The investment theory of the 2012 elections

Thomas Ferguson is a political scientist whose writings changed the way I think about politics.  His “investment theory of political parties” is that candidates for office are like entrepreneurs, wealthy corporate interests are like venture capitalists who provide capital, and the voters are like customers being sold the product.

Ferguson says the public gets to decide who wins, but the “investors” get to decide who runs.  That’s why elected officials normally pay more attention to the people who finance them than the people who vote for them, and why politicians so often do the opposite of what they promise and what their constituents want.

Ferguson and two other scholars, Paul Jorgensen and Jie Chen, recently did a study of the 2012 election campaign which bears this out.  What was noteworthy, they wrote, is that the strong support Obama got from Silicon Valley companies.  Romney got more support from big business as a whole, but Obama got as much or more from the telecommunications, software, web manufacturing, electronics, computer and defense industries.

All these industries, as they point out, are deeply involved with the National Security Agency, as suppliers of technology, as sub-contractors and as aiders and abettors of surveillance.  The overseas businesses of Apple, Facebook, Google, Microsoft, Skype, YouTube and other companies have been gravely damaged by Edward Snowden’s disclosures of how they work with the NSA to spy on foreign governments, businesses and citizens.  No wonder Obama regards Snowden as Public Enemy No. 1.

But I think it is a mistake to focus only on surveillance and war technology aspects of Obama’s close ties with Silicon Valley.   Those ties were a main reason he turned his back on organized labor.  And one of the main provisions of the Trans Pacific Partnership agreement which the Obama administration is negotiating in secret is to put Silicon Valley’s intellectual property claims out of reach of domestic law.

Thomas Ferguson

Thomas Ferguson

One of the themes of Ferguson’s writings is to puncture the claim that only the Republicans are the party of big business and the Democrats are not.  There are real conflicts between the two parties, but most of them are conflicts within the business community itself, or conflicts on issues such as abortion or gay marriage which do not affect the distribution of wealth and power.

Mitt Romney got more money from big business in 2012 than either Barack Obama or Romney’s Republican opponents.  Wall Street still liked Obama, but it liked Romney better.  Obama and Romney’s right-wing opponents got substantial support from small contributors, which Romney did not.  But the study said that did not change the dynamics of the campaign.  Without funding from corporations and wealthy individuals, none of the campaigns could have survived.

The issue is not whether money from big business gives unfair advantage to Democrats, mainstream Republicans or Tea Party Republicans.  It is how money from big business influences policy outcomes.   Hardly any voters in either political party favored bailouts of Wall Street banks or immunity of powerful financiers from prosecution, but these are the policies that were followed.  Hardly any voters favor cutting back on Social Security or Medicare, but there is a strong possibility this will happen.  Ferguson’s investment theory provides an explanation of why this is.


Click on Party Competition and Industrial Structure in the 2012 Elections: What’s Really Driving the Taxi to the Dark Side? for the text of the working paper written by Thomas Ferguson, Paul Jorgensen and Jie Chen for the Roosevelt Institute.

Click on Who Buys the Spies? The Hidden Corporate Cash Behind America’s Out-of-Control National Surveillance State for a summary article by Ferguson, Jorgensen and Chen for AlterNet.

Click on The investment theory of politics for an earlier post of mine on Ferguson.

Tags: , , ,

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: