Wealth = Influence

In any discussion about money in politics, what’s most likely to come up as a concern is not that money leads to victory or that those in Congress spent most of their time and energy fundraising, but rather that all the funds going to a candidate are likely to have an impact on what laws they champion, support, and oppose when they’re in office, especially bigger sums of money from special interests.

One could pick on individual politicians and argue how much political donations have affected them personally, but the issue can be addressed more broadly.  The question of whether these donations by interested parties to Congress members has an impact on legislation was addressed by a 2014 study by Princeton professor Martin Gilens and Northwestern University professor Benjamin Page, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens.  They were interested in determining which of the following models best represent American politics and government:

1.)  Majoritarian Electoral Democracy: populist democracy, rule according to the will of the people

2.)  Economic-Elite Domination: civil oligarchy, rule by those with substantial economic resources

3.)  Majoritarian Pluralism: struggle between interest groups or factions, potential or otherwise, that is to the advantage of individuals

4.)  Biased Pluralism: struggle between interest groups or factions that is to the advantage of business interests and corporations

For those with an interest in democracy, number 1 is clearly desirable, though number 3 would also be acceptable in a representative democracy.  To answer this important question, Gilens and Page acquired the following data:

1.)  Survey responses from 1981 to 2002 containing 1,779 instances of public opinion surveys on proposed policy changes, broken down according to respondents’ income level.

2.)  A list of 43 industries and interest groups rated on their positions on those policy changes and sorted into either mass-public interest groups or business interest groups.

3.)  Hindsight on whether these changes were enacted within four years.

They used survey respondents at the ninetieth percentile as a stand-in for the very wealthy, dubbing them the “economic elites”, though they did point out that such individuals earned only about $150,000.  Regarding this, they cited another study that found that the opinions of the top 10% income earners correlated much better with those in the top 2%, the truly wealthy, than they did the average respondent, and noted that this proxy would likely result in an underestimate of influence by the true economic elites.

Using this data, they calculated correlations between the various groups (the average citizens, the economic elites, mass-public interest groups, and business interest groups), and between the opinions of these groups and what policies were implemented.  There conclusions were as follows:

“Since the preferences of ordinary citizens tend to be positively correlated with the preferences of economic elites, ordinary citizens often win the policies they want, even if they are more or less coincidental beneficiaries rather than causes of the victory.” (pgs 572-573)

“Because of the impediments to majority rule that were deliberately built into the U.S. political system—federalism, separation of powers, bicameralism—together with further impediments due to anti-majoritarian congressional rules and procedures, the system has a substantial status quo bias.  Thus when popular majorities favor the status quo, opposing a given policy change, they are likely to get their way; but when a majority—even a very large majority—of the public favors change, it is not likely to get what it wants.” (pg 573)

“Relatively few mass-based interest groups are active, they do not (in the aggregate) represent the public very well, and they have less collective impact on policy than do business-oriented groups—whose stands tend to be negatively related to the preferences of average citizens. These business groups are far more numerous and active; they spend much more money; and they tend to get their way.” (pg 575)

“When the preferences of economic elites and the stands of organized interest groups are controlled for, the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” (pg 575)

To summarize, the opinions of average citizens have very little effect on public policy, which is instead shaped by the wealthy and by interest groups, with those representing business being much more powerful than those that are supposed to but barely represent the people, and any gains made in favor of the average citizen are due to incidental alignment with those in higher income brackets.  All the while, the status quo is favored.  They also produced what has become a rather infamous set of graphs demonstrating all this:

The black lines show the changing predicted probability of legislation being adopted according to the percentage of individuals in a group in favor, or the net score of interest groups for and against for the bottom graph, when the preference of the other two groups is held at neutral (50% or 0), and the gray bars show the distribution of preferences across the 1,779 cases, which highlights the similarities between average citizens and the stand-in economic elites.