Our Electoral Market System

So far the primaries have had an old-fashioned, Norman Rockwell quality -- a patina of retail politics as campaigners go door to door and prompt record turnouts in small states. Even in the more urban Michigan, where it wasn't exactly a horse race, at least it was heartening to see a primary come off with very little campaign spending.

But let us not kid ourselves. The role of big money in our election process has hardly been eclipsed. Some candidates lavished tens of millions in Iowa and New Hampshire, and the only reason spending was so low in Michigan was that it was a no-contest primary boycotted by many, conserving the big bucks for later races. The 2008 campaign will be a record-breaking, cash-soaked process. Most estimates say it will cost $1 billion; Fortune recently rasied its estimate to $3 billion.

To be successful in large states and the nation and to cement their relationships with indispensable special interests, frontrunners will need to raise nine-figure war chests. Recent disclosures show Hillary Clinton and Barak Obama have already surpassed the $100 million mark.

As a result, the role of private money in politics is more central, and private donors wield more influence, than ever. As a Task Force of the American Political Science Association reported in 2004, "campaign contributions give the affluent a means to express their voice that is unavailable to most citizens."

Each of the major candidates has received large donations from the banking, and securities and investment sectors -- the very sectors whose irresponsible behavior in the sub-prime credit market has wrought havoc throughout the economy. In the cases of Clinton, Guiliani, Obama and Romney, Wall Street donations amount to many millions each. So whoever becomes president is likely to be circumspect, to say the least, in exposing and correcting abuses of predator lenders and financial manipulators.

If you really want to make sense of the election process, ignore the Norman Rockwell posters and egalitarian stump speeches and view it, as economist Joseph Schumpeter did, as a straight market system. Parties, like firms, supply the candidates and the positions they stand for. The role of the electorate, like consumers, is confined to choosing among those office-seekers on offer, something like choosing between Coke and Pepsi.

It may sound cynical, but if anything, Schumpeter's analogy understates the one-sidedness and inequality of our system. In a real market, at least buyers can influence the production process and the array of products brought to the market by "voting" with their purchases. Without satisfying consumers, a firm will go under. But in politics, voters don't provide the money that keeps campaigns in "business" -- voluntary donations do that. Donors therefore have much more influence over the choices offered in the political "marketplace," and voters have much less control, than consumers do over products.

That is why none of the candidates have had much to say about the housing bust. Wall Street political funding have a loud voice in framing the issue, and voters little or none, so the proposals candidates offer fall far short of the reforms needed to prevent future such debacles.

Behind the current financial crisis is the deeper question of whether we really want our elections run as a market system distorted by big moguls and disempowered consumers. Shouldn't it be a "public good" - a service that the society requires but one that is not paid for by private individuals? We pay for national security with tax revenues because paying for it with private contributions would leave us vulnerable. So it should be with democracy, which needs public financing for candidates.

The Federal Elections Commission offers a $3 tax return checkoff for public funding of presidential elections, but this is tokenism compared to the huge contributions that Wall Street financiers bundle together. If we can shift our election paradigm from the flawed market analogy back to one of public good and public finance, we would have a healthier democracy and a more stable economy.

Jay Mandle is the author of "Democracy, America,and the Age of Globalization"

Comments

[TheOtherMaven]

Our electoral process is not the only thing that needs to be shifted back from a market analogy to one of public good. "The market" has intruded into WAY too many areas that it does not belong in. But can any of the rest be set right until the electoral process is?