The Election Industry vs. Democracy

by Steve Heikkila

HILLARY CLINTON & TIM KANE, DEMOCRATIC CONVENTION (PHOTO CREDIT: LORIE SHAULL) CC BY-SA 4.0

The electorate is not too stupid or too tired to control the political system. It is merely too poor.” –Thomas Ferguson

In a post-Citizens United political ‘marketplace’ where money = speech, ‘free’ speech has become remarkably expensive. According to The Center for Responsible Politics, a non-partisan money-in-politics watchdog group, the total cost of elections for the 2016 U.S. election cycle was $6.5 Billion. Borrell Associates, an advertising industry market data and research agency, puts the figure at $9.8 Billion and expects that figure to balloon to $11.7 Billion for the 2020 election cycle. That’s a lot of ‘speech’. The vast majority of that money was spent on advertising (mostly tv ads) and campaign consulting.

While there has always been money in American politics, something dramatic has occurred in the course of the neoliberal period of the past 40 years. American electoral politics has effectively transformed from a public institution into a multi-billion dollar private industry. It’s the inevitable outcome of unleashing market forces on democratic politics.

It’s telling that John McCain, co-sponsor of the 2002 bi-partisan McCain-Feingold campaign finance reform act (overturned by the Supreme Court in Citizens United v FEC), was the last Presidential candidate to accept public campaign finance funding. Elections are mostly privately funded now (exclusively at the Presidential level), overwhelmingly by the rich and by powerful corporate interests eager to purchase political influence.

According to the religion of American capitalism, everything in life is better when we let the market decide for us. With few limits on spending, the advent of the superPAC, and the influence of “dark money”, the market now decides in our elections as well. The American business of politics is a full-blown campaign-industrial complex in the words of some critics, replete with its own professional experts and consultants, and its own pay-to-play rules of engagement. Because if this pay-to-play nature, un-monied interests (i.e., the overwhelming majority of American citizens) get no representation for their political interests. As political scientist Thomas Ferguson starkly puts it, the electorate is now simply “too poor” to control the political system. This paints a dour picture for democracy–and with it the hopes, dreams, and needs of ordinary citizens.

While this situation is rather bleak for we the people, it’s not without hope. Recent political campaigns ranging from the presidential bids of Barack Obama in 2008, Donald Trump in 2016, and Bernie Sanders in 2016 and aiming at 2020, to Alexandria Ocasio Cortez’s unexpected grassroots-campaign-fueled upset of DNC establishment heavyweight Joe Crowley in 2018 reveal cracks in the election industry’s otherwise seamless grip on democracy. Disrupting the election industry in defense of democracy is possible. In this introductory piece we’ll explore how the campaign industry works to cut the democratic electorate out of the political process. In a follow up piece we’ll examine the various strategies used by Obama, Trump, Sanders, and Ocasio-Cortez that provide insights regarding how to wrest democratic control back from the plutocrats.

The Campaign-Industrial Complex

Laundry detergent and Kamala Harris are very different products, but the methods and techniques by which each is sold is remarkably similar. And not just Harris obviously, but also “Mayor” Pete, Beto, Joe Biden, Amy Klobuchar, and the rest of the Democratic presidential contenders. And recalling the 2016 GOP presidential primaries let’s not forget Ted Cruz, Marco Rubio, Jeb Bush, and the full GOP family of products. Empty suits jockeying to be stuffed with cash, offering up poll-tested talking points in the hopes that one or two of them might ‘stick’. Their language is artfully vague enough to allow them to lean in if a sound bite resonates, and to plausibly disavow, reinterpret, and deflect if it doesn’t. If it sometimes seems as though they’re speaking just slightly over your head, they are. Bear in mind that as a poor, uninfluential voter you’re only nominally the target audience. They’re pitching to the donor class who funds their exorbitantly expensive campaigns. The donor class who ultimately determines with investment dollars who will be elected.

The simultaneous rise of modern advertising and PR techniques (commercial polling, market research, etc.) and the mass communication capabilities afforded by radio gave birth to the modern American “business of politics”. Pollsters, in the words of historian Sarah Igo, simply “transferred the techniques honed for selling soap and cereal from the buying to the voting public.”

In the early days, some of the same ad agencies that advertised consumer goods also offered their modern selling techniques and services to political candidates. Unfortunately, however, the partisan nature of political campaigns proved bad for business. If the same ad agency that hawks Buicks and Pontiacs also hawks a Democrat candidate congress, that will sour Republican consumers on buying Buicks and Pontiacs–and there goes the General Motors account. This advertising conundrum left open an incredibly lucrative business opportunity, which modern political consultants gladly filled. Political consultants avoid this partisan pitfall by offering modern selling techniques to political campaigns only, and typically to one party only. There are Democrat consultants and Republican consultants.

