7

Are America’s Aberrations a Danger for Europe?

FRANCE SHOOK for a few moments in 2016, responding to the Trump tsunami on the other side of the Atlantic. Coming as it did after the Brexit vote, was it another harbinger that the Front National would be in power before long? The elections of 2017 soon reassured French people and allowed them to go about their business again, perhaps a touch chauvinistic in their prompt insistence that France was decidedly not America. The wave of populism threatening to engulf the world had come up against the solid, stubborn wall of Gallic intelligence. Ah, nothing like a bit of good old nationalism!

In the United States, it’s obvious, the weight of money and lobbies has corrupted the democratic process; few know that it has a system of public funding of democracy (the Presidential Election Campaign Fund), or that this has been cut adrift by private funding—and by a real disenchantment with political parties. In the United States, of course, but in France and the rest of the world? We have just seen that Italy is the country that has gone farthest in challenging the public funding of democracy. But the Canadian Conservatives’ dismantling of the tri-monthly public allocation of funds to political parties goes in the same direction. And in France today, the three main political forces present themselves as anti-parties: La République en Marche constantly explains that it pits itself against “yesterday’s world”; La France Insoumise declares on its website that it does not have “the structures of traditional political parties”; and the Front National has always refused to place itself on the right-left axis or to compare itself to other parties. Cause or consequence of the denigration of parties?

Fewer than 10 percent of French people today have confidence in political parties new or old. It is only one step for most of them to reject any further funding of parties with their tax money, especially as recent scandals involving parliamentary assistants and campaign expenses (whether suspected under-invoicing by Olivier Ginon’s GL Events corporation during Emmanuel Macron’s presidential campaign, or suspected over-invoicing by Mediascop during Jean-Luc Mélenchon’s campaign) have helped to fuel distrust of politicians as serial misusers of public funds. That further step could one day be taken with no real awareness of what is happening, in a sudden lurch into a world where private money is king. For what we have seen in previous chapters is that democracy involves some costs (the running of parties and election expenses) and that, if public subsidies do not adequately cover those costs, generous private donations from a privileged minority will take over and fuel the electoral machine, creating a major danger of corruption and capture.

In France in 2017, many thought that the unexpected election of the young president Emmanuel Macron would end the populist wave and signal the beginning of the renewal of Western democracies. How do things look a couple of years later? The first point to make is that the French electorate has never been so divided in its perceptions of a president. All the opinion polls tell us that he is greatly appreciated by the richest and most educated strata, but massively rejected by the poorest and those with the least formal education. This is only a reflection of the economic policy he pursued during the first months of his five-year term. It was a policy of tax breaks for the well-off, that is, for those who funded his campaign and must not be allowed to regret it. As for all the rest, they were supposed to make do with a personal housing allowance worth five euros less a month.

What is so frightening is that the present balance in America could become the new normality. Do we not already see signs of this in Germany? The purpose of this chapter is not to stop readers from sleeping at night, but to open their eyes to the yawning precipice before us and to show how we have come to this pass. Then we might take the necessary steps so that we do not have to deplore the growing influence of private interests, and so that we feel happy at having again made the idea of representativity a full and living reality. Perhaps, on reaching the end of this book, readers will no longer be able to conceal a hopeful smile at the thought that solutions exist, and that these are neither particularly costly nor particularly difficult to implement.

We shall analyze the anti-egalitarian drift in the American system and the dangers presently weighing on Germany and the rest of Europe. The point is not to present a litany of complaints, but to map out the necessary stages on the road to solutions: Democratic Equality Vouchers, a complete remake of the public funding of democracy, and a new mixed assembly that introduces social representation as a component part of the national parliament, bringing its membership and its decisions more into line with the social-economic reality.

Decades of Deregulating Political Democracy

Private money has not always had the upper hand in American political life. If we speak today of the “new gilded age,” alluding to the exponential growth of economic and political inequalities on the other side of the Atlantic, it is because an earlier “gilded age”—from the end of the Civil War to the early twentieth century, marked by unprecedented economic growth and a culture of rampant corruption—gave way for a few decades to a progressive and more egalitarian era. According to the history books, that Progressive Era came to an end with the crisis of 1929. But it continued in the 1930s with Franklin Roosevelt’s New Deal, and, in respect of the regulation of the democratic process, I would be tempted to prolong it until the mid-1970s.

I have already mentioned Theodore Roosevelt’s hopes and his early ambitions to bring about political reform. I have also noted the scale of the system established between 1971 and 1974, right at the end of the period and probably too late to bear its fruits. It was a system partly inspired by initiatives in a number of other countries. One might say “Bravo!”—except that the expression “the beginning of the end” has never been as meaningful as it is in the American case. No sooner was it introduced than it was dismantled: that is the story of the publicly regulated funding of political life in the United States. The Supreme Court plays the grim reaper here: for a long time it opposed the imposition at the federal level of income taxes and a minimum wage; and it has constantly upheld the idea that money and expression are one and the same thing, thereby undermining public regulation of the private funding of democracy.¹

Money: A Most Peculiar Conception of Free Speech

The US Supreme Court began its gradual demolition of the rules of private funding in 1976, with its judgment in the famous Buckley v. Valeo case.² This declared unconstitutional the ceiling on candidates’ contributions to their own campaigns. What were the consequences? Long before the days of Trump, it allowed the billionaire David Koch to spend more than $2 million during the 1980 presidential campaign, simply by running for vice-president on the Libertarian Party ticket. As a candidate, he was able to spend as much as he liked. As an ordinary citizen, he would have been constrained by the official ceiling on individual campaign donations.

But the Supreme Court did not stop there. In the same judgment, while it upheld the limits on individual contributions to a candidate or party, it ruled as unconstitutional any ceiling on “independent” spending; in other words, so long as an individual or group did not directly run in an election, and so long as it was not acting in coordination with a candidate but simply wished to support or oppose him, it was free to spend as much as it liked. Only corporations and unions were not permitted to do this in 1976. Private individuals were therefore restricted in the size of their direct donations to a candidate: “hard money” was capped but not campaign expenses; “soft money” had its limits removed. Why? Because the US Supreme Court used a highly restrictive definition of corruption as involving a quid pro quo, “something for something else.” In other words, when a citizen contributed directly to a candidate’s campaign (by donating something), there was a risk of corruption since something would be expected in return. But that risk did not exist—according to the Supreme Court—if the citizen spent money directly to express her preferences. In that case, since the candidate did not receive anything, she could not give anything in return. It was just a form of self-expression for the citizen who spent the money.

I would like to emphasize this point, as the distinction seems far from self-evident to anyone who is not an American citizen. In the United States, I may campaign independently for the candidate of my choice; so, if I am a fan of Michelle Obama and I want to see her win the Democratic primary in 2020, nothing stops me from paying for my own TV ads in support of the candidate, although the degree of tolerance may vary if the messages become too explicit (“Vote for Michelle!”). On the other hand, the size of the contributions I can make to Michelle Obama’s campaign—let’s say “Michelle for America”—is strictly limited, since in the case of such direct contributions there may be a suspicion of corruption, but certainly not in the case of indirect contributions. The Supreme Court reaffirmed this position in 2012 with its “Citizens United” decision (to which we shall return): “When Buckley identified a sufficiently important governmental interest in preventing corruption or the appearance of corruption, that interest was limited to quid pro quo corruption.” However, the Court ruled, independent spending—that is, independent of the candidates and their campaigns—is nothing other than a form of political expression; it cannot, therefore, cause either corruption or the appearance of corruption. In France, by contrast, only political parties or groups are permitted to receive donations or to engage in electoral spending—a restriction that may appear onerous but is essential to the effective control of campaign funding.³

Lastly, the Supreme Court abolished limits on total campaign expenditure as early as 1976, with the result that today it may be necessary to spend more than a billion dollars to become president of the United States. Who wants to try their luck?

