Feb 25, 2022

Why Big Money Poses a Threat to Democracy

Written By: Saumya Jain

Under polarization, governmental institutions can lead to disproportionate influence for a certain subset of citizens. Donald Trump has increased polarization in recent years and demonstrated executive aggrandizement. Political scientist Nancy Bermeo defines the latter term as an elected executive weakening checks on their power. [1] In doing so, Trump has enabled wealthy individuals to take advantage of those now-weakened institutions. Earlier this month, Peter Thiel exemplified this. The billionaire tech investor cut ties with Meta to focus on endorsing far-right Republican candidates in the upcoming midterms. He attempts to attack the government’s system of checks and balances, using Trump as a vessel to further his ideologies.

Thiel’s ability to do this stems from the 2010 Citizens United vs. FEC case, in which the Court decided that super PACs can play in the political arena with minimal regulations. This decision overturned election spending restrictions, breaking a norm that previous courts upheld. Given the party affiliation of each justice’s nominating president, this outcome is not shocking. The Supreme Court was the most conservative it had been in almost a century, calling attention to the partisan polarization at the time. Billionaires such as Thiel have since been pouring unlimited funds into campaigns and drowning the desires of ordinary citizens, which has proven to be very dangerous. Using his money and publicity to do so, Thiel supports many of Trump’s anti-democratic values that challenge “codes of conduct” and “common knowledge.” [2]

The American political system relies on elections to keep government leaders in line with the people’s preferences. However, Thiel is helping Trump stir false claims about its legitimacy. As political scientists Ellen Lust and David Waldner argue, “undermining democratic elections removes a foundation of vertical accountability.” [3] Vertical accountability is how the public can keep political figures in check, and elections help do this. Trump has denied the 2020 election results, refusing to accept Biden’s “equal right to exist, compete for power, and govern.” [4] The protests on January 6th, 2021, showed the danger this message presents for democracy. Now that Thiel has returned as a critical financier of the MAGA movement, he is backing candidates who embrace the lie that Trump won the election. By encouraging this false notion, he attempts to invalidate what political theorist Robert Dahl saw as the crux of democracy: “free and fair elections.” [5]

Additionally, Thiel funds candidates who share his radical views on American politics: the establishment has failed, the current immigration policy is hurting Americans, and the government is deranged. By donating large amounts to their campaigns, he attempts to compose the Senate and the House with candidates whose views align with his. Should Trump win re-election, Thiel’s actions would help him act “in increasingly autocratic ways” with government institutions that support him. [6] This would let Thiel use Trump as a means to pursue his own ideologies. So far, Thiel has given over $20 million to support politicians such as Ted Cruz, Blake Masters, J.D. Vance, Michael Waltz, etc. But this is just the start. Not only is he trying to help elect pro-Trump candidates, but he is also trying to unseat the 10 Republicans (the “traitorous 10”) who voted to impeach Trump. By using his wealth to support or undermine specific candidates, Thiel indirectly influences horizontal accountability – the independent state agencies’ ability to keep each other in check. [7]

While private citizens’ donations to candidates through super PACs may seem dangerous to democracy, this isn’t wholly true. Super PACs have traits that also encourage democratic values. Research has shown that the increased political spending due to super PACs improves voter knowledge. These political ads are often a better source of information than news channels. Additionally, super PACs increase political competition. They tend to support challengers and better offset incumbents’ advantage.

During his presidency, Trump demonstrated democratic backsliding –  the steady decline in the quality of democracy through the institutions in place to protect it. [8] Political scientist Steven Levitsky argues that this “begins at the ballot box,” [9] which is where Thiel comes into play. By using his immense wealth to fill the Senate and House with candidates who believe that Trump won in 2020, he helps the former president spread doubt on the legitimacy of American elections. Peter Thiel is not unique in his ability to do this. He is just an extreme example of how, in times of democratic instability, wealthy private citizens can have great power and disproportionate influence. Trump’s presidency reduced the quality of the democratic institutions in the United States, thus allowing Thiel’s preferences to become over-represented by his ability to make large donations. Despite super PACs ability to increase engagement and information among the electorate, they present a slippery slope if they can reshape who gets elected and whether the elected individual is willing to subvert democracy. According to recent FEC campaign disclosures, both the Republican and Democratic national committees raised $400 million in 2021, but how can we ensure this money is not used to reach undemocratic ends?

[1] Bermeo, Nancy. “On Democratic Backsliding.” Journal of Democracy, 2016, 10.

[2] Levitsky, Steven, and Daniel Ziblatt. How Democracies Die. London: Crown Books, 2018, 128. 