It’s not only their effectiveness at employing advertising techniques to win elections that popularized the professional political consultant. As political scientist Adam Sheingate explains in his book Building a Business of Politics: The Rise of Political Consulting and the Transformation of American Democracy, an unintended side-effect of campaign finance law made consultants almost a necessity for managing a successful campaign. Candidates for political office are required to keep track of and report every campaign dollar spent. Tracking millions of dollars spent in multiple markets, via multiple vendors and services, over months and years, is an overwhelmingly complex accounting and management task best left to professionals.

Today no campaign is taken seriously until it hires professional consultants “to signal,” in Sheingate’s words, “the viability of their campaign and secure the support of donors.” “Like the microscopic bugs in our gut,” Sheingate explains, political consultants are “crucial to the metabolic functioning of a system of influence peddling that turns vast amounts of money into legally sanctioned political services.” Primary among those services are advertising, polling, and direct mail marketing.

TV Ads, Long Campaigns, and SuperPACs

This year’s Canadian federal election campaign season will run for 40 days. 40 days! It’s like they never end! Can you imagine having to listen to political candidates pitch their platforms for over a month?

I’m being facetious. From a US perspective this is hardly a campaign season at all. It would be nigh impossible to spend $11.7 Billion in such a short time frame. The next US federal election is in November of 2020. The first Democratic candidate to declare his candidacy for US President was the milquetoast neoliberal John Delaney on July 28, 2017. That’s more than 1,100 days before the election! Now that’s a meaty spending season. Our elections run for years. They never end, really. Consider that Delaney threw his hat in the ring for the 2020 election before the 2018 election! Campaigning overlaps successive elections, making them perpetual and incredibly lucrative.

American politicians are always campaigning, or at least always fundraising to be able to continue to afford campaigning. This they do instead of, for example, actually legislating or performing the other functions they were elected to do. Adam Sheingate suggests that we have the “political consultant racket” to thank for this–for reasons I’ve already alluded to. The election industry is a for-profit business. It’s fundamentally an extension of the advertising business. It’s important to note that this is the same business that Facebook, Google, and almost all magazines, newspapers, television networks, and other mass media are in. The longer the campaign cycle, the greater the opportunity to sell ads. And political candidates, eager to take advantage of every edge against their competition, are loathe to say no to their consultant’s advice to advertise early and often.

Speaking of advertising, there is now plenty of evidence that TV advertising for political candidates is highly ineffective. And yet, as I noted in my opening paragraph, the vast majority of campaign cash continues to be spent on TV ads. Why? Because political consultants work on commission. They get a cut of the ad spend, and TV ads are expensive.

Some political consultants have become millionaires on ad commissions. When candidates began to realize what a killing the consultants were making on ad commissions they demanded a bit of austerity so that their campaign war chests might last longer. Here, Citizens United’s allowance for SuperPACs was a godsend for the consultant industry. Super-PACs can raise unlimited funds so long as they’re isolated from the candidate. Now the candidate, by law, cannot know how the Super-PAC is run. Consultants must provide a firewall between the two, which of course means that the sky’s the limit on how big of a cut of the ‘investments’ the consultant class takes.

Requiem for the Median Voter Theorem

Suggesting that all of this money in politics might have a corrupting influence on our democracy is an outlandish understatement. It’s obvious even to the most unobservant citizen. Nevertheless, most people–from average voting citizens to political pundits and academics–continue to evaluate American elections as though they’re a public democratic institution rather than a commercial industry. They want to know what voters think, what their issues and concerns are, and how they’re likely to vote–as though the dog of democracy still wags its tail rather than the tail wagging the dog. One would be better off evaluating elections according to economic investment principles that apply to markets, because this is, after all, now they actually function.

In a nutshell, this is the premise of University of Massachusetts Professor Emeritus Thomas Ferguson’s life’s work: The Investment Theory of Political Parties. His 1995 master work Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems is the definitive resource on the subject. In terms of its predictive power for determining election outcomes and policy, the Investment Theory of Political Parties has proven to be devastatingly accurate.

Before digging into Ferguson’s work, however, it’s worth our while to examine and debunk a widely held and wildly flawed view of how elections work: the Median Voter Theorem. If so many Americans subscribe to the Median Voter Theorem, it’s in part due to the fact that it seems almost commonsensical. Here is how it works.