It is interesting to examine the Supreme Court’s arguments for killing off the regulation of private electoral funding. Everything was done in the name of the sacrosanct freedom of speech, and information.⁴ The basic reasoning is quite simple—which is not to say that it is not wide open to criticism. The first point: in a democracy, citizens should be able to make informed choices (no quarrel about that), and so the First Amendment, which guarantees free speech, is central to the conduct of election campaigns. Each candidate must be able to convince people of the merits of her ideas, the virtues of her candidacy, and so on. I imagine you agree with that, too. But what role does money play in all this? The ability to defend your ideas, and more generally to wage a campaign, comes at a high price—one that has been climbing higher and higher in the modern world. (In the 1970s, the Supreme Court had in mind the cost of radio and television advertising, but also of publicity pages in the press; today, we would also think of the costs associated with online campaigns.⁵) Therefore, the Court argued, a ceiling on the spending of candidates effectively limits their freedom of speech; for money helps them to express their ideas—and is even an indispensable requirement. This brings us to the second point: a limit on election spending is tantamount to a limit on public debate, whereas debate should be, in the Supreme Court’s words, “uninhibited, robust, and wide open.” This is where we begin to disagree. For how can a debate be “wide open” if some, but not others, can spend money on it without having to think twice? The openness is clear for the wealthiest candidates, but the smaller fry are in danger of being trapped in the scrum.

Since 2010, moreover, the scrum has had two props. Individuals are permitted to spend what they like as long as they do not give money directly to a candidate; and corporations are permitted to do the same, being considered as “individuals” whose freedom of speech is protected by the First Amendment.

When Corporations Become Individuals, Protected by the First Amendment and Unrestricted in Their Election Spending

And to think that it all began with a film: Hillary: The Movie—or rather, Hillary: The Movie, Season 1, since we need to think back to 2008, when the former First Lady made her first bid to become the first female president of the United States. It was a movie with a charge, produced and distributed by the unforgettable conservative group Citizens United. When watching the film (which I do not advise), you might be tempted to rename it Hilarious the Movie, so poor is the argument and so third-rate the direction. You start to shake when you are told that Hillary probably comes closest to a “European socialist,” without a knife between her teeth (because the special effects budget was limited).

But you laugh less when you learn of the consequences that this 90-minute documentary had for American political life, opening the way as it did for the unrestricted corporate funding of election campaigns. A little backward tracking shot.

Since 1907 and the Tillman Act, US law has prohibited direct corporate contributions to election campaigns. It is an important piece of legislation, but it is also worth mentioning that for a long time its restrictive effects were rather minor. Throughout the twentieth century, what corporations were not entitled to do was draw directly on their resources to finance election campaigns. But it was quite permissible for them to campaign through a political action committee—even without creating a political action committee of their own. No doubt this was already too complicated for Citizens United, the conservative association that made such a song and dance about it all. What has this to do with Hillary, the movie?

Not content with having produced this documentary, Citizens United decided in 2008 that it would pay the Comcast cable operator $1 million to distribute it free to its subscribers—and that it would pay the million dollars straight out of its cash funds, thereby contravening the regulations in place. (Citizens United did this despite the fact that it had a political action committee of its own, which it could perfectly well have used for the purpose.⁶) The aim, then, really was to test out the “Justices,” the not-so-young judges appointed for life, whose previous rulings led Citizens United activists to believe that they had never been closer to hitting the nail on the head. And in fact, in its ruling in the Citizens United v. the Federal Election Commission case, the Supreme Court did declare unconstitutional all the bans then in place, thereby conferring on corporations the status of “individuals,” which allowed them, with the protection of the First Amendment, to spend as much as they liked. To put it in another way: according to US constitutional and case law, corporations are today individuals who, as individuals, must be able to express their opinions freely; they may therefore spend their money as they see fit during election campaigns, since money is a form of speech.⁷ On this new, baroque conception of corporations as people, I would recommend Adam Winkler’s excellent book We the Corporations, which relates how corporations in the United States finally won their civil rights.⁸

The only restriction allowed by the Supreme Court was that corporate spending must remain “independent.”⁹ As we have seen, however, this completely artificial distinction between “hard money” and “soft money” is in no way an obstacle to the tide of private money washing over the American electoral process. Little known in Europe, this ruling from 2010 transformed the terms of the debate and forces us today to rethink everything.

To finish off the already shaky semblance of regulation still standing in the 2010s, a Supreme Court decision of 2014 in the McCutcheon v. Federal Election Commission case dismantled the federal limits on two-year aggregated campaign contributions. (The cap on contributions to each candidate remains unchanged, but for how much longer?) Thus, since 1990, the combined total spending of candidates in the three major US elections (presidential, congressional, and senatorial) has been continually increasing (Figure 55). In 2008, the year that saw the election of Barack Obama (the first to refuse public subsidies so that he could spend beyond its limits), the expenditure of candidates alone, leaving aside independent spending by PACs, came within an inch of the threshold of 1.4 billion euros¹⁰ (or 4.78 euros per adult American). Even more striking for this period—and largely reflecting the result of the above Supreme Court decisions—is the evolution of spending by PACs, which shot up from 500 million euros per two-year electoral cycle in 1990–1992 to more than 3 billion euros in 2016–2017. All in all, in 2016–2017, more than 11.50 euros per American adult went each year on election spending—with the results that we know.

Figure 55. Campaign expenses of all national election candidates (presidential, congressional, and senatorial), United States, 1990–2016

In 2008, the total campaign expenses of all candidates in the presidential election (primaries and general election) amounted to 1.36 billion euros.

Democratic Rebounds

In this downward spiral of American political democracy, in which both Democrats and Republicans now seem inclined to sign Faustian pacts with the devil, the movement has not always been uninterrupted. The early twenty-first century, particularly after the scandal that engulfed Enron (which for years made extremely high donations to election campaigns),11 witnessed a democratic rebound all the more interesting for its bipartisan nature in a context polarized along party lines. The Bipartisan Campaign Reform Act (or McCain-Feingold Act) of 2002 restricted the use that political parties could make of “soft money,” especially for “issue ads.” It also put an end to a certain hypocrisy that had been present until then, by stating that corporate TV or radio ads in a pre-election period should be considered “normal” campaign publicity even if they did not clearly say “Vote for X” or “Vote against X.” This entailed that such publicity could not be paid for directly out of corporate funds—which was not at all to the liking of Citizens United. When we reread the text of this act today, it seems like nothing more than common sense. And yet, such meager provisions survived only for a few years against the constant pounding they received from day one. We see how important the Supreme Court nominations were under the Reagan, Bush Sr., and Bush Jr. administrations, and how important it is to limit and regulate the power of judges in France and Europe.

In the United States, then, money really does seem to have swept the board, at least for a time. The Citizens United ruling paved the way for unlimited corporate funding of election campaigns. As far as individuals are concerned, even transparency is no longer a requirement: super PACs and other associations that do not disclose the identity of their donors—from the 501(c)(4) through “donor-advised funds” to the 501(c)(6)—can spend to their heart’s content, and away from the public gaze.

