Private Power in Public Affairs

Definitions

• “Corporation” here refers to any type of organization that seeks to influence political parties. This includes multinational corporations, trade unions, and worker cooperatives. It includes non-governmental organizations, charities, and religious institutions. Corporation encompasses any organization that tries to lobby government. This means lobbyists as well as professional associations, think tanks, and peak industry bodies. For-profit corporations donate the most money. They often fund and work through these other organizations. Corporate executives sit on boards of other organizations. Corporations have the most influence over politics. We will use the term “corporations” for simplicity. But it refers to all organizations.

• “Political Party” here refers to everyone seeking or holding elected office and those working for them. This includes independents, electoral candidates, and incumbent politicians. It includes their political staff, party members, and campaign managers. Political parties are the most common and most important. We will use the term “political party” for simplicity. But it refers to all these groups and individuals.Current Problems

Current Problems

Political Corruption

Like the separation between church and state, we need a separation between corporation and state. Private interests are manipulating and corrupting public decision-making. This happens through donations, speaking fees, and fundraising events. It happens with paid holidays, expensed workshops, and free tickets. It happens with favors, gifts, and discounts. It happens through corporate funding of scientific research and corporate ownership of mass media. It is facilitated by revolving doors between corporations and government. It happens by allowing government officials to trade shares in the corporations they regulate. Even if unsuccessful we must prevent all these forms of corporate influence. Any incentive that aligns political parties with corporate interests is a form of corruption. Legalizing donations does not stop it being corruption. It is just bribery with extra steps. Corporate corruption of political decision-making negatively impacts every aspect of society. It makes most people’s lives worse.

Donors have Expectations

Corporations dedicate resources to influencing politics because they want something in return. They do it because it works. If it did not work, they would not spend the money. Different corporations want different things. But they do not seek the general interests of all citizens. It might be they want favorable legislation, access to politicians, or government contracts. It might be industry subsidies, regulatory changes, or lower taxes. It might be product approvals, privatization of public assets, or merger authorizations. Sometimes it is the suppression of worker movements or the protection of overseas corporate assets. Corporations frame their private interests as having public benefits. For example, by emphasizing the jobs created. But this is spin and propaganda. Businesses seek to maximize profits and share prices at the expense of employees and customers. Trade unions seek to maximize wages and benefits at the expense of employers and owners. Religious institutions seek government support for their beliefs at the expense of other beliefs. NGOs seek priority for their issues at the expense of other issues. Corporate resources in public affairs corrupt the democratic process. The decisions they favor are not in the interests of the majority.

Everyone Benefits

All of us would be better off if we blocked corporate money from influencing politics. Corporate influence over public affairs affects every aspect of our lives, whether we realize it or not. It negatively impacts the air we breathe, water we drink, and food we eat. It raises the cost of medicine, healthcare, housing, and childcare. Without corporate corruption of public decision-making, our incomes would be higher. Our communities would be stronger. Education systems would be better. Rents and mortgages would be lower. Homelessness and crime would be reduced. Everyone, including wealthy people, would be safer and healthier. We would live with less anxiety about our security. There would be fewer wars. We would experience less depression about the state of the world. We would feel less guilt or stress about our positions in society. We would have more hope for the future because we would be better able to solve big problems.

Not a Total Panacea

Getting corporate money out of politics will not fix all problems. But it will make a significant difference. It will not be easy to achieve. But it will be worth it. We will have to create broad alliances to challenge powerful interests. But there are more of us. We must work together despite our differences. We must act in solidarity and not become divided. Organized groups of people have achieved changes far more radical than this. We have ended empires, overthrown monarchies, and deposed dictators. We have stopped apartheids, ended slavery, and established universal suffrage. We can get corporate money out of public affairs. It will be a lot easier than most people realize. But it depends on getting well organized and being effective. This could take generations, but it must happen. Few things are worth fighting for more than this is now. This article focuses on what those changes should look like and why. Having an acknowledged goal makes it easier to work towards.

