Monday, October 18, 2010

End Private Funding of Political Parties

Money talks in politics, so much so it tends to drown out all other voices. To say that it has an undue influence on electoral results is an understatement. For example, in more than nine times out of ten the candidate who spends the most money wins the seat in the US Congress. Similar trends exist in Canada.

It should be obvious that any political system that blatantly favors the interests of those with the economic means to make a significant financial contribution to a political party at the expense of the rest of the electorate will run into problems concerning its democratic legitimacy.

Essentially, the ever widening gap with regard to income inequality in North America can be attributed to the power of money to influence electoral results. In short, those who give generously, in effect, buy votes for the desired slate of candidates who in return adopt policies and intervene into the market on behalf of their favored donors. In other words, politics precedes policy formation.

In Canada, there has been significant evolution of electoral laws to limit the power of money has over elections. For instance, donations from corporations and unions to political parties are banned, limits are placed are third party spending during a federal election, and donations are limited to $1000 per donor.

Nevertheless, controversy over financing laws is considerable. For example, threats to end the federal subsidy for each vote cast almost caused the defeat of the Conservative government, which had to prorogue Parliament in order to avoid a non-confidence vote.

Likewise, in Quebec the refusal to hold a public enquiry into the link between the construction industry and the financing of Quebec's political parties, despite ample evidence suggesting that such an enquiry should be called, has led to a huge drop in the polls for the Quebec Liberal Party and in all likelihood will lead to the end of a Liberal government.

I believe that given the human propensity to pursue advantage whenever possible, most often at the expense of the common good, there are significant democratic dividends to be gained by eliminating the private funding of political parties altogether.

By leveling the playing field we would reduce significantly the political pandering to monied interests and increase the state's capacity to advance the common good. Indeed, as recent events leading up to the onset of the Great Recession demonstrate, it is guiding hand of government and not the invisible hand of the market that protects the material well-being of the population. As a result, fiscal policy should be determined by its effect on the real economy instead of adhering to the voodoo economic theories propagated by minions of the rich, their think tanks and in turn by the political parties which receive their support.

The minions of the rich, however, would have us believe that the ability of political parties to raise money not only demonstrates their democratic legitimacy but also their intrinsic worth. This is a self-serving political myth. Democracy is based on the principle of one person, one vote. We do not accept in principle at the level of society the notion of the super vote, which grants multiple votes per favored shareholder as a means of establishing and maintaining control over a company during the initial public offering of its shares. Government is not another instance of corporate rule.

Second, when the minions assert that the cost of exclusive public funding for political parties would be prohibitive, they are extremely selective in the cost benefit analysis. Let's not forget that donations to political parties are tax deductible. The amount the federal government forgoes in lost revenue to grant the tax deduction to donors dwarfs the amount which is given in the per vote subsidy.

As well, the cost of government doing business rises when it has to factor in the price of political patronage when conducting it's affairs. Granting government contracts without tender and selective interventions into the market that result in disproportionate gains for individuals that surpass the supposed benefits of the intervention are the two principle means that the practice of private funding for political parties extracts or extorts money from the public purse.

Indeed, the practice is maintained because of its exorbitant rate of return on the investment. Take the same amount used for political donations and subsequent lobbying efforts and try to obtain the same level of return in a truly completive market. Fat chance. So, instead of continuing the practice, let's conserve the resources we now have and be more socially effective and efficient in the use of the public purse.

A simple but effective proposal is to give all political parties that are able to meet a two percent threshold of the popular vote a lump sum to maintain basic operating requirements for a national party. Moreover, maintain the per vote subsidy, but increase the subsidy to give more incentive for people to actually cast their votes.

Voter apathy is widespread and threatens the vitality of our political institutions. Let's make it worthwhile for people to participate in the political process other than opening up their wallets in order to buy votes.


  1. I'm going to put this in very simple words:

    I, as a Canadian, have the right to donate to a political party if I so choose.

    It's as simple as that.

    I know I speak for a lot of Canadians when I say that individuals like yourself need to start advancing some political reform ideas that are designed to benefit all Canadians, as opposed to merely providing yourself with permanent political advantage.

  2. Hi Patrick, thanks for your comment.

    As far as I know the right to donate money to a political party is nowhere enshrined as a fundamental right. It is a option afforded to individuals stemming from statutory law and administrative practice, which, as we all know, is subject to change.

    In my opinion, regardless of where one is on the political spectrum, a quid pro quo patronage system is a very inefficient way of governing. So, let's take the quid pro quo out of the system altogether. In doing so, the playing field would becomes somewhat more level.


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