Should we surrender to the Mercers, Kochs, Bloombergs, Simons, and other billionaires of this world, who may be media magnates and are always rich donors? What is needed today is for citizens to mount a real democratic counterattack. Who would have said, just a few years ago, that more than a million Americans would demonstrate in favor of tighter gun controls? Everything encourages me to think that a million or more would mobilize to demand restrictions on corporate and individual contributions to election campaigns. Such a level of popular support will be essential to bring about change. Today, in the face of lobbyists and the Supreme Court—and of contradictions that mean a cap on donations can go against their own short-term interests—lawmakers often seem alone and isolated. But perhaps tomorrow, with the support of hundreds of thousands of Americans, enough energy can be gathered to make things happen.¹²

Why would Americans mobilize in the thousands, or even millions? The simple answer is that it is in their interest. The consequences of decades of deregulation are painfully obvious: American politics caters to the preferences of the rich. Unless public opinion really shakes politicians up, they are most unlikely to move. The answer to the evident lack of representation is certainly not mass abstention. Nor is it the Tea Party—what a paradox that an outfit that, more than any other, lives off handouts from conservative plutocrats (the same ones who fight for ever greater deregulation of the economy and pay ever less in taxes) should serve as a receptacle for the frustration of unrepresented low-income citizens! The solution, rather, is greater regulation. And if that requires a change in the Constitution, then so be it. One way or another, there is an urgent need to uncouple free speech from the private funding of elections.

Let me insert here a short parenthesis on supreme courts and other constitutional councils.¹³ As the American case clearly shows, these supposedly independent bodies have in many cases become real democratic anomalies; their members are accountable to no one and make or unmake laws in accordance with thoroughly personal interpretations of the Constitution.¹⁴ On the one hand, you have elected representatives who, though far from perfect, derive their democratic legitimacy from the ballot box and theoretically enact laws representing the preferences of the majority. On the other hand, there are the judges, sometimes appointed for life (as in the United States, which in this respect has curiously chosen to follow the papacy in fashioning its democracy) and cheerfully presented as neutral experts above any political considerations. But there is nothing more political in today’s France than the Constitutional Council; it may not have launched into the thorny issue of the funding of political democracy, but it displays a stunning activism in fiscal matters. Progressive social security contributions levied on all types of income? Out of the question. Relief on employees’ contributions for low earners? Out of the question. Fiscal transparency for the multinationals? Out of the question. A “Google tax”? Out of the question. And what about the proposal to abolish the solidarity tax on wealth (ISF)—or rather, to change it into a tax on real estate (which comes to the same thing), involving a breach of equal treatment between different categories of wealth? Well, then its positive judgment shoots straight through, since the public interest is all that matters to our dear judges. The fiscal decisions of the Constitutional Council are in reality political and ideological decisions, which testify to a conservatism mostly without any basis in the Constitution, and which the judges try to pass off as the result of purely legal reasoning.

This is not peculiar to France. The Constitutional Court in Germany is just as egregiously conservative in its rulings on fiscal matters. In 1995, for example, it deemed any direct tax above 50 percent to be unconstitutional,¹⁵ whereas the highest income tax rate in the United States and the United Kingdom had been above 80 percent for decades without infringing the rule of law and democratic principles—on the contrary. Was the decision purely legal? The neutral Paul Kirchhof—the irreproachable jurist who delivered the Court’s decision—appeared again in 2005 to propose a flat tax of 25 percent on the highest incomes, at a time when he was being tipped to become Angela Merkel’s finance minister. The flat tax corresponds to a quite peculiar vision of fiscal equality, which some prefer to disguise as a legal principle because they could never persuade voters to support it in a democratic debate. In the end, Merkel lost some votes because of Kirchhof and thought it wiser to dispense with his services. He was obviously better equipped to assert his views in the arcane world of constitutional courts and convoluted legal squabbles than on the terrain of political democracy.

I am not saying it is wrong to uphold the principle of tax equality. Indeed, it is essential to defend it, as the yardstick by which the constitutionality of our laws should always be measured. But today it is also essential to transform the Constitutional Council in France (or its counterparts in other countries) and to limit the scope of its arbitrary powers. Many ideas have already been floated in this direction. Dominique Rousseau, for instance, proposed that the Constitutional Council should be converted into a Constitutional Court, with the power to verify constitutionality only a posteriori.¹⁶ More fundamentally, he supports a reform in the way in which its members are appointed, so that this would take place in accordance with two criteria: legal competence and parliamentary confirmation.¹⁷

Politics in the Service of the Superrich

Why should we be worried about the deregulation of political democracy in the United States during the last few decades? One reason, of course, is the frenzied campaign spending, which has reached levels of indecency reminiscent of football transfers in Europe. Who dares to mention the exact figures anymore? They leave us dumbfounded, as if, past a certain number of zeroes, they lose all meaning. But even more frightening is the fact that the preferences of the rich and superrich are more clearly reflected than those of low-income groups in the course of government policies. The minority outweighs the majority by far in today’s United States.

Democracy by Coincidence

Wealth buys influence. One might have suspected as much, but on reading Martin Gilens’s fascinating books, especially Affluence and Influence, all you can do is exclaim: “Have things gone that far?” For what Gilens shows—on the basis of survey results over several decades—is that, when the (economic, political, or social) preferences of the rich and the poor diverge, there is no longer any connection between government decisions and whether or not the poorest sections of society oppose them.¹⁸ In other words, even if 90 percent of Americans among the “bottom 50 percent” want the minimum wage to be increased at the federal level, it is enough that the “top 1 percent” oppose it for such a measure to stand no chance of adoption. The bottom line is that, while the minimum wage has stood still since the election of Ronald Reagan—apart from a few ad hoc adjustments under Clinton and Obama—its purchasing power has declined by more than a third since the 1970s. And what goes for the poor also goes for the middle classes, who have been steadily losing out to the richest groups in society. So, whether it is a question of higher taxes on millionaires and billionaires or an increase in the minimum wage, the support expressed by the lower and middle classes counts for nothing: the superrich have only to deem them unsuitable in modern times for them to drop off the political agenda. And what applies to economic and fiscal policy also holds for cultural, social, international, and other policies—in short, for all the fields of government action.

This is not to say that most of the policies implemented by governments do not correspond to the preferences of the majority of citizens; if that were the case, a revolution might be in the cards. De facto, policy decisions are often in line with public opinion, but that is only because, in general, the preferences of the richest sections of society coincide with those of the rest of population. It is not because the poorest want x or y that politicians decide to give them x or y; the only, or the main, reason why they do so is that the superrich want the same. The legalization of abortion and the US intervention in Iraq, for example, were two policies that met the preferences of both the poorest and the richest groups in society. Martin Gilens and Benjamin Page describe this as “democracy by coincidence.” Should we be satisfied with it?

As Gilens and Page emphasize, the problem with democracy by coincidence is that fortunate coincidences can very quickly turn into an unfortunate tyranny. And even if it does not come to tyranny, can we really speak of democracy? In a way, we are coming back to the question of philanthropy: a handful of billionaires who are more capable than the majority of deciding for the majority, no doubt because the radiance of the Money God illuminates their preferences.

But Why Do Citizens Vote against Their Own Interests? From Conflict over Values …

Instead of looking down on people who do not vote, we might try to understand them. Why go to the polls, after all, if democracy has already been captured? At least we can refuse to legitimize the electoral masquerade by casting our vote.

