Party funds: Paying for political favours

Political parties exist because there is a need for them. They are not, as the common view has it, simply groups of like-minded individuals coming together for the sake of tribalism and a shining ideal, but are, as our own declaration of principles observes, an expression of class and material interests. As capitalism has developed, and social activity has been subjected to ever greater atomisation, complexity and division of labour, so too has the workload for the ruling class in maintaining its system. The state arose from this need of a privileged property-owning class to co-ordinate between themselves and ensure that the property system is properly maintained.

The amount of work involved in administering capitalist society means that it cannot be handled personally by the capitalist class themselves. They require other people to do that work for them, and thus require a political structure which enables them to enforce their general interest and ensure that the state workers who staff this structure do not turn against them. The main means they have for ensuring this are the funding of political parties and the election of some of the administrators.

This control needs to be exercise by the capitalist class collectively, in a sort of arms length way, to avoid individuals or firms being able to monopolise these positions and engage in what economists call “rent-seeking”, that is, using corruption to rake in money through bribes and kick-backs. Where people can cling onto positions of political power corruption sets in, as can be seen in Japan and Italy, where perennial coalition government meant that there was a job for life for incumbents and correspondingly limited promotion prospects for others. To keep the cost of administering society from becoming burdensome to capitalists, they need to ensure competition and turnover for the places of responsibility.

Maintaining control
This is one reason why advanced capitalist states need political democracy, as a means of applying a form of competition for the posts in the state administration. The regular change in state personnel through elections means that incumbents have little opportunity to exploit a monopoly on their position; and the intense competition for their posts ensures that they are pressured into fulfilling their function without rent seeking.

This has led to the emergence of what could be more or less described as firms, which compete for votes. They sell their brand of politics through advertising, and then hope that the results come in as votes. These political firms are themselves complex associations of people, employing many intellectual workers to come up with products (policies) and ways of marketing them. Part of the reason for these political firms, aside from the physical act of distributing the party’s message, is that the complexities of modern administration require equally complex bodies to analyse and control the system.

As the size and complexity of the system of state administration grew, so inversely did the capacity of the tiny number of politically active members of the capitalist class to securely influence it. It is in their interest, then, to ensure that a relatively potent layer of influence remains in as small hands as possible. This conflicts with the need for competition for posts, a contradiction which the capitalist class try to resolve through liberal democracy, in which a relatively small number of public posts are up for open competition and election, and the holders of these few posts in turn control the personnel of the state.

The structures of state prompt the elected politicians’ attempt to maintain a monopoly of power. Though they argue that they and not the lay members of their party have been elected to serve the public interest, this position has its real basis in the fact that once in office politicians are dependent upon other politicians for their continued ascent and advancement. Their interest lies in standing with each other and asserting the authority of office.

The few nationally elected politicians are then expected to exert influence over the whole state bureaucracy. Whilst the UK government does have numerous quangos appointed by politicians, it also has a standing civil service, which is supposed to obey the ministers without question. A permanent bureaucracy, however, means that individual civil servants are dependent upon its internal hierarchy for their advancement. Thus, the internal values of the civil service become the means of success, rather than adhering to the values of ministers. This sometimes brings civil servants into conflict with ministers, who cannot sack them. Whilst its permanency gives its stability, it does act as a partial break on ministerial ideas.

The solution New Labour has tried has been the appointment of special advisers, civil servants dependent upon ministers for their jobs and advancement. This had led to conflict between the special advisers and the permanent bureaucrats. The most high profile version of this was the Jo Moore saga, in which the civil servants fought a guerrilla war to remove a special adviser.

Whether it is special advisers or permanent civil servants, ministers find themselves more dependent upon their office and its associated staff than with the party machine that brought them to power. The Socialist Party has always argued that leaders and followers will inevitably betray each other, because they come together with different ideas about where they are going. The leadership system relies on a difference between the information given to leaders and led, which means the two sides are not co-ordinated in their aims and actions.

Rich private donors
This situation is complicated by the interests of the people and organisations which maintain the material basis of these parties. In the 18th and 19th centuries, politicians had funded their own careers from their own means. As the political system expanded, however, the material independence of politicians has become untenable, and so they require coalitions of social forces to build movements.

For the Tories historically this was think-tanks and bosses’ organisations, for Labour, the unions. These people provided the cash necessary for keeping the political parties up and running. The flow of their supplies of money provide a counter-balance to sheer democratic forces within the parties, ebbing and flowing with disapproval or approval over policy. It is this basis which means that political organisations represent specific economic interests. The funding organisations will only give if they see a benefit (even in general).

That these donors have an interest to defend, separate from the pure electoral interest of the political party, means that they too need intellectual workers to define and promote their policies for administrating capitalism. They can then use access to the media to promote their rival ideas and harass the government.

Seeking a middle way between failed Social Democratic reformism and free-market Toryism, Tony Blair broke Labour out of the previous convention and went into competition with the Tories for getting funds from rich individuals and capitalists. Donations from individuals would free the politicians in the party from organised interests and from the membership of the party at large. The scale of this can be clearly seen from the returns made by the Labour Party to the Electoral Commission for its donations. In the first quarter of 2002, it received £2 million from Lord Sainsbury (who happens to have been ennobled and raised to the cabinet by Tony Blair). Likewise in the second quarter, they received £200,000 from Bill Kenwright, owner of Everton Football club.

This competition for private donors, however, means that the respective parties accuse each other of sleaze and bribery, the very corruption political democracy is meant to prevent. When it was a case of the Capitalist United against a party purporting to represent a clear trade union interest, not a peep was raised about the funding of the Tory Party, but now Labour are in on the act, the press is filled with stories about donations to Labour from capitalists like Ecclestone, Mittal, Hinduja, Desmond, etc. Hence why some sections of the Labour party and our masters in general, are beginning to look at state funding as a means of drawing dependence away from specific individual capitalists but to their class as a whole.

Another cause for the floating of this idea is that individual donors have been put off by the publicity attendant to making a donation, as well as certain donors feeling disillusioned with the government. In the first quarter of this year, Labour received £3.4 million in donations, £800,000 of which came from unions, and £2.5 million from individuals (including Lord Sainsbury). In the second quarter this slumped to £500,000 with £180,000 coming from unions and £346,000 coming from individuals.

Part of this reduction is also down to reductions of donations from trade unions, (such as the GMB, RMT and FBU unions, which are all examining the use of their political funds) although it is clear that their donations continue to be the basis of the day-to-day running of the Labour party at large. Indeed, the Guardian (9 August) reports that unions voted to give Labour £100,000 as an emergency grant to cover day-to-day costs in the face of the current funding crisis.

Desperate though they are to escape from the interests of the trade unions, the Labour leadership find themselves having to go back to them to keep the machinery of their party afloat. The unions form the basic material basis for the existence of the extended Labour Party. It is this that Mandelson wants to bring to an end, as it limits the party’s capacity to manoeuvre between capitalist camps.

The importance of this is not the day-to-day worries of the Labour Party, which can be surmounted temporarily, but to see that vast amount of effort put into maintaining the capitalist political machinery. The interests of a tiny number of property holders run counter to the existence of real democracy. Socialists have long argued that the capitalists’ need for an elected machinery, that necessarily requires the active involvement and support of the workers, means that we can organise as a class to take control of that machinery to bring an end to their system.