6.4.5  The Impact of Money in Politics

(This is an archived extract from the book Patterns of Power: Edition 2)

Like anyone else, wealthy individuals and businesses have several ways of influencing politicians by persuasion and the force of arguments:

·      They can work through economic interest groups, for example by advertising or lobbying, as described in the previous section (6.4.4).

·      They can participate in consultation, as described later (6.5.3).

If they feel that that neither of these mechanisms is sufficient, they can also use their economic power to put pressure on politicians – as already described (3.3.9.1).  But businesses and wealthy people can also use money to exert pressure directly on politicians and political parties by making political donations – which is the subject of this section.

Politicians need money in democratic societies and one obvious source is from donations – which may be entirely legal.  Donations can give rise to questions, though, as to what the donors receive in return:

·      A wealthy individual might seek to tilt the tax system for personal reasons, for example, by making it clear that donations are linked to the recipient’s support for particular policies.

·      The construction company Brown & Root, for example, made substantial contributions to Lyndon B. Johnson's election campaign and subsequently received large contracts.[1]  The company was acquired by Halliburton, which has made large contributions to the Republican Party and which benefited handsomely from contracts after America’s 2003 invasion of Iraq.[2]  These companies prospered during the period of office of the politicians who received the donations; it is not clear whether their donations had an impact on their being awarded these contracts (or on wider policy issues) – but businesses normally only spend money for shareholders’ benefit.

These examples illustrate how wealthy individuals and corporations might use their money to gain an advantage over other people in wielding influence on politicians and political parties.  Such practices unbalance political negotiations – and may lack transparency if the donations are covert.

Corporations can also influence the politicians by influencing the media, without needing to own them (in a power relationship which does not appear in the diagram at 6.4.1, due to the limitations imposed by a desire for clarity in a 2-dimensional representation).  It has been alleged that “massive corporations exercise extraordinary political and economic power” in “the American media landscape”.[3]

Freedom of speech has been used as an argument to allow corporate financial contributions to political campaigns and other interest groups.  In the Citizens United case, the Supreme Court ruled that limiting such contributions would “chill” free speech and that they should therefore be allowed.[4]  This judgement apparently ignored the wider issue of the health of American democracy,[5] where corporate contributions appear to conflict with everybody's right to equal representation – a state of affairs which has been described as a form of corruption.[6]  It has had a major impact on American election results,[7] and on voting in the legislature to protect the interests of the super-rich.[8]

© PatternsofPower.org, 2014