International Relations/Political Science Publication (SUNY Geneseo)
March 25, 2011
By Eric Gomez 

The worldwide financial crisis that struck a little over a year ago and the ongoing debate over healthcare in America have dominated the discussion in Congress and in the media. A common theme in the discussion of these two issues has been the appropriate role of the government in the economy, and if government intervention is appropriate at all. However, there has been relatively little discussion of two pressing issues: the erosion of democratic principles through the massive campaign contributions of corporations, and the increasing importance of lobbying groups in the drafting of legislation. These issues deserve serious attention. These two practices of capitalism run counter to the principles of democracy, upon which this country was founded. This paper will define democracy and capitalism, discuss the contradictory principles of democracy and capitalism, examine the effects of lobbying on the government, and discuss the positive and negative aspects of privately funded election campaigns.

Capitalism and democracy must first be clearly defined, in order to accurately analyze the problems created by lobbying and campaign contributions. Simply defined, a democracy is “a government by the people, a government in which the supreme power is vested in the people and exercised by them directly or through a system”. In the United States we practice a representative democracy, in which all citizens of a minimum age can vote for another citizen to represent them in government. In a democracy the ultimate authority rests with the people, who are charged with electing representatives to positions of power in government. In summary, a democracy is a collective system in which citizens are equal under the law, no one is above the law, basic rights such as freedom of speech, religion, expression are protected, and the ultimate authority and influence rests with the citizens.

Capitalism is defined as an economic system based on private ownership of the means of production employed in the generation of profit. In a capitalist system the main goal of an individual or a company is to accrue as much of a profit as possible. It is an individualistic system, where the individual is at the center of the capitalist endeavor. A completely free market, where individuals have the freedom to make decisions on what goods and services they consume, is the best environment for unending economic growth. The needs of society and the public interest will be met through the “invisible hand” of the free market, a concept originally set forth by Adam Smith in The Wealth of Nations. In summary, capitalism is an individualistic system that provide individuals with complete or nearly complete freedom to maximize their profit, government presence is regarded as an interference to the free market, and an individual’s worth is measured in economic terms.

Based on the definitions of capitalism and democracy set forth it is possible to identify contradictions between the two concepts. The most glaring contradiction exists between the individualistic nature of capitalism and the collective nature of democracy. Capitalism encourages the accumulation of wealth for oneself or one’s company, placing everyone in constant competition with one another. Democracy, conversely, is based on the principles of cooperation and compromise, which stimulate political creativity. Democracy and capitalism also differ in who has power in the system. In a capitalist system, the means of production are controlled by the few; upward mobility is difficult for those who do not control the means of production. This differs sharply from a democratic system. While there is a political elite in a democracy, power is circulated in each election.

What are the possible ramifications of a capitalistic based economy system paired with a democratic government? In a democracy, citizens are equal under the law, and the amount of money one has, or the property one owns should not determine one’s relative influence in government. This, however, has been under attack through the influence of lobbyists in Washington. Lobbying can be a positive effort, as it allows specific groups in society to bring the issues of their constituents to the attention of politicians. However, one cannot ignore that lobbying assumed a new definition in the 21^st century. From 1998 to October 2009, the top ten lobbying groups in America have spent a total of nearly $2 trillion. Since 2008, the top two sectors of lobbying, the finance sector and the health sector, have spent nearly $7.5 trillion. As Congress debates reform for America’s broken healthcare system, the health sector has spent $396 million on lobbying. This has negative effects for the American people and illustrates the contradiction between the individuality of capitalism and the collective nature of democracy. The more money a lobbyist spends, the more influence that lobbyist gains in government. Lobbying marginalizes citizens in a democracy when Industries have such power in government.

Privately funded elections have potentially negative effects on a democracy. Private campaign contributions tip the balance of power in an election toward a particular candidate. Money buys advertisements, TV spots, and other forms of mass media that advertise a candidate; candidates who can afford such advertising usually go on to win the election. In the last election, both major candidates received large amounts of money from different interest groups, sectors, and industries. Barack Obama received much more money than John McCain. Large discrepancies in funds available to candidates not only gives one candidate an advantage in campaigning but it also makes the candidate accountable to the interests of his or her contributors. If a candidate wins the election they must consider the interests of their contributors during their term or risk losing major source of funds when it comes time for reelection.

One possible solution to the problems noted above is to adopt Voter-Owned Clean Elections or Fair Elections. In a Fair Election system any citizen can run for public office and there is an equal and limited amount of funding offered to qualified “clean candidates”. Adopting Fair Elections would stop the erosion of democracy and might help boost participation in government. If elections are publically funded then citizens may pay closer attention to the races; citizens would be paying for elections and would have a vested interest in how their money is being spent. Lobbyists and interest groups could not give an advantage to candidates by giving them money, as the candidates would have a fixed amount of public money to spend. Once elected, officials are only responsible to the needs of their constituents and not the needs of special interest groups, as they are not dependent on a private source of funding to run for reelection.

Lobbying groups and privately funded elections are undermining our democratic system. They promote the needs of the few and the wealthy while neglecting a large part of the citizenry. These two practices must be reigned in immediately to prevent our democracy from sinking into an oligarchy of special interest groups that control our elected representatives through campaign contributions and lobbying donations. Creating Fair Elections is just one step that can be taken that will make our government beholden to the people once again. The individualistic tendencies of capitalism must not be allowed to override the collectiveness of the democratic system.