[3] Waldner, David, and Lust, Ellen. “Unwelcome Change: Understanding, Evaluating, and Extending Theories of Democratic Backsliding.” USAID, 2015, 3.

[4] Levitsky, Steven, and Daniel Ziblatt. How Democracies Die. London: Crown Books, 2018, 129. 

[5] Dahl, Robert. A. Polyarchy: Participation and Opposition. Yale University Press, 1971, 1.

[6] Waldner, David, and Ellen Lust. “Unwelcome Change: Understanding, Evaluating, and Extending Theories of Democratic Backsliding.” USAID, 2015, 15.

[7] Waldner, David, and Ellen Lust. “Unwelcome Change: Understanding, Evaluating, and Extending Theories of Democratic Backsliding.” USAID, 2015, 65.

[8] Bermeo, Nancy. “On Democratic Backsliding.” Journal of Democracy, 2016, 6.

[9] Levitsky, Steven, and Daniel Ziblatt. How Democracies Die. London: Crown Books, 2018, 13.

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2 Comments

  1. Robin C

    In their blog, Saumya Jain argues about the threat of “Big Money” to democracy. They argue that polarization allows certain citizens to have a greater influence on democracy than others, ultimately, undermining the fundamentals of democracy. The author demonstrates this using billionaire Peter Thiel as an example. I am in full agreeance of the points brought up and would like to take the time to expand on the points and further ground the concepts in theory.

    The 2010 Citizens United vs FEC case, allowing political action committee organizations to participate in politics, also diminished the spending restrictions. Arguably, the combination of these factors weakens political parties as they increase vulnerability to money as well as outsider’s rhetoric. Levitsky and Ziblatt argue that political parties and democratic norms are guardrails for democracy [1]. The democratic norms are mutual tolerance and institutional forbearance. Mutual tolerance refers to the concept that opposing parties respect each other and agree that they will be playing by constitutional rules – agreeing to disagreeing. Meanwhile, institutional forbearance means that politicians will act in a patient and self-controlled manner without exercising technically legal rights which undermine democracy. This idea is also rooted in Robert Dahl’s theories which strongly emphasize the fact that competition is a necessary condition for democracy [2]. They also borrow from Schmitter and Karl who argue that democracy functions only if there is “contingent consent” of politicians acting under “conditions of bounded uncertainty” [3]. In democracy there will always be a party that wins and, therefore, a party that loses, contingent consent gives the winning party the right to enact policy. Bounded uncertainty is the idea that in a democracy with elections, the winning party can be voted out of power, therefore, one shouldn’t abuse executive power based on the fact that they can lose it. All these political scientists came to a conclusion that for democracy to work, there must be respect and professionality between party interactions.

    The author also mentions how the Republican party is increasingly moving farther right which is driving the polarization between the left and the right. One of the explanations as to why it is shifting farther right is because of the Koch Network as argued by Skocpol [4]. She also argues that Republican politicians are moving farther away from the popular preferences and the average voter. She presents the example of taxes: the average American prefers higher taxes on the rich, however, Republicans are universally pushing for higher tax cuts for higher brackets. Skocpol explains this shift from the central, average voter using the Koch brothers, who after 2010 Citizens United case, instead of endorsing specific candidates, they encourage politicians to spread their agenda. One important organization in the Koch network is Americans for Prosperity (AFP), which over the years has been acting in a parallel manner to the Republican Party and provide them with leverage within the party [5]. In her study, Skocpol also found that “many AFP state directors held earlier positions in (the) GOP” and that around a third “of state directors moved on immediately or later to positions in GOP campaigns or staffs.” [6]. This flow of members between the AFP and GOP is how the Koch brothers spread their agenda and gain leverage in the political world, considering these politicians would hold similar values to their own.

    Throughout their blog, the author discusses the concepts of polarization between the parties and the radicalization of the Republican Party. These are serious threats to the quality and functioning of democracy according to Ziblatt [7]. He believes that the presence of a highly professional center-right party is an important condition for the stability and functionality of democracy. This is because of the fact that center-right parties want gradual and incremental change. During a crises, the center-right party is put under threat because they are vulnerable to make what Levitsky and Ziblatt referred to as “fateful alliance” [8]. Even though they refer to examples in Europe and South America, the concept can be applied to the United States as well. The fateful alliance begins with an outsider gaining popularity due to a crises, which means a loss of popularity with the center-right party. This leads the center-right party to form an alliance with the outsider by including them in the party and legitimizing them. This happened with Donald Trump in the 2016 Election, who gained popularity and mobilized citizens during the primaries. The Republican Party realized this, therefore, supported him. This greed for power within the parties is ultimately a severe threat to democracy because it undermines the political norms of mutual tolerance and forbearance. If a party is greedy for power, they are more likely to take undemocratic measures and delegitimize their opponents to secure that power.