Take any political policy proposal. For purposes of our example we’ll call ours Proposal X. Some people will be enthusiastically all in on Proposal X (YES on X!) and some people will be vehemently opposed to Proposal X (NO on X!). Everyone else will occupy a position somewhere in between those extremes. This is the premise of the Median Voter Theorem. For any given political proposal the Median Voter Theorem posits that voters can be placed along a single spectrum bounded by the extreme YES and extreme NO positions. It assumes, moreover, that in terms of numbers of voters the spectrum isn’t flat. Nor is it slanted sharply to one side in the case of a very popular (or very unpopular) proposal. It assumes, instead, that the spectrum is more like a bell curve with most voters residing towards the middle. This is the position of the much coveted median voter. Being fully for or fully against any policy proposal on this model is thus a losing proposition. To win an election, the savvy politician will stake a moderate position between the extremes: either center-YES or center-NO. That’s where most of the voters are.

It’s on the basis of the common-senseness of the Median Voter Theorem that Liberal Centrism purports to be a pragmatic politics (I explored centrism in detail in this article in June). The same could be said for the now extinct (R.I.P.) moderate Republican. The problem with the Median Voter Theorem, however, is that it’s a horrible predictor for determining what’s politically popular. I can illustrate this with a very simple example that serves almost as a reductio ad absurdum.

Imagine you’re a political analyst who is asked to predict how a school bus full of children will vote on the proposition “who wants ice cream?” We all know that while there may well be a few children who don’t care for ice cream, are lactose-intolerant, etc., the overwhelming majority of children will be enthusiastically all in on ice cream. We know this because we know that ice cream is extremely popular among children. If you’re a political pundit who subscribes to the Median Voter Theorem, however, you will predict that the children will be solidly “meh” on this ice cream proposal. “Yay! Ice cream!” is simply too extreme of a view for a majority of children to get behind.

While the Median Voter Theorem may be predictive concerning certain highly polarizing topics, in the end this accuracy is akin to that of a stopped clock offering the correct time twice per day. In many cases (like children and ice cream) it’s simply wrong. Despite this harsh reality, the Median Voter Theorem remains extremely popular both among academics and the mainstream media punditry. It explains, for example, Edward Luce’s very plausible prognostication in Financial Times on December 30, 2015 regarding the prospects of the presumed Republican presidential front runner (Ted Cruz at the time, as Trump still wasn’t quite being taken seriously):

“But elections are still won in the centre, or what is left of it, and Mr Cruz will be too far to the right of the median voter to make it to the White House. Despite uncomfortably close polls, Mrs Clinton will win the electoral college by a landslide. Democrats will take back the Senate. But she will start her term in a very polarised Washington. There will be no honeymoon“

It was a reasonable prediction save for the fact that Hillary Clinton lost, and the Republicans retained control of both the Senate and the House. In other words, it was completely wrong.

According to an analysis of the 2016 elections by Thomas Fegurson, Paul Jorgensen, and Jie Chen the Clinton campaign failed, in large part, due to its own Median Voter Theorem assumptions. Remarking on this research, Feguson, et. al. write:

“…if one looks at the Clinton campaign’s fundraising, it is immediately apparent that it was trying to run an American version of the famous “Trasformismo” system pioneered by a succession of center-right Italian politicians in the decades before World War I. The basic idea of that system was simple: put measured representatives of the left and right centers together against extremes, especially from the left.”

This approach entailed reaching out for support into “sectors and firms that have rarely supported any Democrat,” making the Clinton campaign look “like no other Democratic campaign since the New Deal,” but with a “strong resemblance to the profile of the Romney campaign in 2012.” In a populist political climate where many Americans believed that the country was headed in the wrong direction and needed dramatic change, this was a losing strategy.

If we were to presume based on these miscalculations that the Democratic National Committee and the mainstream media punditry learned a valuable lesson, we would presume wrongly. Rather than question the utility of the Median Voter Theorem they’ve spent the past three years entertaining conspiracy theories about Russian meddling and collusion. As the 2020 race unfolds, they’re trotting out the Median Voter Theorem again, insisting that popular proposals like Medicare-for-All, the Green New Deal, and college tuition reform are–as in the case of ice cream with school children–too extreme. They insist, instead, that unseating Trump will require a median-voter-capturing status quo moderate like Joe Biden, Kamala Harris, or Pete Buttigieg, who offer uninspired and watered down versions of popular platforms. “Trasformismo 2.0” if you will.