What is more difficult to grasp—for the researcher, but also the citizen, that I am—is why the representation deficit throws hundreds of thousands of citizens into the arms of right-wing populists, especially in the United States, where the most striking thing about populist movements is their economic and social conservatism. Let us say I do not feel represented as a low-income citizen of rural America, someone suffering from the economic crisis, the pollution of my rivers, an inability to give my children the education they need to achieve success, or my parents the social care they need to live a decent life; and suppose I am right to feel this, because of a representation deficit that has been well documented. Why, then, do I vote more and more for parties that want to make the rich pay even less in taxes, to unravel the welfare state a little more, and to deregulate the industrial sector so that it can expand without having to worry about environmental safeguards? To put it in a nutshell, why do I vote against my own interests?

Attempts to answer this question are fast becoming a literary genre of their own in the United States—and I say this without any sarcasm, since books that dissect the working-class vote are mostly fascinating. Countless social science researchers—and numbers of journalists as well—are going off to meet Tea Party voters to try to understand what motivates them—a return to their origins for some; a real discovery of an alien milieu for others.

In a sense, Thomas Frank opened the way in 2007 with his bestseller What’s the Matter with Kansas?, in which he investigated why the electors of the small Midwest state of Kansas should for years have steadily voted for the Republicans, if not for ultraconservatives and the Tea Party farther to the right.¹⁹ Kansas lies geographically in the middle of America’s “heartland,” now frequently and derisively called “flyover country” by the coastal middle classes, a region marked by depopulation and a declining, aging, and disadvantaged population.²⁰ It is one of the least unequal states in the United States (although everything is relative: the richest 10 percent now haul in 41.9 percent of the total income, and the richest 1 percent capture 16.2 percent, in comparison with 35 percent and 11.1 percent respectively in France). But while this is doubtless to be welcomed, it also means that the idea of taxing the rich more heavily has less support than in New York State, where the average annual income of the top 1 percent is over $2 million (against just under $1 million in Kansas).²¹ The highest US incomes—as well as the highest net assets—are not found in Kansas but elsewhere; people in Kansas frown upon those “Others” because of their lack of values, regarding themselves as more “deserving.” But they see those “Others” only on TV or the big screen, where images of an unfamiliar America are constantly relayed to them.²² All they know about the America of New York and California is that it votes Democrat.

In a way, therefore, political conflict is converted into identity conflict: there are “them” and there are “us.” The identity conflict is not a race conflict (although, as we shall see, the racial dimension is by no means absent from American political debate); nor is it necessarily a conflict between Americans and foreigners; nor is it a religious conflict, of the kind that some seek to stir up in Europe, particularly in relation to Islam. But it is a conflict between Americans. From the perspective of the professional classes in Boston or San Francisco, it looks like a conflict between the future and the past, between educated cosmopolitans and rubes and hicks who stubbornly “cling to guns or religion,” to use Barack Obama’s controversial phrase. In reverse, it can look like a fight between those who drink their coffee plain and the snobs, pseuds, and liberals—in a word, Democrats—who order macchiatos and all kinds of flavorings.

This coffee argument may strike you as anecdotal,²³ but Thomas Frank has shown just how significant it is for an understanding of why Americans with everything to gain from big government—high-quality public education, a better healthcare system, and so on—vote instead for Washington to reduce taxes and to spend and redistribute less. For them, government is the “evil,” the embodiment of all the Others who do not represent or understand them. It is a value conflict, and it is on the ground of values—not economics—that the Tea Party has won over its electorate.

It has done this by convincing the “left behind” that the present crisis is above all a moral crisis,²⁴ reflecting the decay of an America facing cultural decline for which the “flyover” jet-set is mainly responsible. In fact, it was on the abortion issue that the ultraconservative Republicans won their first electoral battles in Kansas, before finally losing control of their own party to the Tea Party. Anti-abortion, deeply religious, and anti-intellectual, the conservatives won at the polls by shifting the terms of the political debate: what had previously been a class conflict became a conflict over values. Their great victory was to redefine class relations around the concept of “authenticity,” whereas until then it had been wealth that defined social classes.²⁵

One cannot but hail their skillful political maneuvering. For the great advantage of cultural class conflict is that the most deprived groups in society can have a sense that they are winning. Economically, they have already lost and see no possible way forward; the policies of the Republicans, who cut marginal tax rates and block increases in the minimum wage, certainly offer them no solution. The disadvantaged also have a sense that their children have lost the economic battle; the American dream is now a long way off, not having survived a period in which the likelihood that children would earn more than their parents plummeted from 90 percent in 1940 to just 50 percent fifty years later.²⁶ But on the “cultural” terrain of authenticity, those at the bottom of the ladder can aspire to victory. Take the rejection of abortion, which—beyond the religious dimension—has become a moral and cultural value in conservative discourse. The problem has been reformulated in terms of “merit”: on the one side are “deserving” Americans, ready to accept adversity and even an unwanted child; on the other side are the decadents, who put their own pleasure above everything else.

… to the Hard Economic Realities

This conflict over values should not blind us to the economic distress that the most deprived social groups experience. The fact that political debate has shifted to cultural issues has not conjured away the fundamentals of class conflict—on the contrary. To win back the voters seduced by right-wing populists, it would appear necessary to refocus the debate on economic questions. Unfortunately, too many in the “New Left,” as Richard Rorty lamented in the 1990s, themselves gave “cultural politics preference over real politics,” retreating into the academy to fight over words rather than wages.²⁷ In the United States over the past forty years, the economy has grown (cumulatively) by 59 percent. That seems a good record—much better than France’s over the same period (39 percent). However, that 59 percent conceals enormous disparities: for the richest 10 percent, the cumulative growth rate for the period was 115 percent (685 percent for the top 0.001 percent!). But the bottom half of the population saw the size of its economy fall by 1 percent. For the 50 percent of people with the lowest incomes, not only was there no growth, but the situation actually worsened.²⁸

So, it is at the economic level that we must try to understand the pro-conservative vote in the red states. With this in view, the political scientist Katherine Cramer went off to talk with voters in Wisconsin, a small state south of Lake Superior, which, like Kansas, is relatively poorer and less unequal than the rest of the country.²⁹ It is an overwhelmingly rural state—hence the “rural consciousness” that Cramer places at the heart of her analysis. Rural consciousness and resentment: the two concepts, in her opinion, make it possible to understand why the most disadvantaged voters—who would be the first to benefit from greater redistribution—vote systematically against higher taxes and welfare.

There is some reality in the rancor that “rural people” express toward “urban people”;³⁰ their resentment is at least partly grounded in economics.³¹ I have already noted that America’s economic growth in recent decades did not benefit the least advantaged groups—on the contrary. We are not just talking of naïve voters or, worse, irrational people fed on reality television and The Apprentice (the reality game show that made Trump famous on the small screen), ready to be seduced by appeals to their racism and other base instincts. No, the voters in question are largely rational, and their resentment has an economic basis. They ask legitimate questions: Who benefits from what? Who deserves it? Who has power? Who is responsible? And they cannot be satisfied with the answers. Certainly they have no power, because they are no longer really represented. They do not have power, and the people with the power ignore them. No account is taken of their preferences.

But in that case, why are they not in favor of higher taxes on the rich and therefore—since money buys power—the powerful? Why do they not aim for money and power to be redistributed together? Why do they not vote “on the left,” for candidates who promise greater redistribution? This is where the concept of “merit” becomes central again. For in the eyes of these Midwesterners, most of them whites, any redistribution and any measures of social protection are benefiting primarily poor people, who do not deserve to benefit from them—what the French Right would call les assistés, welfare recipients. The deserving good folk of Kansas or Wisconsin, who uphold the value of rural hard work, do not benefit. Of course, they are wrong to think that they are victims of redistributive injustice—for example, that they pay more than their fair share of taxes yet benefit relatively less. But they are right in thinking that they have been left behind—because that is what has happened to them in the last few decades of economic growth. However, the Others who have stolen its fruits are not poor people like themselves but the men and women with money.