    [1] Levitsky, Steven, and Daniel Ziblatt. How Democracies Die. London: Crown Books, 2018
    [2] Dahl, Robert. Polyarchy: Participation and Opposition. Yale University Press, 1972.
    [3] Schmitter and Karl. “What Democracy Is… And Is Not.” Journal of Democracy, 1991.
    [4] Skocpol, Theda, and Hertel-Fernandez, Alexander. “The Koch Network and Republican Party Extremism.” Perspectives on Politics, 2016.
    [5] Skocpol, Theda, and Hertel-Fernandez, Alexander. “The Koch Network and Republican Party Extremism.” Perspectives on Politics, 2016.
    [6] Skocpol, Theda, and Hertel-Fernandez, Alexander. “The Koch Network and Republican Party Extremism.” Perspectives on Politics, 2016.
    [7] Ziblatt, Daniel. Conservative Parties and The Birth of Democracy. Cambridge University Press, 2017.
    [8] Levitsky, Steven, and Daniel Ziblatt. How Democracies Die. London: Crown Books, 2018.

  2. Tiffany R

    The “American Dream” projects the ideal that life in the United States grants opportunity for success and prosperity under the protection of democracy, however this dream is threatened in the presence of economically prosperous, anti-democratic figures. I agree with Saumya Jain that economic elites endanger the integrity of a democracy due to their advantageous ability to manipulate policy-making as well as the electoral process.
    Donald Trump and Peter Thiel perfectly exemplify the potential of the mutualistic relationship between a billionaire and a populist leader in amplifying their shared ideologies. In “What is Populism?” by Jan-Werner Müller, the author identifies that although it may be difficult to diagnose, populism can be identified through a framework of analysis. One dimension of analysis includes the refusal of a populist to recognize their opponent as legitimate. Another dimension is that populist leaders weaken the rule of law and change the electoral process in order to disfavor and disassemble liberal institutions. Jain points out how Trump and Thiel display both of these qualities by using Thiel’s wealth to back candidates who share their radical beliefs, such as how the pair sought candidates who supported the notion that the 2020 election contained foul-play. Populists often attempt to fill the House and Senate with individuals who will magnify their beliefs at the federal level. The spread of propaganda promotes dissatisfaction and distrust in the legitimacy of elections among the masses, making citizens more open to anti-democratic means of governance.
    One may dispute Jain’s argument of disproportionate influence by saying that America is known for its democratic values, therefore everybody’s voice is equally represented. Combating this claim, “Economic Inequality and Democratic Political Engagement” by Frederick Solt analyzed the relation of economic inequality and income with political engagement, the foundation of democracy. The findings of the study held consistent with the claim of the relative power theory: inequality has a negative effect on political engagement. The study also showed that the negative effect of inequality was lessened with increased income. The above studies support Jain’s assertion that the concentration of wealth in America has proven to be harmful to democracy because it places the power of electoral persuasion in the hands of a select few citizens. A democracy is supposed to be representative of the population of a whole, but with the intercession of elites, the voices of the majority are silenced.
    Solt concludes that the decreased political discussion, political interest, and electoral participation due to growing economic inequality should encourage the government to increase redistribution. The American government’s lack of sufficient responsive action is of concern to the strength of a democracy because political equality is undermined by economic inequality. A democracy is not a democracy without political equality. A main factor in the hesitation of redistribution is that elite’s generally do not favor economic redistribution. Research done by Martin Gilens and Benjamin I. Page in “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens” shows that our system favors the wants of interest groups which do not represent the average citizen’s preferences. The majority was shown to have little to no influence on the policy making process. Therefore, if the majority desires redistributive policies and elites oppose it, redistribution will not take place. Gilens and Page’s research coincides with that of Solt in the sense that when citizens feel as though their voices are not being heard, they cease political efforts altogether due to learned helplessness. Not only does this surrender further monopolize political power among elites, but it creates a resentment of elites among common citizens, furthering another symptom of democratic erosion in a country: polarization.
    One may argue that elites are just in their decision to not support redistribution because they have earned their assets. Favoring redistribution is often seen as selfishly motivated in people who desire more wealth without having to work for it, but the previously mentioned studies among others show that the enforcement of redistributive policies would benefit the country as a whole by reversing indications of democratic erosion. Distributing wealth would decrease the polarization caused by the unfair advantage elites hold in the coercion of politics. It would also empower citizens to participate in politics, balancing the checks of power on elites and populist leaders who often succeed in their routine attempts to manipulate the current government system in efforts of disassembling democracy altogether.

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