Proposed Solutions

Ban Corporate Influence

We need a complete ban on all corporate support for political parties. The ban must include all kinds of financial support. This means donations, loans, speaking fees, and more. Corporations must not be able to pay lobby groups to further their political interests. The ban must also include all kinds of non-financial support as well. This means advertising, transportation, accommodation, and more. The ban must include all kinds of gifts. It could be tickets, holidays, home renovations, or anything. The ban must be broad enough to prevent paying for or pretending to have public support. This covers astroturfing, computational propaganda, supporting think tanks, and so much more. Corporate media organizations must not favor political parties. The ban must include receiving any kind of benefits from overseas as well. It must be a complete ban on all direct and indirect corporate support for political parties. There can be no exceptions because these exceptions will become loopholes. An absolute ban makes it easier to judge any case that arises. We simply determine if a corporation aimed to benefit a political party. It does not even have to be a particular party. It could be an attempt to gain favor with all parties.

We must also ban corporate support of all other types of organizations. The only exception would be industry groups such as trade associations. These organizations help coordinate industry efforts such as training and quality standards. It is ok if they are supported by the corporations they serve. But these trade associations cannot seek to manipulate public affairs. Corporate support of other types of organizations is often a conflict of interest. For example, when corporations donate money to universities and think tanks. These institutions then publish questionable and biased research that supports corporate interests. This happens surprisingly frequently and is a corruption of the evidence needed for public decision making. Another example is when corporations donate to non-governmental organizations and foundations. One purpose of these donations is to buy the appearance of public support. Funded organizations align with corporate interests and make it appear as if there is grassroots support where there is none. This is a corruption of government decision making because it presents a manipulated appearance of public support for issues. Corporations also donate to charities to reduce their taxable income. It also makes these charities dependent on support that can be withdrawn. This helps prevent charities from doing things corporations dislike. Corporations thus reduce their taxes while simultaneously manipulating public decision making and exerting influence over the non-governmental sector. We must ban corporations from donating to any other type of organizations outside their own industry.

Establish Advisory Bodies

Advisory bodies will enable corporations to express their needs to public decision-makers. We cannot completely exclude corporations from commenting on and critiquing public decisions. This would have unforeseen and unintended consequences. We need to hear from all stakeholders in society, including corporations. Some advisory bodies will be permanent standing bodies. Others will hear concerns about selected temporary issues. Advisory bodies must be open to all types of corporations. We can have the input of corporations into public decisions without corruption and conflicts of interest. Corporations will still hold considerable influence as job providers. They are major sources of economic activity. They might be coordinators of voting blocs. Political parties will still want to listen to their needs. It will remain in the interests of political parties to consult corporate advisory bodies. They will want to be able to tell voters that they considered all sides of an issue. But democracy is for people, not corporations.

Ban Individual Donations

We must not allow individuals to donate to political parties. Doing so will favor the interests of the wealthy. Wealthy citizens have more disposable income to donate than poor citizens. The wealthy also usually have more to gain from manipulating public affairs. Political parties will modify their policy platforms to appeal to wealthy donors. Even if donation amounts are low, one donation could equal the same amount of money as thousands of votes. This gives the wealthy a louder voice and political parties will respond by favoring their interests.

Allowing donations from individuals distracts political parties from doing their jobs. They should be developing policies, communicating with all voters, reviewing legislation, governing, or holding government accountable. Instead, political parties will spend time trying to collect individual donations.

Allowing individual donations changes party platforms in favor of wealthy interests. Political parties that represent the interests of wealthier constituents will find collecting donations easier. For example, they may promote platforms that include lower taxes for the rich.

No Self-Funding

We must not permit individuals to finance their own political parties or campaigns. This would give wealthy interests an unfair advantage. They must use the same public financing mechanisms as everyone else. This means they must collect signatures using volunteers to access funding for their first election. Then they must use money received from votes. We must not permit wealthy candidates to use their financial assets to support their own election campaigns. For example, they cannot pay for their own travel and accommodation while campaigning. Some advantages for wealthy individuals are unavoidable. For example, they can afford to take time off work to campaign while poorer candidates cannot. Wealthy candidates will have personal vehicles to get to campaign events. This might not be true for poorer candidates. We must not compound these advantages by allowing wealthy candidates to contribute to their own campaigns. The intention is to level the playing field for candidates as much as possible.