This kind of talk reminds one—though never explicitly—of the language used by the sociologist Arlie Russell Hochschild, who has perfectly grasped, this time in Louisiana, the core of deeply rooted frustration inside average white males.³² It feels as if their whole lives have been spent standing in line, waiting for their turn to come on the social ladder that embodies the American dream. They queue up, patiently, and what do they see today? They see all the “minorities” overtaking them: first women, then blacks, then homosexuals, handicapped people, and so on. Everyone, except people like themselves. Alone and destitute in their queue, they feel enraged against a state that always seems to trample on the “little guys.” What are they left with? God.

Do not smile. The point here is not to justify racism, homophobia, or sexism, but to try to understand. Why in Louisiana, where all of the (low) economic growth between 2009 and 2013 was captured by the richest 1 percent, did citizens vote massively for the Tea Party? In her 2016 book, Strangers in Their Own Land, Hochschild puts a lot of stress on environmental policies. It is another way of focusing our attention on what seems inexplicable voting behavior. Why do those who suffer the most from industrial pollution—and who benefit most from government protection and measures to limit pollution and its toxic effects—nevertheless vote for a party that opposes the social state and favors the large corporations that pollute the most? How can we account for this paradox? The answer is that, as the popular classes see things in Louisiana, Kansas, or Wisconsin, regulations hit the weakest members of society, while the strongest escape their effects.

This whole sense of injustice and value conflict is fueled by the reality of a representation deficit, both in the political world (as we saw from the work of Martin Gilens, in particular) and in the media. For the working classes, their general absence from the mainstream media is compounded by the vicious contempt that the “liberal elites” direct at them when they deign to look at them for a moment. I think that the Left, in the broad sense of the term, will be unable to win back this popular vote if, beyond purchasing-power or unemployment, it fails to tackle head-on the whole issue of representation. This will form the core of the proposals I make in Part Three. Of course, it is necessary to develop a strict framework for private individual and corporate donations. But working-class voters will partly see this as just one more case of regulation, just one more invasion of their liberty (even though the most deprived groups largely lack the means to contribute financially to election campaigns³³). A regulatory framework must therefore go together with a democratic revolution with respect to political representation. This is why it is essential for the popular classes to enter Parliament; only then will there be an end to their resentment.

As we shall see in Chapter 11, whether we take France, the United Kingdom, or the United States, the working classes (both blue-collar workers and employees) are the great absence on the benches of Parliament, even though they still make up more than a half of the active population. This partly explains why a large number of citizens feel unrepresented—a situation that they suffer rather than choose, since, other things being equal, they tend to prefer a working-class to a managerial candidate when they are given the choice—and it has direct consequences for the kind of policies that are eventually adopted in Parliament. This is why I support the idea that a proactive policy affording better popular representation in Parliament should be legally guaranteed. I therefore propose replacing the present national assemblies with mixed assemblies, whose members will be elected under a proportional party-list system with at least 50 percent of the candidates from the popular classes (workers in manual and office jobs or without secure employment).

The End of Class Conflict and the Abandonment of the Democrats

If whole swathes of rural America have turned in recent years to populist movements, particularly the Tea Party and now Donald Trump, this is partly due to the perception of a moral crisis. They see themselves as left behind and deserving of better, while the urban liberal elite tries to impose top-down regulation and unwanted forms of redistribution.

This does not mean, of course, that the economic battle and the struggle against inequalities should be abandoned—quite the contrary. The victory of the Tea Party in the United States is a victory for those who managed to shift the terms of the debate by replacing class struggle with cultural warfare. But above all it is a defeat for the Democrats, who were the first to withdraw from the terrain of class struggle. Thomas Frank shows this exceptionally well.³⁴ In the course of the last few decades, the Democrats have abandoned the workers, but they have also stopped attacking the aberrations of Wall Street; one need only think of Hillary Clinton’s speeches at Goldman Sachs or Citibank, which probably brought in a lot of money but also cost her dearly. There is little doubt that those speeches went easy on the abuses of the financial world—otherwise the Democratic presidential candidate would not have obstinately refused to make them public. They were meant to flatter the egos of those who paid handsomely for her interventions, as well as to treasure the interests of potential contributors.

Why did the Democrats abandon class conflict? Partly to net more campaign contributions from the rich. The worst is that they were doubtless successful in those terms. In 2016, Hillary Clinton raised more private money for her campaign than Donald Trump did for his—and spent more money too. She won the battle of electoral resources, but then fell flat at the polls. Having largely turned her back on the popular classes, she ended up losing their vote.

We might ask what has led the Democrats in recent years to pursue a strategy that it is tempting to describe as harebrained. Thomas Frank suggests an interesting answer, although one would have liked him to give some empirical evidence for it: namely, that during the years in between elections (when they are not advising candidates) the Democrats’ advisers—or strategists—spend their time lobbying. In other words, they work for the corporations that will subsequently fund the candidates’ campaigns. It is what is called covering all the fronts at once—a conflict of interests might be another way of putting it—with the unfortunate exception of the social front.

The Democrats too wanted, and fought for, the model of economic growth that America has seen in recent years, without showing any concern about inequalities of distribution. It is true that, at the national level, there can be some cause for pride in America’s relatively high growth rates, especially if compared with Europe, but they have profited only a tiny minority. The works of Thomas Piketty and Emmanuel Saez have shown that, since the end of the economic crisis, the richest 1 percent have captured more than a half of economic growth in the United States.

I do not agree here with Larry Bartels, who seems to lay the explosion of all inequalities at the Republicans’ door.³⁵ I am completely with him when he highlights the role of policy changes since the end of the Second World War in the surge of economic inequalities; these were not an inevitable result of globalization and technological advances, as some like to claim, but flowed from a series of economic policy choices.³⁶ What Bartels overlooks, however, is that if lower to middle incomes increased faster under the Democrats than under the Republicans, they nevertheless—even during Democratic administrations—increased much more slowly than the highest incomes. Under the Republicans, top income groups creamed off nearly the entirety of economic growth. Under the Democrats, they creamed off the great majority of it. OK, that is less than everything, but the effect was ultimately the same: a widening of inequalities.

So, not everything is the Republicans’ fault. The Democrats are also to blame, perhaps more so, since they claimed to be defending the interests of the most deprived. (The Republicans stuck to their usual place in class relations, on the side of the large corporations and the superrich.) The Democrats applauded economic growth, failing to take action that would lead to its being shared around equally. In this way, they fueled the vicious circle of inequalities.

Political and Economic Inequalities: A Dangerous Vicious Circle

The growth of economic inequalities fuels the growth of political inequalities; and the greater the political inequalities, the more numerous are the policies that lead to even sharper economic inequalities. Thus, as a direct result of the deregulation of American political democracy, the share of the very rich in contributions to election campaigns has skyrocketed since the 1980s. According to data gathered by Adam Bonica, 0.01 percent of the US population contributed 15 percent of funding in 1980.³⁷ But the figure had climbed to 40 percent by the time of the 2016 presidential election—much more than the share of annual incomes (4.3 percent) and even total wealth (10.7 percent) controlled by the richest 0.01 percent in the United States.³⁸ This soaring inequality in election contributions is a direct consequence of the rise in economic inequalities; Adam Bonica and Howard Rosenthal have perfectly documented this from the political contributions of the wealthiest 400 Americans.³⁹

Of course, the structure of donations varies from one candidate or party to another. As we have seen, 59 percent of the donations received by Bernie Sanders during the Democratic primaries consisted of small donations less than $200, whereas for Hillary Clinton small contributions accounted for only 19 percent, and larger contributions for more than 53 percent, of her total campaign resources.⁴⁰ Even for Barack Obama, donations of $200 or more accounted for 44 percent of his total resources in 2012.⁴¹ With the explosion of inequalities, both Republicans and Democrats “benefit” more and more from the generosity of the ever richer superrich. For although I have spent more time so far on the conservative billionaires—for good reason, since the methods of the Koch brothers or the Mercers are the most objectionable—the Democratic Party, too, has plenty of moneyed supporters, the best known being Warren Buffett and George Soros. This is not without dangers—for the Democrats as well as the Republicans.