Duopoly and the Vanishing Middle Class

In his book The Vanishing Middle Class: Prejudice and Power in a Dual Economy, Harvard University economist Peter Temin offers what ought to be an obvious observation concerning the assumptions behind the Median Voter Theorem. If winning policy proposals reflected where the majority of voter support lies, then issues important to the low-wage sector would dominate American politics. This, simply because more than half of the American electorate are from the low-wage sector. Of course, as is obvious to all of us, that’s not what happens. Quite the contrary, actually. Most Americans want to protect Social Security, they want to pursue economic policies that will result in higher wages, they want access to affordable education, and they want protection against the danger of bankruptcy resulting from medical debt. Public support for these issues is consistently high even among Republican voters. And yet we don’t even get an opportunity to vote on them in any meaningful way.

What this reveals (among other things) is that the Median Voter Theorem, which treats the electorate as a monolith, fails to recognize that the middle class in America is (to use Peter Temin’s language) “vanishing”, and that we effectively live in a duopoly. Temin isn’t speaking in the more dramatic Occupy Wall Street framework of the 1% versus 99%. Rather, much like the French economist Thomas Piketty he speaks more in terms of an elite 10% versus the bottom 90%. As the middle class vanishes, Temin argues, the population is increasingly polarized into a dual economy.

At the top end of this dual economy sits an elite FTE sector (people who work in Finance, Technology, and Electronics). These are people who work on Wall Street, for instance, in banking, lending, insurance, and real estate, and for Silicon Valley tech firms. They’re the winners in the global neoliberal economy even if most of them are not exactly part of the billionaire set. The bottom end of the dual economy, which now constitutes most Americans, is what Temin describes as the low-wage sector. These are the working poor and those (like many teachers for instance) who have fallen out of the middle class. I assume I don’t even have to ask you to guess which sector’s issues and concerns receive the most political representation in our “democracy”. I don’t have to ask you to guess which sector owns and controls the mainstream media, or Google, or Facebook. Similarly I assume it’s obvious which sector these industries target their ad revenue-funded messaging to.

In his 2008 book Unequal Democracy: The Political Economy of the New Gilded Age, political scientist Larry Bartels analyzed Senate roll-calls on bills related to minimum wage, civil rights, budget waiver, and cloture. He discovered that Senators attached no weight at all to the political concerns of constituents from the bottom ⅓ of the income distribution, and only slightly more weight to middle-income constituents. It seems highly unlikely–on the presumption that we live in a democracy–that United States Senators would consider it politically viable to ignore the concerns of ⅔ of their constituency. And yet that’s what the data reveals. As Peter Temin notes, however, this is exactly what the Investment Theory of Political Parties would predict.

The Investment Theory of Political Parties

“The real market for political parties is defined by major investors, who generally have good and clear reason for investing to control the state,” explains political scientist Thomas Feguson. “Blocs of major investors define the core of political parties and are responsible for most of the signals the party sends to the electorate.’’ This is the basic thesis of the Investment Theory of Political Parties (the Investment Theory for short). Let’s unpack it a bit.

Whereas the Median Voter Theorem (the “median voter fantasy” in Ferguson’s words) hypothesizes that successful policy will align with where most of the voters are (the center of a spectrum it assumes), the Investment Theory instead hypothesizes that successful policy will align with where most of the investment dollars are. This is a slight oversimplification, but you get the idea. It’s an oversimplification because the Investment Theory doesn’t predict at the level of specific issues and policy proposals. Rather, as its name suggests, it predicts at the level of party success. Political parties and the party’s candidates don’t represent single issues. Rather, they represent clusters of issues. If those clusters of issues–or clusters of investments if you will–coalesce into a winning investment bloc, that translates into winning elections. Certain successful investment blocs can dominate for decades (i.e., the blocs can become hegemonic blocs).

This arrangement presents a few very significant implications, which the Investment Theory predicts. First, it means that “whole areas of public policy will not be contested at all even if they’re important to voters.” This, because as my opening quote from Ferguson suggests, the electorate is simply too poor to invest in these public policy issues.

Second, “[i]f major donors are aligned on a topic, there is no point in contesting.” Think of tax cuts for the rich, for instance. Think of deregulating the banking industry. Despite what conspiracy theory fans might want to suggest, this incontestability isn’t due to any sort of “active collusion between the parties,” Ferguson insists. Rather, it’s simply “because no effective constituency exits to force the issue onto the public agenda.” ‘Constituency’ in this context means investors (this is a marketplace), not voters. Voters, remember, most of whom are members of the low-wage sector, are simply not an “effective constituency.”