Restricted Memberships

The amount parties can charge for memberships must be regulated. If we ban donations, parties that support wealthy interests will increase their membership fees. This will become the new method of raising campaign finances. It will become an exploited loophole. The maximum annual party membership fee must be defined as a percentage of median pre-tax income. The percentage must be low. It cannot give an unfair advantage to wealthy interests. For example, an annual membership could be 0.001% of the median annual pre-tax income. We must also define the maximum membership rule in the constitution. That way it cannot be changed easily. We must use the median and not the mean or average income. Using an average income favors wealthy interests. The average is increased by a few people with very high incomes. Limiting maximum membership fees favors parties with broad appeal. Parties will not be able to collect a few huge membership fees from a wealthy few.

Public Financing

The only source of funding for political parties must be directly from voters. The idea is simple. A small amount of tax money goes into an election fund. It is then allocated to political parties with each vote. The number of votes a political party receives determines its funding. This avoids the economic influence of corporations and wealthy individuals donating to political parties. Other traditional sources of funding have declined. For example, party memberships have decreased. But political parties still need resources to sustain themselves as effective organizations. Corporations and wealthy citizens have replaced memberships as major sources of funding. But this corruption has cost us the integrity of our democracies, so we want to ban corporate and individual donations. Better democracies already use public financing to sustain political parties. It achieves a financial version of the democratic ideal of one vote per person.

Making votes the only source of money for political parties aligns their interests with citizens. The financial survival of political parties will depend upon attracting votes rather than donations. Political parties will listen to their voters rather than donors as they do now. Political parties that currently go against corporate interests fight hard battles. Corporations donate money to opposing political parties. They spend money undermining candidates’ reputations and policies. Removing the possibility of corporate support will change policy platforms. Political parties will no longer need to worry about upsetting corporate sponsors. They will no longer need to worry about corporate money flowing to competing parties. Political parties will have to compete for votes instead of for donations. This will make them focus on policies that voters want.

Allocating public financing must not depend on parliamentary seats or any other measure. This would favor and entrenches major existing political parties. Depending on the electoral system, it might also be fundamentally unfair. Gerrymandering districts will at least not impact the money parties receive. There must be a direct link between individual voters and political parties. Voters will be more encouraged to vote their conscience this way. Strategic compromises will be less necessary. Voters will know they are giving money to their political party. Even if a preferred party does not win seats or form government, they still get the money from votes. The most important effect is that politicians will listen to the majority because voters will be their only source of income.

Funding New Parties

New parties need money to run campaigns. They should be able to collect a percentage of signatures within an electoral region. This must be possible in advance of a new party’s first election. It will give them access to enough public funding to compete. This will help offset the disadvantage of being a new party. Having never competed in an election means they have not collected funding through votes. Public financing favors established political parties. They will have received votes and been allocated money from previous elections. This could entrench mainstream political parties at the expense of newer parties. A temporary funding mechanism is necessary to ensure new parties can compete effectively. It allows them a chance at proposing policies that established parties might not support. However, this option should only be available if a party has never competed in an election.

Compulsory Voting

Compulsory voting does not mean people have to vote. It just means that voters must show up to a polling station. Once in the voting booth, people can leave their ballot blank, write messages on it, or vote for their preferred candidate. Most people tend to cast a valid vote once they have made the effort to attend a polling station. But it is important to note that nobody is being forced to vote. If all candidates are terrible, nobody is forced to choose one. People can spoil their ballot, and this voices their objection. In fact, we should probably have a valid option of ‘none of the above’ because this would provide valuable information.

The punishment for not showing up at a polling station does not have to be large to work. It just must be enforced consistently. People will just pay a small fine if they do not get their name crossed off the list for showing up. But people need to know that they will be fined if they do not show up. Even if the fine is relatively small, it still effectively gets most people to show up. There is also a civic duty component of most people recognizing the importance of holding political parties accountable.

