Money in politics

From this week’s Bloomberg column from Tyler Cowen

Nor did Biden’s cash advantage give him a decisive edge against Trump, even if he wins the election in the final tally. The role of money in politics is overrated, and it may be falling still. It just doesn’t cost much to use social media effectively.

This report from the Centre for Responsive Politics projects a figure of $14 billion for the 2020 election. By Mid-October they report that Democrats had spent $6.9 billion, compared to $3.8 billion for Republicans. The figures have been reported by CNBC and the NYT, so are presumably accurate.

Trump had the best popular vote performance of any Republican ever, in the midst of a bungled pandemic, while being outspent by Democrats 2:1. A few things to consider…

  • The relationship between polarization and election spending is interesting. It seems possible that polarization increases donations, while simultaneously making political advertising less effective.
  • Democrats are generally the ones most vocal about the corrosive effect of money in politics, but judging by their fundraising, are the most effective at mobilizing it (at least certain types of it). Might this make Democrats less enthusiastic about changes to Citizens United?
  • If money is less effective than once thought, could it impact the democratic party’s internal politics. Does it reduce the cost to considering policy that alienates corporate donors?
  • Even if money is becoming less effective, there may be little incentive to raise less of it if parties are a) unsure about the exact level at which its impact diminishes, and b) convinced their opponents won’t follow suit. If raising money is relatively easy, its presumably always going to be better to have more than less. 
  • In addition, raising money probably has lots of positive spillovers for parties, they get to build relationships with voters and/or influential groups, they get to collect data, and they get to test messaging.

Please check out the full report, its full of fascinating breakdowns.

An election in Bolivia

After accusations of fraud and mass street protests, which culminated in military involvement, Evo Morales, Bolivia’s leader since 2005, resigned and fled to Mexico. That was October 2019. A caretaker government took power, and on Sunday the long-delayed election was re-held. Results are still coming in but it looks as if Evo Morales’ chosen successor has won by a 20-point margin.

In a country where almost half the population is indigenous, Evo Morales was Bolivia’s first indigenous president. He nationalised the resource extraction industries, fought inequality, and spent big on social policies. It worked, in part thanks to a massive commodity boom. GDP tripled, the poverty rate fall from 60% to 35% over his term and a country long been dominated by a European descended elite gave the indigenous flag equal status in 2009.

The Wiphala – Bolivia’s indigenous flag

He also introduced a referendum to eliminate Presidential term limits (it failed). He got them eliminated anyway thanks to a favorable decision from the highest court. In the 2019 election, it is alleged he tampered with the vote to push himself over the 20 point lead required to avoid a run-off (it is worth noting that no one denies he was double digits ahead of his opponent). His supporters counter that his removal by the military and reactionary opponents was a coup.

What is clear is that a majority of Bolivians want his project to continue, even if he will no longer be part of it.

The whole story is polarising and news coverage tends to reflect the ideology of the source. For a more critical take, which clearly hoped his successor would lose the election, check out this piece in the NYT. This piece by Jacobin: Evo Morales Was the Americas’ Greatest President speaks for itself.

November 2020

I remember where I was when Donald Trump’ won. I had spent most of the day at work refreshing 538’s live tracker, initially in a corner where I would not be noticed, later with my manager hovering anxiously over me; she was from New York. By 5pm it had become clear Hilary was in a lot of trouble and a group of us gathered in a bar to watch the end.

We had been arguing about the possibility of a Trump victory in my house for months. None of us liked him, but we were divided about the long term ramifications of a Trump Presidency. I took the position that a victory, while catastrophic, might be the shock the Democratic Party needed to reconnect with its progressive tradition. I had been stung by Bernie’s loss and the impression that the party had done everything in its power to undermine him. My housemates, closer to the political center, thought my position was irresponsible or suspect.

I have since changed my mind. My position in 2016 was rooted in a cocktail of Marxian crisis theory and Liberal optimism that I now doubt.


Marxian crisis theory made two important contributions to my thinking. First, that crises were an inevitable part of capitalist society. This has many uncontroversial variations; few economists would argue recessions can be avoided perpetually; Keynesians accept that capitalism is not perfectly self-governing and state intervention is sometimes necessary; Schumpeter’s famous ‘Creative Destruction,’ was a reworking of Marxian theory.

The Marxian twist comes in understanding these crises as a necessary part of society’s progression. Marxists thought societies progressed through similar stages, from Slavery, to Feudalism, to Capitalism, and finally to Socialism and Communism. Since this trajectory is a positive one, with a desirable end point, it gives crises a positive tinge; crises are not unfortunate mistakes in need of urgent repair, but forces puling history in a positive direction. Accordingly, the appropriate response might not be stabilisation, adjustments, and a return to normal.

This belief had tragic consequences in Weimar Germany, when the Social Democrats permitted social breakdown in the hope it would hurry the inevitable transition to socialism. Instead, they opened the door to Hitler.

(If teleological thinking like this sounds absurd, consider, do you think countries develop in clear stages from agriculture, through basic and advanced manufacturing, perhaps along the way becoming liberal democracies? This incredibly common view of development, modernization theory, is just Marxist stages sin Marx. For a simple overview, and a more academic one.)

Now, I was never a Marxist, but I would have accepted that:

  • Crises were inevitable
  • They were the necessary building blocks for social progress

This tangled with the optimism instinctual to the Global North’s most privileged. The idea that progress was an independent force moving ever upwards seemed validated by the political triumphalism and technological bullishness that overshadowed my youth. The world had problems, but they could be overcome with the right combination of technology, effort, and cooperation.

All in all, it was easy to see how that could predispose me to taking a sanguine view of a Trump Presidency.


I no longer hold this position. Another four years of Trump will be catastrophic. In part this is because several of these assumptions have changed:

I no longer subscribe to a teleological view of history of progress. History is not going anywhere and straight lines are an optical illusion produced by hindsight. ‘Contingency’ sits at the heart of my intellectual toolkit today; it was absent in 2016.

Having now seen two major crises up close I am deeply skeptical of deterministic accounts of change, the simple arithmetic of status quo + crisis = change. Crises may open doors. but specific configurations of forces are required to step through them, and it is far from certain they exist today. The status quo inertia is enormous and the counter-revolution is well-armed; the Bundesbank’s representative on the ECB is already calling for debt reduction:

Most importantly, I underestimated the fragility of democratic institutions. I maintain that things are not as bad as they seem, and four more years of Trump might only continue the rather embarrassing decline of American prestige. Institutions could bounce back, but they might not, or only do so incompletely; four years of stacking have already skewed the US judicial system for a generation. I no longer feel comfortable playing Russian Roulette.