Third, Ferguson notes that “…on all issues affecting vital interests that major investors have in common, no party competition will take place.” This third point is important. It explains the bipartisan neoliberal consensus that has existed between the Democratic and Republican parties since the Reagan era. In her recent essay The Old is Dying and the New Cannot be Born critical theorist Nancy Frasier characterizes this bipartisan consensus as a Progressive Neoliberal hegemonic bloc–a hegemonic bloc that since the Great Recession has begun to fail.

Beginning with Reagan, the Republican party championed a Reactionary Neoliberalism which married reactionary culture war politics to retrograde neoliberal economic policy. Prayer in schools, anti-abortion, and traditional marriage were the stock in trade. Beginning with Bill Clinton, the Democrats championed a Progressive Neoliberalism (which won the day and became the dominant hegemonic bloc), which married progressive culture war politics with retrograde neoliberal economic policy. Women’s rights, racial justice, gay marriage, and LTBTQ+ rights were the stock in trade. These social-cultural issues, as we all well know, are so polarizing that the United States often seems poised on the verge of civil war.

And yet despite this fact the Democratic and Republican parties have long been in consensus on the neoliberal economic part. Since this represents a vital consensus among major investors, the Investment Theory predicts that there will be no party competition on neoliberal economic policy. The parties have been simpatico on policy issues related to neoliberal economics for decades, and perspectives that might challenge free trade agreements, austerity measures, financial deregulation, and divestment from social programs simply aren’t on offer in the ‘market’.

In 1995 Ferguson had already prefigured Fraser’s conclusions nearly 25 years later. “[I]f an emphasis on non-economic issues protects major investors in all parties,” Ferguson wrote, “then emphasis on ethnic, racial, or cultural values will proliferate relative to economic appeals.”

The Investment Theory and the Election Industry

There is nothing particularly sinister or conspiratorial about the way corporations and billionaires control the political system through financial investments. It is, rather, more of a structural consequence. Investing in politics in this sense is no different than any other business investment. Corporations respect the same bottom line and invest in anticipation of a good ROI. If you’re an investment bank or an oil company that could make a lot more money if certain sectors of your industry were deregulated, then it makes sense to invest in politicians and parties that will work to make that happen. And if this investment runs into the millions, yeilding a return in future billions, that’s a damn good investment. That’s how capitalism works, and when capitalism swallows the political sphere, that’s also how politics works. No hard feelings. As the line from The Godfather goes. “It was only business.”

Similarly, the success of the investment has little to do with outright buying votes, voter suppression, or other forms of election tampering. Rather, it depends on the power of advertising. And here our examination comes full circle.

In a basic cost-benefit analysis of becoming informed on various political issues, the cost for the average voter is incredibly high. To borrow an example from Peter Temin, low-wage sector voters want to understand why their wages have stagnated over the past 30 years, why, in short, they’ve been denied the American dream. Temin notes, “this is a complex problem with many parts.” It’s almost inconceivable that low-wage sector voters will have the time and resources to find the information to “put the picture together.” As Tom Furguson points out, “even highly motivated voters face comparatively enormous costs when they attempt to acquire, evaluate, and act upon political information.” Staying politically informed is very expensive in terms of time and effort–and expense few of us can afford. Consequently, Ferguson argues, “voters are only acting rationally when they cut information costs by using shortcuts like partisan identification or demographic facts to evaluate complex vectors of political variables.”

Voters rely on branding (i.e., party identification) and advertising to make political choices in more or less the same way that they rely on branding and advertising to make consumer choices. Unfortunately, however, in America there are only two brands (Republican and Democrat), and the information and solutions they advertise are limited to those that promote the interests of their major investors. Additional or alternative information to that which is advertised by the parties isn’t readily available, because no one–certainly not the electorate–can afford to advertise them in the marketplace. Finally, voters are forced to choose among a very small set of candidates, each of whom represents a specific bundle of political ‘solutions’ (again, reflecting the interests of major investment blocs) . These ‘solution bundles’ are highly curated, and the only ‘choices’ available to voters. If an issue they find particularly important isn’t part of the bundle? Well tough shit and fuck you. Nothing personal. It’s only business.

Afterword

I realize I’ve just painted a pretty grim picture as far as hopes for salvaging American democracy go. That said, the situation is not hopeless. In this essay my aim was simply to describe how the election industry works. In a piece to follow I’ll dive into what we might do about it if we care about democracy.

Following the 2016 presidential election, people seemed to be saying these words repetitively — “clearly, we’re living in dark times.” indarktimes.com

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