The Grip of Money That Almost Turned against the Republicans

In effect, an ever tinier minority of individuals are providing the sustenance for political parties. The times are long gone, in the immediate postwar period, when political theorists raised questions about the survival of mass parties in various countries. Maurice Duverger, the pope of French political science, drew a distinction between (German) mass parties and (French) cadre parties.⁴² Today we would have to add the category of “captured parties,” whose principal resource is the checkbooks of the megarich 0.01 percent. I say this in all seriousness, since the key questions in the running of any political group are: Who holds the power? To whom are the power-holders responsible? What means do they have for taking action? What resources do they depend upon? If money becomes the principal means of power and the only necessary resource—apart from activists and cadres—it plays havoc with the customary balance of forces.

Thus, the hyperdependence of the Republicans on a mere handful of megarich, beginning with the Koch brothers, eventually had negative effects for the Grand Old Party.⁴³ To put it simply, “traditional” Republicans ended up losing control of their own movement, as financial dependence on the Koch brothers for the running of the party and the funding of candidates reached a point where, in an exceptional, though hardly unpredictable, turnaround, the two men could decide on anything in contradiction to the majority party line.

“Traditional” Republicans lost control of their movement, but they also lost elections. It was impossible for the political preferences of a handful of Kansas billionaires to reflect those of the Republican electorate. In 2012, in the tight grip of the “Kochtopus,” the Republicans chose neither the best presidential candidate nor the best political message; they went for the candidate of money, Mitt Romney, and the message of money. As Larry Bartels has shown, if Republican voters turned away from Romney during the election campaign, it was because they saw that the former governor of Massachusetts cared more about people with money than people without.⁴⁴ From this point of view, the remark that the Republican candidate let slip about the 47 percent of Americans who are nontaxpayers and welfare recipients (and about whom he therefore did not have to care) was the kind of political hara-kiri you don’t see often in life.⁴⁵

The extreme dependence on ultraconservative billionaires did not end with the choice of candidates and political message. As we shall see, even in the running of election campaigns, and particularly the use of private data to microtarget electors, the tentacles of the Koch brothers wrapped themselves around the Republican National Committee. Whereas it used to handle its electoral data internally, it is now forced to rely on a database that the Kochs developed themselves and that is marketed by their data analytics company i360.

Why, you may ask, do the Republicans not simply end the chokehold by cutting off the moneyed tentacles? The reason is that, in the current state of regulation, Republican candidates cannot do without them. It is almost impossible to run in even a local primary today without having first raised hundreds of thousands of dollars. Money has become the new form of disenfranchisement, and only a few pockets are deep enough to provide the necessary sums. A change in the law is required to break the tentacular grip.

Donald Trump is in a way an exception: his personal fortune allowed him to evade capture by the Kochtopus; and when the brothers withheld their support for his candidacy in 2016,⁴⁶ he did not fail to lay into them on Twitter, also describing the Republican establishment, with his well-known moderation, as the “puppets of politics.”⁴⁷ (It is hard to disagree with the latter term, by the way, given the relationship that the Republicans have had for years with the billionaires.) But Trump did not show any special merit in refusing to bow and scrape before King David and King Charles; a multibillionaire himself, he did not need them and went on to put up 25 percent of his own campaign funds.⁴⁸

A Trap the Democrats Do Not Avoid

Although on the Democrats’ side, there is no organization as powerful as the Koch empire towering over the Republican Party, “philanthropy” is a snare that can trap them at election time. Many commentators have explained Hillary Clinton’s unexpected defeat in 2016 by her closeness to financial circles. And the (equally unexpected) success of Bernie Sanders in the Democratic primaries reflected a drive by significant sections of the electorate to link up with the party’s historical values. As we have seen, the Democrats have abandoned those historical values—particularly class struggle—to satisfy the preferences of the Wall Street traders, Silicon Valley engineers, and Google or Twitter developers who have become its main financial backers.

The problem is that the preferences of such individuals, whose annual incomes stretch (at least) into six figures, do not correspond to those of the popular classes and labor unions. On social questions, the wealthy contributors to the Democratic Party are more liberal than those who fund the Republicans: they are for equal marriage, resolutely defend abortion when it comes under attack, and sometimes even support strict firearms control. On economic questions, however, they are extremely conservative, in some cases as much as their Republican counterparts. Taxation just happens to be one of those cases. For, as good philanthropists, they are always happy to give—to a political party, a charitable organization, a good cause, and so on—but mostly oppose any increase in taxes. Consequently, Democratic politicians have humored them with historically low marginal rates of taxation, over and against the preferences of the traditional Democratic electorate, so much so that the latter eventually deserted them in droves.

I mentioned Hillary Clinton above, but on this score Barack Obama—who spent endless hours during his presidency raising funds from the rich—bears an enormous share of the responsibility. To quote from the Washington Post in July 2014, “Regardless of what is going on in America and the world, one thing has become certain about President Obama’s work schedule—there will always be fundraisers.”⁴⁹ According to the paper’s figures, during his first term, Obama hosted 321 fundraising events, compared with 80 for Reagan, 137 for George H. W. Bush, 167 for Bill Clinton, and 173 for George W. Bush. This might be seen as the continuation of an upward trend over decades, except that things only really took off under Obama, a Democratic president, so virulent in his hostility to Citizens United,⁵⁰ who might have been expected to reverse the trend instead of amplifying it. What is more, his fundraising naturally took place among well-off sections of society rather than the popular classes and had the effect of widening the gap between these and the Democratic Party.⁵¹ This also helps to explain Obama’s relative economic conservatism during his two terms, which did not witness any reduction of inequality in the United States. Given the time he spent on the road collecting money, it is tempting to ask whether he was capable of doing his presidential job properly.

From Germany to the United Kingdom: An American-Style System?

In the United States, then, all the dikes have burst in the last few decades; nothing holds back the torrent of money, whatever its origin, and even the transparency of donations has been swept away.⁵² Both the Republican Party and the Democratic Party appear to be in the grip of money, and politicians on both the left and the right no longer seem to answer the preferences of any but the rich. Should this be regarded as an American peculiarity? I will show that, on the contrary, these aberrations now threaten the whole of Europe, beginning with Germany.

Lack of Transparency in Germany

Ways of funding political democracy rarely make it to the front page in Germany’s leading press organs.⁵³ When we probe deeper, though, we may well wonder about a certain whiff of scandal that surrounds the political process there. As far as funding is concerned, the workings of German democracy have a lot more in common with the American than the Belgian or French system, and private interests—particularly those of the large industrial groups—play a not insignificant role. The point here is not to denounce the German system as less virtuous than the French, but to take the measure of everything it involves. For Germany’s industrial choices, including an aggressive export orientation, have consequences for European countries as a whole.

