Does corporate funding undermine democracy?

During the school elections, candidates distributed notebook labels and similar “gifts” among younger children. When the catholic nuns found out, we were asked to hand over those goodies. But, they could have bought us only if we were up for sale. Democratic politics is not any different. 

Arvind Kejriwal has accused Rahul Gandhi and Narendra Modi of “helicopter democracy”. So far, the election commission has seized cash worth Rs 240 crore and liquor worth crores. Now, an ordinary citizen can inform the Election Commission of illegal distribution of cash or liquor or any such malpractice by uploading a video or audio clip.  Many think this to be “campaign finance plutocracy”.

The responsible citizens and election commission argue that they should fight tooth and nail to prevent it. But, it is not hard to see why the admirers of democracy want to believe this. 

If this is not “democracy”, they can keep yammering about special interest money and corporate funding. They can damn the politicians and still maintain that the solution to the problems of democracy is more and more democracy. They can have it both ways. 

But, if this is merely the product of human selfishness and myopia, the blame should be placed squarely where it belongs: On the indolent masses.

The Election Commission had launched a voter education drive to tell the voters that this was wrong. But, if a man has to be taught that it is wrong to accept liquor for votes, what logical argument can possibly convince him? 

This is how Indian democracy works. If that is a reflection of people's souls, Indian democracy is beyond reform and repair.

Campaign finance reforms are good as far as it goes, but it cannot change human nature. In any case, it cannot change the fact that voters do not know elementary social science, and cannot make informed choices. The admirers of democracy find this unpleasant, and will deny this by hook or by crook.

Now, it is perhaps true that politicians can buy voters with Rs 10 or Rs 100 coupons. But, no one compels voters to vote for the politicians who distribute cash and liquor. It is not hard for a man to accept liquor from the local politician and still have a healthy contempt toward him and punish him.

When I once tried to shirk during college elections, a candidate’s supporters chauffeured me to college. To punish these hooligans, I voted for his opponent. I did not tell anyone because I feared that they might retaliate. The point is that for the voter, political virtue is almost free. No one knows what he does inside the polling booth. He finds it hard to do the right thing even when it does not cost him a single paisa.  

If the voters have such soft hearts and soft heads, virtue in democratic politics is forbiddingly expensive. Asking politicians to change is a lot like nagging a brick wall. Indian politicians---or politicians anywhere for that matter---are not known for their decency.  It is worse than a waste of time to ask them to act against their own self interest. 
In the marketplace of democracy, politicians have to estimate with reasonable accuracy how people might respond to such tactics. The election commission has said that Andhra Pradesh is the most expenditure sensitive state because nearly half the money they seized was from Andhra Pradesh.

It is hard to isolate causal factors and decide which parts of India are expenditure-sensitive, but if politicians make a mistake, they pay the price.

If they think that money matters more than it does, they might spend more than necessary to get ingratitude in return. If they think that money does not matter, they will spend too little and fail. There is nothing more ridiculous than an unsuccessful politician.

If voters are decent fellows who are pained by the aggressive vote buying tactics of politicians, it is not hard for them to do something about it. They can easily decide to not vote for the politicians who spend more on advertising and campaigns. Nothing angers people more than the influence of corporations in elections. If politicians have raised money by promising to sell favors to Tata’s and Ambani’s, it is suicidal to vote for politicians who spend more. If voters reasoned like this, politicians will spend as little as possible. 

Politicians can sell favours only if the voters do not care. If politicians sell favours that anger voters, they will soon be looking for a real job.

Money seems to play an important role in politics, but this is overstated. In countries where the campaign contributions statistics are known, the contributions are only a small fraction of the GDP.

In the 2008 elections in the United States, the money spent by the candidates for office, political parties, and independent groups was only $5.3 billion, and the annual donations were less than a billion. But the federal government was then spending well over a trillion every year. Is it even plausible that the corporations spend so little get so much in return?