Friday, November 7, 2008

Corporate welfare

One aspect I didn't mention about the Meltzer/Richard problem and voters' awkward propensity to vote for the representatives of wealthy interests: campaign finance. Voters only get the chance to vote for redistribution if major parties are offering it. But in this post-mass party age, the best way for parties to run well-financed campaigns is to sollicit donations from well-heeled backers in exchange for policy favours. So, what was George Osborne (or for that matter Peter Mandelson) doing ont he Russian billionaires' yacht? Such a donor can make a decisive influence to a parties' resources, so the temptation to offer private favors (of course, at the collective expense in one way or another) to get the money is unbearable.
Obama presumably did some of this too, but he also mobilized large numbers of small contributions, decreasing his dependency on the rich. In the same way, the British Trade Unions' political levy used to provide Labour with money in exchange for delivering benefits to unions. Unions may be 'special interests' in a sense, but if they're representative enough they can come close to representing collective interests in some form.
However, Obama's strategy is probably not easy to sustain over time - what happens when the progressive base is disillusioned by all the concessions he will inevitably make?