Tuesday 27 March 2012 7:16 pm

It’s not just the wealthy who should be kept from influencing politicians

YOU should not be able to buy political influence for £250,000. That is the consensus following the Conservative Party’s donations for access scandal. Well, then, how much should it cost? The popular answer is that political influence, like the NHS, should be free at the point of use. In a democracy people influence politicians by voting for or against them. And we need not pay to vote. No one laments the voters’ political influence, nor seeks to restrict it. On the contrary, the one man-one vote system is considered the foundation of a decent society and citizens are endlessly beseeched to become more engaged with politics. The supposed virtue of this kind of political influence is that it encourages politicians to obey the will of the people (or, at least, of the largest minority of voters) rather than the will of a tiny wealthy minority. So it does. But we should still resist this kind of political influence, because obeying the will of the people leads politicians into grave error. The problem arises from the fact that the average income is higher than the median income – or, in other words, most people earn less than the average. This makes progressive taxation an electoral “no brainer” for politicians. By taxing high earners more than others, they can bestow gifts on a majority of voters. And who won’t vote for a gift? A society in which the majority receives gifts from the government may sound wonderful: a veritable miracle of democracy. In fact, it is a recipe for waste. Spending is wasteful if what it buys is worth less than it costs. When people buy goods from private suppliers, waste is unlikely. The price will usually be no less than the cost of production, since otherwise the supplier would go broke. And its willing purchase at this price means that it is worth more to the consumer. That is why free markets are efficient. Now consider a political spending decision when tax is progressive. Because most people contribute less than their share of the cost of government spending, they favour it even when it is wasteful. For example, the tax bill of most parents will increase by far less than £1,000 per child for such an increase in government spending on education. So, even if they would not be willing to pay more than £800 for this measure – even if it wastes £200 per pupil – they will vote for it. The logic of democracy thus encourages waste. After about 100 years of universal suffrage in the West, the waste is now massive. If the allegations against wealthy political donors are right, they are only trying to do what the majority does brazenly in a democracy; they want politicians to use the power of the state to bestow gifts on them at the expense of others. It is not surprising. So long as politicians can play favourites, people will be queuing up for favours. We do not need rules about how people can get to the front of the queue; we need strict constitutional limits on the favours politicians may do anyone. Jamie Whyte is a senior fellow of the Cobden Centre.

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