The price of democracy

The price of a vote is estimated at € 6 for the legislative elections, and € 32 for the municipal polls in France, according to a working paper 'The Price of a Vote: Evidence from France 1993-2014', scheduled to be published in February 2019 and, authored by Julia Cagé, associate professor of economics, Sciences Po Paris, and Yasmine Bekkoiche PhD student at the Paris School of Economics. "Simulations show that small changes in spending patterns and caps can have a large impact on electoral outcomes and seats. Our results suggest that political finance needs to be tightly regulated", they cautioned. Indeed, money in politics is no more 'a strictly American' phenomenon. In France, despite strong campaign finance laws, campaign donations have a direct influence on legislative and municipal election results", the authors state.

Cagé (34-plus), the better-half of Thomas Piketty, author of best-seller Capital in the Twenty-first Century and a severe critique of growing inequality in the global system of capitalism, subtly questioned the integrity of President Emmanuel Macron in a year-end interview to the morninger of Communist Party of France. Terming Macron's economic policy as one that 'corresponds to the preferences expressed by these rich people and not at all to the interests of the majority', she expressed concern over the very system which is flawed and gave a call for 'cleaning up the financial system of democracy'. This is elaborated in her paper 'Le Prix de la démocratie de' (Price of Democracy).

In a frontal attack on the shah-en-shah of Élysée Palace, Cagé cited, "In the City of London alone, he raised €800,000 (compared to € 30,000 raised in the city of Lille). The consequences were rapid: abolition of the ISF, flat tax on capital and abolition of the exit tax", She called it a kickback, "except that it's not corruption since there's nothing illegal. It is the system that is flawed". Elaborating the point, she said, "Although Emmanuel Macron did not receive direct funding, he did receive public money. Those who gave €7,500 actually spent only €2,500.

The remaining €5,000 is refunded in the form of a tax reduction. Of the 13 million donations that financed the social-liberal LaREM campaign (La République En Marche), €8 million were paid by the French. This is one of the other injustices in the system since only the wealthiest benefit from this tax reduction. When the most modest, who are not subject to income tax, want to give, for example, € 300, they pay € 300."

The happenings in the financial architecture of the West European political economy lead several current affair analysts to be on guard against 'Americanisation' of European politics, although it's not new. It was precipitated from the mid-20th century. But there is a perceptible monetary infection across the Atlantic. It penetrates Europe but in a skewed and uneven way, especially in the so-called former 'socialist' economies. Ten years ago, in an MSc dissertation on Americanisation of electoral campaign in Croatia in 2003 and 2007, submitted to the London School of Economics, Milly A Doolan inquired into the impress of 'Americanisation' as an indicator of change and its bearing on not only the 'political campaigning trends but also to a society in general'. Croatia, formally a part of a socialist state a quarter-century ago, became a democracy in which catch-all messages have replaced those framed by ideologies. Doolan expands the hypothesis further: "catch-all parties allow the assimilation and representation of diverse interests and demands of different groups, and may even embrace ideologically contradictory policy alternatives."

The two Paris-based economists are precisely worried by the American shadow over European democracy. "Money in politics is not a strictly American phenomenon. In France, despite strong campaign finance laws, campaign donations have a direct influence on legislative and municipal election results", they candidly put. Things turned shady with Macron's electioneering. The republican tradition of "One person, one vote" was replaced. Cagé stated plainly: "one euro, one vote in reality as Macron's election was largely funded by private donations, unlike those of other candidates. This case begs the larger question: can campaign spending influence elections, even in countries that have limited campaign spending by law?" On the rising inequality, she cautioned, "money may increasingly corrupt politics. Such a risk explains why, in the majority of the developed countries, there is legislation to control and limit the amount both firms and individuals can give to politicians, political parties and electoral campaigns. In the United States, where most of these regulations have been removed during the last decades, mega-donors fuel the rising costs of elections"

The forthcoming paper warns of ill-effects of private donations that "represent a much higher share of funding for right-wing than for left-wing candidates in both municipal and legislative elections. On average, right-wing candidates receive an extra €3,400 in private donations for their campaign in municipal elections compared to left-wing candidates, while candidates from the extreme left and the extreme right receive nearly no donations. This extra €3,400 translates directly into right-wing candidates getting €4,200 more in total revenues, and spending €3,000 more for their campaigns. While these numbers sound small compared to donations and spending in American elections, they are quite significant in France, where average campaign spending per candidate on municipal

elections is only €22,000

per election". The authors found how money in campaign

cast a "significant impact on votes, both for municipal and legislative elections" and impact of this is "robust in controlling for the endogeneity of spending."

(The views expressed are strictly personal)