Compulsory voting encourages politicians to consider the interests of all voters. Under voluntary systems, wealthier citizens are more likely to vote. This skews the policy platforms of political parties to attract these wealthier citizens. Compulsory voting changes the incentive structures for political parties. They know everyone will vote, including poorer citizens. Political parties will lose votes to other parties if they ignore poorer or marginalized groups. These are precisely the groups that need politicians’ attention the most. Compulsory voting motivates politicians to consider the interests of all their constituents. In the long run this will help us maintain stable and prosperous societies.

Compulsory voting complements donation bans and a public financing mechanism. It means political parties do not need to spend money just to get people out to vote. This is important because political parties will have less money after we ban donations. Compulsory voting goes well with these bans because it saves political parties money. They can use their resources to better understand voter needs and improve their policy platforms. Political parties can focus on appealing to more voters knowing that most will turn up. It may not be one hundred percent, but it will be most citizens.

Compulsory voting forces governments to make it easier to vote. Governments must remove the ability of citizens to claim voting is difficult. Allowing postal voting enables people working elsewhere or traveling to cast their ballot. Pre-voting can be available over extended periods leading up to election day. Election days can be held on weekends or holidays. Polling booths can be open for extended hours. This makes it possible for people to vote before, during, or after work. When it is easy and convenient to vote, there is rarely a lineup. People do not have to wait in long lines to cast their ballot.

Compulsory voting makes people learn more about politics. Under voluntary systems people can check out and become apathetic. But when someone knows that they are going to vote, then there is an incentive to put thought into the decision. People will pay attention to what political parties are proposing. So compulsory voting leads to more informed electorates, which is a desirable feature of a democracy.

Compulsory voting gives governments real mandates. Most people put a bit of thought into the process and vote for their preferred option. In voluntary systems, we can only guess what non-voters want or how they would vote if they did. When most people vote and a party or candidate wins, then they have a solid mandate from voters. If the percentage of spoiled ballots is high, then this sends a valuable signal to political parties that then need to improve. If they do not, this sends a signal to potential candidates or new political parties that public needs are not being met. Either way, compulsory voting provides additional information about the mandate of government.

The benefits of compulsory voting outweigh the minor inconvenience. Yes, compulsory voting is an infringement on absolute freedom. But absolute freedom from societal obligations is a delusion of sociopaths and narcissists. Much greater inconveniences have been forced upon us because political power has been captured by wealthy private interests. Compulsory voting is an important part of the solution to give regular people more power. Taking an hour out of your day every few years to cast a ballot is not hard.

Electoral bodies must update voter registration lists routinely and automatically. Voters should appear on the voting register when they reach voting age. Then cannot be purged from the register unless they die. Voters must also have the option to change their voting district at polling stations. This way citizens remain registered and can easily change their voting details when needed.

Stop the Revolving Door

The separation of corporation and state must be absolute. This includes a division between the people occupying these two domains. We must not allow people to move back and forth between corporations and the government. Laws must prevent government officials from having jobs provided by corporations. Private sector employees will not be able to accept positions in government. There is too much potential for conflicts of interest. Corporations use jobs to reward previous government employees that helped them. Corporate employees enter government to influence industry regulations. Then they get rehired into that industry once regulations have been changed. Corporations may fund other organizations to hire government officials that helped them, just to make it less obvious. Corporations will also hire previous officials for access to their personal networks. This is helpful for lobbying the right people still in government through established personal relationships. Corporations may also just want knowledge about what is happening in government so hiring people recently in government is desirable. Hiring previous government officials helps corporations work the system to their advantage. Government officials must not be able to work for the corporations they regulated. Corporations must not be able to hire or fund the employment of previous government officials.

Wealth-Adjusted Penalties

Punishments must be severe for political parties accepting corporate support. They must also be severe for corporations providing support to political parties. Fines must rise with the wealth of the offending organization or individual. For organizations, the calculation must be based on the entire corporate group. This includes subsidiaries and other businesses owned by the same holding company. If they have no assets, then the fine must be a percentage of annual income or revenue before taxes. This keeps the risk high even for wealthy corporations and individuals.

