class- more soccer moms and college teachers and fewer business lawyers-in Congress under public financing of elections. At the local level, the impact of campaign reform on the demographics of candidates is likely to be much more dramatic, as early evidence from clean election states like Maine and Vermont suggests. It remains to be seen, however, whether local office holders with activist backgrounds will be able to make credible runs for higher office.


In the most optimistic scenario, a less money-driven political system might allow activists to push the Democratic Party, now as corporate-dominated as the GOP, back into the hands of its rank-and-file constituencies. Perhaps it would also open the door for third parties on the left, parties that don't have a billionaire patron. Over the last two centuries, however, only periods of extraordinary social crisis-such as the coming of the Civil War or the Great Depression-have vaulted progressive (in U.S. terms) coalitions to national power. Without a comparable social crisis, electoral reform alone is unlikely to trigger a fundamental restructuring of American politics, or to bring a progressive coalition to national power.

Even if such a coalition came to power, it would (like FDR's New Deal) still face the structural obstacles which bias the political system towards business and impede comprehensive reform. (Roosevelt saw many of his initiatives struck down by a conservative Supreme Court. He also took it upon himself, in order to maintain the support of some businessmen, to shoot down a first-term bill cutting the work week to 30 hours.) To take a more recent example, one of the last European governments with serious socialist aspirations, the government of Francois Mitterand in France during the early 1980s, was forced to abandon much of its progressive economic program in the face of corporate disinvestment and international economic pressures. A progressive coalition in the United States would face similar dangers.


The basic reason public policy is biased towards business interests is that business controls jobs and investment- two things every representative and senator in Washington, and every governor in every state capital, needs in his or her jurisdiction. Major employers will always have, at the least, privileged access to their elected officials, especially on items of direct relevance to their interests, from regulatory matters to government contracts. In addition,

the government as a whole has a broader interest in maintaining profitable conditions for business (often referred to as maintaining "competitiveness") in order to promote investment and job creation. Measures imposing major new costs on capital would induce capital flight abroad and reduce investment in the United States, so policymakers take pains to avoid them. As a result, policy makers must give disproportionate consideration to business interests, whether the issue is regulations, subsidies, tax policy, or monetary policy.

Unfortunately, at the state level-where campaign finance reform has made real inroads-this constraint is particularly acute, as it is still easier for businesses to move across town or state lines than to move overseas. Governors and state legislatures bend over backwards to attract major new investment, offering free infrastructure, tax breaks, and other subsidies to corporations looking to build new factories, office complexes, or even sports facilities. Campaign-finance reform alone is unlikely to overcome this underlying reality.


The longer-term and more difficult task is to reconstruct, from both the bottom up and the top down, the political-economic system that bends government towards the interests of big business. Given that politicians will always have an interest in "making the economy work," the big question in a discussion of political democracy is the same as the big question when it comes to economic democracy: Who controls capital, and through what institutions? A system based on numerous democratic economic institutions would make politicians concerned with investment and job creation dependent on a broad swath of a democratic populace, rather than a narrow (and narrow-minded) band of private interests.

Is there a plausible way to get from here to there? Government policies and legislation, especially at the highest reaches, are heavily biased towards corporate capital, and against popular alternatives. But governments are not monolithic. Over the last 30 years, local, state, and federal policies have nurtured a surprising array of democratically governed economic institutions-including worker-owned companies, progressive community development corporations, and municipally owned firms. Governments have an extensive toolbox of policies that could promote such alternatives, including pension funds, loan guarantees, public contracts, tax breaks, and technical assistance. A serious expansion of democratic economic alternatives could, in turn, help shift the long-term political equations governing American politics. Job creation and economic development would no longer require submission to the interests of mobile corporations.

It is in this context that campaign-finance reform has a vital role to play. Even modest gains for progressive candidates in state and national elections could help forward an economic-democracy agenda-to increase the number of jobs generated by popular, non-corporate economic institutions, meeting local needs, promoting long-term economic change, and reducing government dependence on corporate capital. A handful of elected officials alone can't raise corporate taxes, end public subsidies to private business, or create vast new government programs. A few interested members, however, can make a big difference in helping to protect (or expand) specific legislation supporting, for instance, community credit unions.

To create a society in which each person really has an equal voice in public life, we have to deal with the underlying structures that currently allow a few voices to hold sway. That means not only keeping big business from writing checks to candidates and parties, but also dealing with the other ways business exerts control over the government. Ultimately, it means inverting a society top-heavy with economic power. To be sure, campaign finance reform can play an important role in building a more democratic economic system. But to equate the achievement of even the best possible campaign-finance reforms with the achievement of a truly democratic society is to expect too much from the reform movements and too little of" democracy" itself.


Thad Williamson is a D&S collective member and co-author (with Gar Alperovitz and David Imbroscio) of the forthcoming The Resurrection of Community, which spells out a systematic policy agenda for promoting democratic economic institutions in the U.S

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