What is the German model exactly? On the one hand, as we saw in Chapter 5, Germany has a historically innovative system for the funding of political parties and associated foundations. On the other hand—and this is more surprising, since many other countries match public funding with the regulation of private funding—there is a complete absence of regulation concerning individual and corporate donations, with the exception of a transparency requirement. This brings us to one of the key points in our enquiry: the links between money and democracy have never been fully, or calmly, considered in the light of historical and comparative experiences. Germany has therefore broken new ground in some areas, while showing itself to be very retrograde in others. It is a country where there is no ceiling on the amounts that political parties can spend (in election campaigns or more generally), or on the donations they are permitted to receive. Yet each year huge sums are devoted to the funding of parties there.

The only legal obligation relates to transparency. The accounts of political parties, published each year on the Bundestag website, must include a list of all donations above 10,000 euros as well as the identity of the donors. These data are far from perfect, to be sure, since many companies use their subsidiaries to “slice up” their donations into sums of less than 10,000 euros apiece, so that they do not have to declare them; there is also quite a long delay between the time of the donation and the point at which the public is informed of it. But on these matters Germany does much better than France, for example—where the public does not know who gives how much—and with a little political will it would be easy enough to plug the hole in the legislation. Furthermore, all donations in excess of 50,000 euros have to be declared each month, and a special page on the Bundestag website lists them in something close to real time.⁵⁴

The transparency requirement was introduced very early in postwar Germany. On paper, it goes back to 1949 and the adoption of the Basic Law of the Federal Republic, Article 21 of which stipulates that political parties must make public any sizable donations they receive. In practice, it was necessary to wait a little longer, since the Basic Law noted that the details of how parties should publish their donations would be established by a special law on parties, and the German parliament did not enact that law until nearly twenty years later, in 1967.

Beyond these legal niceties, what has been the reality on the ground? We have already seen that German companies and employers’ associations contribute very generously to political life in the country. With regard to their motives, perhaps the most striking feature is their tendency to contribute to more than one party at once, on both the right and the left.

In every single year between 2008 and 2015, the specialty chemicals company Evonik Industries AG—whose chairman of the board of directors, Werner Müller, is a former minister of economics and technology—donated tens of thousands of euros to the Christian Democratic Union (CDU, a period total of 575,000 euros), the Social Democratic Party (SPD, a total of 669,000 euros), and the Free Democratic Party (FDP), as well as making regular payments to the Christian Social Union (CSU) and the Greens (surprising though it is that they accepted money from a company that makes most of its profits from chemicals). Why did it finance all the parties in this way—observing symmetry even between the CDU and SPD, the main rivals for power?

It would be tempting to ask the same question to directors of the Daimler carmaker, which between 2008 and 2015 donated a million euros to the CDU, the same to the SPD, and from 300,000 to 400,000 euros each to the CSU, FDP, and Green Party—the left-wing Die Linke being the only significant party “overlooked” in this largesse. Or what about Deutsche Bank, which gave 200,000 euros to the FDP and an identical sum to the CDU in 2009—despite the fact that it was a tricky year financially, when the government came to the assistance of German banks? Was it a corrupt quid pro quo? One thing in return for another? Anyway, that is how it looks.

It’s funny that German corporate donations to political parties are rather like Christmas gifts: they all happen on the same day. This appears clearly in Figure 56, a screen capture from the Bundestag website, where we can follow the policies of the Allianz insurance giant in 2006—though they are peculiar neither to Allianz nor to 2006—which on August 28 and 29 donated simultaneously the sums of 50,000 to 60,001 euros to each of five German parties: the SPD, CDU, CSU, Alliance 90 / The Greens (Bündnis 90 / Die Grünen), and the FDP. Obviously it was the day they got their checkbook out!

Many readers will probably be saying that such figures in the thousands—not millions—of euros are a long way from America’s hyperexcesses of inequality, and that Germany remains a promising model. But I think we should take the German excesses seriously, too, with all the donations coming from large, mostly export-oriented corporations. They may explain, at least in part, the German obsession with trade surpluses, even when these take economically irrational proportions and have had the consequences we know for the collective organization and functioning of the eurozone since the crisis of 2008.

Figure 56. Donations by Allianz Corporation to German political parties in 2006, screen capture

A Little French History

Of course, what I just called “German excesses” have nothing cultural about them; they stem from the law, or rather from the absence of laws imposing strict limits. In France today, companies are not permitted to make donations to political parties or campaigns. But they were in the early 1990s, and what we see in the data from those years is scarcely more heartening than the present situation in Germany.

I have collected for the years from 1993 to 1995 (the only ones for which such data are available) a full list of corporate donations compulsorily recorded in the accounts of political parties, together with—and this is the most interesting—the names of the corporate donors.55 More than 2,500 private corporate donations were received by parties in 1993, and more than 3,000 in 1994. They benefited all the major political movements, but the conservative Rassemblement pour la République (RPR) was well in the lead with 1,932 donations between 1993 and 1995 (a total of 138 million euros, including 64 million in 1993 and 62 million in 1994), followed by the Socialist Party (1,196 donations and a total of 98 million euros); the “Parti Républicain,” the Communist Party, and the centrist Union pour la Démocratie Française (UDF) paled in comparison, with 5.6, 3.8, and a little over 2 million euros respectively.

So, which companies displayed particular generosity to the French political parties? The top four consisted of Bouygues, Vivendi (then called the Société Générale des Eaux), Financière SAE-Fougerolle (better known today by the name of Eiffage), and La Lyonnaise des Eaux—all of them under contract to the state and / or local communities. Here I am talking only of contributions to political parties, but there were also numerous corporate donations to election campaigns; in the next chapter, I shall have occasion to consider, for example, the exceptional generosity of companies in the Hauts-de-Seine department bordering on Paris.

Between 1993 and 1995, the Bouygues group in all its forms—that is, Bouygues, Colas (a public works subsidiary), Sacer (a road haulage subsidiary), and so on—donated to no fewer than twenty-eight political movements, from the Radical Party to the Parti Républicain, including the Communist Party, the Socialist Party, and, of course, the RPR. It is not that the group changed its political preferences over time; it gave a good greasing each year to the whole range of political palms.

The good old checkbook again.… So, what we see in France in the early 1990s with Bouygues or Vivendi, but also Alstom and JC Decaux—nothing illegal under the regulations of the time—bears a strong resemblance to the present situation in Germany. What conclusion may we draw? The only way to change corporate practices is through new legislation; if companies are allowed to donate as much as they see fit to political life, they will continue to do just that. Why would Philip Morris deprive itself of the opportunity to persuade German politicians that nothing should be done against the ravages of tobacco? Why would German carmakers give up the means they have to keep diesel models running? Why would the banks fail to insure themselves politically against the risk of collapse? I could give more and more examples, but there is no point. You will have understood that, to fight against the weight of private interests, particularly industrial interests, in the democratic process, the first part of any solution is to prohibit companies from making financial contributions.

The British Middle Way and the Danger of Oligarchic Capture

Such a prohibition is no more to be seen in the United Kingdom than in Germany, but the British system is nevertheless much more restrictive: while there is no cap on individual or corporate contributions, the ceiling on election expenses is very low. This was recently brought home to the campaigners for Brexit, who, it is claimed, spent more than the permitted amounts in 2016.⁵⁶

As we saw in Chapter 3, donations in the United Kingdom used to be very concentrated: the top 10 percent of donors accounted for more than two-thirds of donations. The main point I want to make here, though, is that the United Kingdom is symptomatic of another excess in the current system: the role played by the money of oligarchs, particularly Russian oligarchs. I am not thinking of football clubs or the like—although much could be said about them—but of the funding of political democracy. According to Transparency International, the many Russian assets invested in London in recent years serve as a great machine for the laundering of dirty money.

