6.4.5 The Impact of Money in Politics
The impact of money in politics is to bias political decisions in favour of those who have money, at the expense of those who do not.
The purpose of political donations is to persuade politicians to support decisions which are beneficial to the donor. Wealthy individuals and businesses can exert political power by making payments directly to politicians and political parties in the form of donations, party membership subscriptions, and payments in kind (such as the use of offices, loan of transport and administrative assistance). The politicians can respond by awarding contracts, granting planning permission, or cutting taxes.
People refer to such cosy relationships between politicians and wealthy donors as sleaze. There is the natural suspicion that it causes the government to bias its policy decisions for the benefit of the wealthy. Where such activity is legal, it is referred to as lobbying. Where it is illegal, it is referred to as corruption – as described later (7.2.5).
Wealthy people have other ways of influencing politicians:
● Politicians consider their needs because of their importance to the economy, as already described (3.3.9.1).
● Like anyone else, they can influence politicians by communicating with them directly (6.4.2).
● They can form economic interest groups, as described above (6.4.4).
● They can participate in consultation, as described later (6.5.3).
Political donations are different: money is being used instead of persuasion or argument. There is a (weak) argument for allowing them in the name of free speech, but the argument against them is that they tilt political power towards those who have money at the expense of those who do not.
Corporations can exert political pressure via the media, by leveraging advertising budgets for example. The film Shadows of Liberty alleged that “Public information, the news we rely on to learn about what’s happening in the world, to learn about one another, is in the hands of commercial enterprises”.
Lawrence Lessig’s book, Republic, Lost: How Money Corrupts Congress – and a Plan to Stop It, notes that corporate political donations conflict with everybody’s right to equal representation and that politicians “spend up to 30 to 70 percent of their time raising money” (chapter 10). The main thrust of the book is that money in politics distorts democracy.
Different aspects of money in politics are described in the following sub-sections:
● In a democratic system, politicians and political parties need money (6.4.5.1), to communicate their policies to the voters and for other expenses. Money can facilitate challenges to the ruling party, but it can also distort political power.
● If wealthy people can make political donations to obtain kickbacks (6.4.5.2), they can protect their interests and further enrich themselves – becoming a self-perpetuating plutocracy.
● Many people, notably in Britain and America, have become aware of the way in which politicians who respond to wealthy donors are not serving the interests of everyone else. This has resulted in a backlash against political elites (6.4.5.3).
● Governments and people in other countries can pay money to affect domestic politics (6.4.5.4).
This page is intended to form part of Edition 4 of the Patterns of Power series of books. An archived copy of it is held at https://www.patternsofpower.org/edition04/645a.htm.