06/21/2014 01:26 pm ET Updated Aug 21, 2014

How to Destroy Oligopoly

More and more studies are showing that the wealthy and corporations exert disproportionate influence over the U.S. political system. This viewpoint has been well documented by scholars Larry BartelsMartin Gilens and Kay Lehman Schlozman among others.

Recently, Benjamin Page and Gilens disturbed many Americans with their finding that "average citizens' preferences have little or no independent impact on policy." Their data suggest that the wealthy have 15 times the influence of the middle class.

As remarkable as this conclusion is, many of the reporters discussing the study failed to read it carefully and missed other important findings. For example, Page and Gilens found that the preferences of elites actually correlate fairly well to the preferences of the average citizen (with a coefficient of 0.78, with 1.flodd0 indicating exact alignment and -1.0 reflecting inverse correlation), whereas business groups have preferences that are far more divergent (-0.10). Public interest groups, such as unions and the American Association of Retired Persons, correlate slightly better with the interests of the average voter (0.12). However, pro-business groups, whose interests  largely conflict with the average voter's, have about nine times the influence as typical voters.

In an e-mail, Page noted that the U.S. might get some "democracy by coincidence" -- meaning that the preferences of the affluent for the most part align with those of the middle class -- but such luck rarely occurs with the preferences of business groups. He also said that while his work with Gilens focuses on the top 10 percent of income earners, the top 1 percent and the top 0.1 percent may have even more influence and more divergent preferences as well. In a paper with Jason Seawright and Larry Bartels, Gilens showed that the top 1 percent have far different preferences and are far more likely to be politically active. This means that reformers must curb the influence of the superwealthy and corporate lobbying (see chart: a higher number indicates strong correlation with the preferences of the middle class and strong influence on policy, a negative number indicates divergence with the preferences of the middle class and weak influence on policy).


Source: Author's Calculations, Martin Gilens and Benjamin Page, "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens."

Floodgates of Money

As disconcerting as these findings are, the problem has been made worse by recent Supreme Court decisions -- namely, Citizens United and McCutcheon -- that opened the floodgates of money flowing from the superrich to politicians and super PACs (See chart.) If the wealthy and business groups had disproportionate influence from 1981 to 2002, when these studies were conducted, imagine their power now that the system is inundated with money. For instance, in the 2012 election cycle, casino magnate Sheldon Adelson gave more money to influence elections than the total individual contributions of the residents of 12 states.


Source: Center for Responsive Politics

What, then, is to be done?

To fix these oligopolistic trends, we must turn to the states for ideas. Patrick Flavin, an assistant professor of political science at Baylor University, may have some answers on this score. He has been using methods similar (although not entirely comparable) to those used by Gilens, Bartels and Page to test which states are most responsive to the interests of citizens. "One nice thing about federalism is that the 50 states serve as laboratories of democracy," he said. "So we can examine different laws and institutional arrangements in the states to see what might promote more egalitarian patterns of political representation." What he finds should give reformers hope: There are policies to strengthen the voice of middle class voters.

Flavin has used his metric of political representation to see what state-level policies correlate strongly with high levels of equality of political representation. Below is a table with the raw ratings. A higher number means that a state is more responsive to citizens across the income scale, while a low score means that only the ideological views of the wealthier citizens is represented in policy.


Source: "Lobbying Regulations and Political Equality in the American States," Patrick Flavin

The table shows that voters are best represented in Montana, Minnesota and Oregon and poorly represented in Georgia, Alabama and Mississippi. In a working paper available online, Flavin shows that states with stringent lobbying regulations better weigh the interests of citizens across the income spectrum. This shouldn't be too surprising; lobbying provides benefits for wealthy corporations and not necessarily for taxpayers. Business lobbyists are known not for considering the social, moral or environmental consequences of the policies they pushing for but for promoting the the narrow interests of the groups they represent. For example, most Americans support stronger gun regulations, but the National Rifle Association has ensured that gun regulations across the country remain lax.

No Common Sense

The big question is what happens when we get money out of politics. Corporations and special interest groups don't generally donate only to one party: Their goal is not usually to elect ideologically similar candidates but to win the sympathies of legislators to their pet issues. The hope is that once the money influence is removed, policies will align more closely with the preferences of voters. There is also the possibility that cleaner elections will lead to more voter participation by decreasing voter cynicism.

Another of Flavin's studies measures how policies to get money out of politics affects voter interests. He uses data on state spending priorities from 1962 to 2008. He also rates the states for each year on the basis of six factors: disclosure, limits on individuals, limits on organizations, provision of public funds for governors, provision of public funds for legislatures and clean elections. He finds that states with laws to keep money out of politics dedicate more money to redistributive programs.

Finally, states have experimented with various policies to increase voter turnout, thereby reducing the turnout gap between the rich and poor. Elizabeth Rigby and Melanie J. Springer examined what reforms affected voting inequality at the state level. They find that in states with high registration inequality, the motor voter law (a law that requires states to allow voters to register when applying for or renewing a driver's license) had a modest effect on decreasing voting inequality and that same-day registration had a strong impact. Sadly, many efforts have been focused on getting out the vote; the far more important reform is boosting registration among lower-income voters. These findings are important because a recent study using 30 years of state-level data by William Franko, Nathan J. Kelly and Christopher Witko found "that where the poor exercise their voice more in the voting booth relative to higher income groups, inequality is lower." Franko found that states with wider turnout gaps between the rich and poor are less likely to pass minimum-wage increases, have weaker anti-predatory-lending polices and have less generous health insurance programs for children in low-income families. Policies to increase low-income voter registration could help increase their voice in the political process and lead to policies that benefit them.

These important findings suggest two things. First, there are common-sense ways to get money out of politics and take back our democracy. Second, reformers should work to implement more state-level reforms. In a federal system such as ours, states play an important role in shaping the distribution of income. We need to implement corporate lobbying reform, donor disclosure, public financing of elections and same-day registration. The influence of money in our political system isn't inescapable, and we should look to the states to find effective measures to curb the power of money. However, as Fredrick Douglass noted, "Power cedes nothing without demand." Simply knowing what works isn't enough. We need to put these policies into action.

This post was originally featured on Al Jazeera.