Fines must escalate for repeat offenders. For example, the first conviction could mean a fine of 12.5% of wealth or income, whichever is higher. It must then double for each successive offence. This provides three strikes before a repeat offender loses everything. The second offence would be 25%. The third would be 50%. And the fourth conviction would be 100% of their wealth or annual income. If people have not learned after three convictions, then they will keep trying. Society must undermine their ability to impact public affairs.

Laws must account for individuals that hide their assets or income behind complex corporate structures. We must think of those who try to corrupt public affairs for private gain as treasonous and punish them accordingly.

Constitutional Protection

The corporate donation ban, public funding mechanism, and revolving door prohibitions must all be defined in the constitution. This will ensure they are difficult to change if a party favoring corporate interests gains power. The constitution must require a supermajority of citizens in a referendum to change. It must also be a separate vote on this issue and not bundled with other changes. This prevents alterations by combining issues within one piece of legislation during a crisis. Voters desperate for order are more likely to make compromises. We must not allow the separation of corporation and state to be undermined once established.

Educational Backing

The education system must teach about the importance of banning donations and having public financing. Future generations must not forget the reasons behind their existence. It will remain in the interests of corporations to try and influence public decision-making. We must teach each generation why it is important to maintain a separation between corporation and state. This must include the need to make no exceptions. Any updated version of a constitution must not weaken or omit the ban on corporate support or erode public financing. We must teach about the need for votes to be the only source of political party funding.

Inflation Indexing

The amount allocated with each vote must adjust with inflation. The funding must remain sufficient to keep political parties effective. If defined as a set currency amount, it will quickly become insufficient with inflation. Public funding of political parties must remain enough to pay for campaign expenses. It supports political parties between elections. This helps ensure there is an effective choice between parties with policy alternatives. Keeping the amounts indexed to inflation will help maintain effective opposition parties. They are necessary to check the power of the incumbent government. We need multiple parties ready to replace the government if voters demand change.

Everyone Benefits

Making public financing the only source of funding for political parties will benefit everyone. It even benefits the wealthy and those supporting them, such as lobbyists and wealth managers. In the short term, it may seem like these individuals benefit from influencing the political system. But only if we limit the perspective to single issues. Taking a broader and longer-term perspective of self-interest changes the calculation. Everyone must breathe air, drink water, and eat food. We all use public infrastructure and a wide range of products and services. These aspects of society deteriorate by allowing corporate interests to influence politics. People who benefit from influencing one area face costs from others doing the same thing in other areas. The cumulative consequences are hard to measure because we lose so much in terms of opportunity costs. The collective potential for innovation, productivity, creativity, and peaceful coexistence declines. We forgo a better society so that a small minority can have short term private benefits. People at the bottom of society understand this truth. Those sheltered from reality at the top of society are more likely to think it ridiculous. The privileged usually do not realize a societal collapse is underway until it is too late.

The disadvantages to everyone may not be immediately obvious to those directly benefiting. The benefits are direct, concrete, and short term. The costs are indirect, abstract, and long term. Lobbyists earn high salaries for their efforts. Politicians receive donations to help their election campaigns. Donors receive favorable treatment, policies, or legislation. Accountants earn their salaries by finding tax loopholes. Wealth managers receive a percentage for managing fortunes. All these people benefit, but they must still live within society. They suffer if society is undermined by people manipulating the political system. Taxes on the rich decline. This means less money for public services and infrastructure. Corporate power and profits rise. So does inequality and poverty. Rule of law breaks down. The durability of products declines. Resources get depleted. The environment deteriorates. Life expectancy declines. This causes desperation, animosity, and anger at those in society doing well. People suffering unnecessary hardships grow detached or angry. As society gradually breaks down, crime and conflict become more likely. More resources go towards ensuring safety and security. Innovation, creativity, and productivity decrease as more people focus on meeting their basic needs. These processes take decades to materialize and reach destabilizing levels. The benefits of short-term private gain are easier to understand. The costs are more difficult to conceptualize. The true costs of allowing private money in politics accumulate over time.