Not only are these assets being invested in the British capital; they also flow into the coffers of political parties. Foreigners are not allowed to fund parties or election campaigns in the United Kingdom (or in many other countries—even the United States, where the free-speech conception of money stops with physical and legal persons of American nationality). But many Russian oligarchs have acquired British citizenship, which the United Kingdom is happy to grant, often in exchange for their financial investments, and so they are free to act generously in funding the political process.⁵⁷ A couple of revealing examples: Lubov Chernukhin, wife of the former Russian finance minister Vladimir Chernukhin, has made donations totaling no less than £514,000 to the Conservative Party since 2012, the last recorded one having been £161,600 in September 2017; Alexander Temerko, a businessman who made his fortune in the energy sector and worked for Yukos (the Russian oil company long controlled by Mikhail Khodorkovsky) before acquiring British citizenship in 2011, made no fewer than forty donations to the Conservative Party between 2012 and 2017, with a total value of more than 500,000 euros.⁵⁸ In exchange for what? That is indeed the question. Temerko is a member of the Conservative Party, but that would be one hell of a membership fee.

Since we are talking of the money-politics nexus, let me conclude this excursus on the United Kingdom by mentioning Lakshmi Mittal, a well-known businessman who specializes in steel and has generously subsidized the Labour Party in recent years. According to information on the Electoral Commission website, he has given no less than 6.8 million euros to the Labour Party since 2001.⁵⁹ For love of Tony Blair? As many commentators noted in 2002—although it did not prevent Mittal from continuing to donate, in increasing quantities, over the following years—it is tempting to make a connection between his generosity and a letter that Blair sent to the Romanian government supporting Mittal’s purchase of a steel plant that was up for sale. Tony Blair had to explain himself on the matter before the UK Parliament.

I highlighted above that the Democrats in the United States have abandoned class conflict. The truth is that the Labour Party has done the same in the United Kingdom—like causes produce like effects.⁶⁰ It is not that people’s experiences and perceptions of class have changed in recent decades; they have not.⁶¹ Class has not disappeared; if anything, the concentration of wealth has increased in the United Kingdom since the 1980s,⁶² and the average income of the poorest fifth of the population has shrunk by 1.6 percent in 2018.⁶³ The reason, rather, is Labour’s deliberate move to the right under Tony Blair—a move at least partly due to its increasing reliance on large donations from wealthy individuals and firms.⁶⁴

From the Excesses of European Regulation to Hopes from Elsewhere

The most disturbing aspect for the future is that, even if the British government decided to get a grip on things and tighten its regulation of the private funding of democracy—why shouldn’t it after all, since a century and a half ago it pioneered the capping of campaign expenses?—it would be in danger of running up against EU legislation. The reader may rest assured that we will shortly move on to some solutions. But here is one last piece of bad news: Europe has decided to follow the path of the United States in equating money with free speech. Why? Obviously to blow away the regulations limiting private money in politics.

When Europe Undermines the Regulation of Private Funding

The European Union’s most visible intervention on the funding of political parties and campaign expenses was undoubtedly the 1998 judgment of the European Court of Human Rights (ECHR) in the Bowman v. United Kingdom case.

In brief, the ECHR ruled that the ban on paid political advertising was a violation of the freedom of expression. What exactly was at issue? A certain Mrs. Bowman, the executive director of the Society for the Protection of the Unborn Child, was prosecuted in the United Kingdom for the distribution of anti-abortion leaflets during the campaign period preceding parliamentary elections—leaflets that contained information about the views of local candidates on the subject. Since 1983, under the “Representation of the People Act,” it had been illegal in a pre-election period for any unauthorized person to spend more than £5 for the purpose of conveying information to voters in support of one or another candidate (the regulation of campaign expenses necessarily involves defining who is and who is not authorized to spend).

Although Mrs. Bowman had been prosecuted for the same offense several times before in the United Kingdom, the ECHR decided on this occasion to acquit her. It did so in the name of free speech—on the grounds that limits on spending must be compatible with the freedom of expression protected under Article 10 of the European Convention on Human Rights. In fact, the ECHR held that laws restricting the distribution of leaflets in a pre-election period were a total barrier to Mrs. Bowman’s wish to publicize certain information that might influence people to vote in favor of an anti-abortion candidate. Why, the court asked, should she be prevented from spending money in this way, when there was no restriction on the freedom of the press to support or oppose any ideas or candidates? The ECHR concluded that the restriction in question was not justified by the stated objective of preserving equality among candidates, and that it was therefore in violation of Article 10 of the Convention.

The main problem with this judgment was the way in which the Court drew a parallel between, on the one hand, freedom of the press (regulated by rules defining what is a press organ), journalistic freedom and ethics, the ownership and governance structure of the media, and so on, and, on the other hand, the freedom of individuals to spend their money on political publicity—for example, by printing and distributing leaflets—which potentially had no limit other than their monetary wealth. This false track inevitably recalls the one followed by the US Supreme Court, which, in the name of free speech and on the strength of a completely personal interpretation of the Constitution, effectively decided that, whatever the wishes of the electorate, Congress had no right to legislate to restrict the weight of private money in political campaigns. For the moment, the ECHR decision is of limited reach and may easily be underestimated, but we need not wait for further ECHR or European Court of Justice rulings before we begin to get seriously worried.

A Good for an Evil? On the Corruption of Brazilian Political Life

Let us end this chapter with a potentially more positive trend. In Brazil, companies have long been the main sources of income for political parties, both officially (through donations) and unofficially (through kickbacks). This is not because of political convictions or even the goodness of their hearts, but because the “return on their investment” has been very substantial. Political science researchers have shown that, in 2006, companies specializing in public works obtained an average increase in the value of their government contracts more than 14 times higher than the amount of their donation to a successful Workers’ Party candidate in the federal parliamentary elections.⁶⁵

This helps us to understand the origins of the Petrobras scandal that has tarnished the Brazilian political class; there is a lot to be gained from such types of behavior. And just as we thought we had seen everything, an even greater scandal has broken out in the last few years, this time sullying the whole political class in Latin America. The roots are still Brazilian, though, since it is the giant BTP Odebrecht conglomerate that stands accused of greasing the palms of politicians of all stripes throughout the region. The pattern is all too familiar by now, involving kickbacks to political leaders in return for the allocation of public markets. And the scandal has spread to Venezuela, Argentina, Colombia, Guatemala, Mexico, Honduras, and Peru (where President Kuczynski has been forced to resign).

The good news—for there is some in this banal story of corruption—is that the scandals have led to radical reforms, with a ban in 2015 on corporate donations in Brazil and the introduction of a system of public funding for political parties. The full program has yet to be implemented in a chaotic political context, and it is too soon to evaluate it properly. But the rules being proposed seem ambitious—about time too! Moreover, the new system is being established at the very moment when Western democracies are gradually dismantling their public funding systems.

It is quite possible that, in the near future, we will see a similar movement in the other large emerging democracies—particularly in India, where candidates’ expenses have skyrocketed in recent years.⁶⁶ Corruption scandals have also been on the rise, leading to growing public distrust. The Modi government has announced several times that it is going to take action and introduce new regulations, but so far nothing concrete has happened—there have even been some disturbing retreats from earlier timid legislation. The Brazilian case shows that it is never too late, and that crises and scandals can end in a salutary new awareness. Faced with these questions after decades of fumbling and failure in the richest parts of the North, the democracies of the large emerging countries might perhaps prove to be the most innovative in the future.