Lobbyism — Good or evil?
This week I want to elaborate further on lobbyism as a political practice. The term “lobbyism” is often connected with a fairly bad reputation in public. We have to recognize, though, that it has a legitimate purpose and an important function in a working democracy which I want analyze just as thoroughly as the dangers it poses to the public interest. Because it turns out, that the answer we give to the title question can be understood as the symptom of a much more profound decision, that we as a society have to make.
But let’s start with the basics.
The term “lobbying” originally dates back to the 17th century British Parliament, where politicians would meet members of the public in the lobbies of the chambers. Since communication was different then, it was important for the members of parliament to be able to exchange ideas and receive feedback from the public. However, it was only in the early years of the United States of America that the term came to the meaning and usage it has today. It was in Washington that the lore of people waiting in the lobby of the Willard Hotel to make generous offers to president Grant came up and it was in several states that “lobbying” appeared in newspapers in regard to state politics. The Gilded Age at the end of the 19th century saw a peak in unregulated lobbying based mainly on personal gifts and even bribes. From then, when lobbying was discreet and on a very personal level, to nowadays, the process of seeking political influence went through a big change with Lobbying Disclosure Acts providing more transparency and clearer guidelines. However, the main purpose and frameworks prevail.
As it was with the English members of parliament, who relied on the casual chat with citizens to gain awareness of public interests, it is just as legitimate and important for the private sector today to advice and convince politicians of their points of view. Often neglected in the discussion is that not only economic players can seek influence, instead it is a way for all interest groups such as environmentalist or pacifists to provide detailed advice and expert knowledge.
Furthermore, I believe we should consider the important role the economy played in the development of the United States and basically every other country in the world. The principles of hard work, efficiency and free markets are the driving factors for the wealth we enjoy today. As we know, they didn’t thrive because of political leaders, but because of private companies and individual initiative. For that reason alone, if seen objectively, the economic players should be granted certain influence on political players, because politicians could tend to neglect the importance of the fragile market system in their pursuit of say, health reforms or environmental campaigns.
This being said, we have to look at the reality of lobbyism in the western world and suddenly the picture changes tremendously. The history of Lobbyism is a history of fraud, bribery and illegal influence, because ever since people had their own opinions they knew how to convince others by addressing their ego, creed and weaknesses.
Be it the historical case of Sam Ward, who was the first to be convicted of bribery in connection with lobbyism in the 1870s. Or the infamous Citicorp case in 2013 when 75 lines of an 85-line-bill regarding softer regulations were literally written by Citicorp lobbyists, as the New York Times reported. Without a doubt, the indirect kind of lobbying we discussed in the Goldman Sachs articles certainly belongs to the suspicious practices that destroy the reputation of lobbyism, undermining the integrity of politicians and lobbyists alike.
In Europe, or Germany especially, the car manufacturing lobbies are famous for blocking any new environmental legislation, because the “gas-guzzling-cars” segment gains the highest profits. In the myriad of cases we can analyze, where corporations specifically lobbied against a bill that was designed to protect the health, wealth or well-being of citizens, it becomes hard to see the good part of it. Obviously those companies protect their market interests, an important standpoint as we saw earlier, but they do so without any regard to the environment or the people. As companies they strive for profits, not for a better world. And in doing so they exploit the worst feature of lobbyism: The lack of transparency.
This realization brings us to the last part. Finding a healthy balance between corporate and public interest as well as using the framework of lobbyism for the best. To do that we have to understand the problems its current form has. Two questions are quite revealing in this regard.
First, how can companies really influence a politician’s opinions? Would it be only financial contribution to their campaigns it would be easy to measure, but we all know how important relationships are, especially in politics. Companies or their respective lobbying firms can provide insider information, build relationships and influence the public opinion about a topic or a person. Furthermore, under the mask of providing “expertise” they are often granted direct access to the writing of bills, like in the Citicorp cases from ’99 and ‘13.
Second, how do corporations profit from lobbying? Studies came to the result, that the Return on Investment in lobbyism is some 22000% (yes, those are three zeros), saying that for every one dollar spend a company receives, in one way or another, about 220 Dollars more in profits. But these studies, in my opinion, do the impossible: they quantify the gains of a corporations from lobbying. There are so many, sophisticated and farfetched ways corporations benefit from influencing public office. Sometimes the returns are far away in the future. Sometimes they come from minor changes in legislation, which is not even connected with the field of business of the respective corporations. And sometimes, the profits can really only be found in extended knowledge.
With all the negative judgement lobbyism receives there surely are solutions around, that the critics support. Some don’t support any kind of lobbyism and want to split politics and economy completely, but we have seen that there is a legitimate purpose behind it, which we don’t want to defeat. So what can we do?
The main ideas around can be generalized into three parts.
Most importantly, Registration should be mandatory for all interest representatives in every country. These registers need to be public and cover the influence of outsiders on all governmental institutions. Furthermore, the term lobbyist needs to be redefined to a broader view, whatever intention they might have (Think Tanks, NGOs, law firms, etc.). Another powerful form of registration is the legislative footprint, that would require every party (interest group) that influenced a bill to be stated in the publication of that bill.
Secondly, along with the register there must be a code of conduct for lobbyists as well as politicians on how to deal with conflicts of interest. These codes should lead to fierce sanctions in case of failure to adhere. Included should be a tight regulation on the revolving door as well as very limited allowances for monetary support.
Thirdly, the media and the public should be motivated to report more on the workings of lobbyists and politicians. They should do, what they do best. Research and question everything, which is going to be much easier once the registration is comprehensive and mandatory. This way immoral intention and illegitimate conduct become a matter of the public.
A more radical solution that goes to the core of lobbyism is to completely ban money out of the process. It is the information that should be provided, not the money. If the information comes without any second parameter, the politicians can decide rationally whether or not it is worth considering. In doing so we could assure that financially weak lobbies like environmentalists, pacifists and social organizations are heard just as loud as the big corporate associations. If companies want to be heard they publicly propose their ideas and arguments so that, assuming the idea is reasonable, the public opinion in that matter is influenced as well. Once the broad public supports something the motivation for a politician to act is just as high, as if money was involved. But then it’s democratic, it’s sustainable and it’s transparent.
Everyone can and should work out his own idea regarding a “good” form of lobbyism. Because if we think it through to the end, we can render a much more general question out of the lobbyism-discussion that I want to ask you:
How much do we as a society want to be commercialized?
At the end of the day, do we want to be a sustainable and democratic knowledge-society or a roaring production plant?