Money in Politics

Many on the left, in particular, have come to see money in politics as a centrally important issue influencing everything else. To these, decreasing the influence of large donors on elections is a major battle in improving American democracy.  On the socialist left, the problem with “money in politics” is seen as merely symptomatic of the fact that the economy is largely owned by a very small number of people, and that this concentrated economic power is incompatible with what most people think of as “democracy”.

Others see these concerns as an exaggeration at best - or at worst, yet another attack from the left on the ability of Americans to do or say what they want. Rather than a central issue for democracy, these see the issue as a distraction from more pressing issues - and a mis-characterization of the nature of politics itself. As a relevant example, some point out how little an influence big money had to stop Donald Trump’s nomination. Others see Trump’s nomination as exceptional - and not illustrative of the general way that big money can arguably sharply influence outcomes.

One way to think about this paradox is that while money in elections may or may not have an impact (there are numerous examples of poorly funded candidates winning), there may be other mechanisms through which money is highly influential. For instance, there is often a “revolving door” in which former regulators are then hired by private industry.  They may then return as a regulator again later.  Sometimes this is due to high levels of technical expertise (say in utilities regulation).  On the other hand, if a regulator can look forward to a highly-paid job in private industry after his tenure as a regulator, he may not be looking out for the public interest while serving as a regulator.  There is a large economic literature on these “public choice” dynamics that leads many economists to believe that most regulation does not serve the public interest but, in fact, is a means through which private firms gain political advantages.

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Michael Strong

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