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Re: Some more research needed (campaign contributions)

> On electoral reform, KUSH KHATRI wrote:
> Regarding contribution to parties at no time can a party have
> morethan half 1/2 of its total contributions from corporations.
> What do you say Charu, do you agree?
> >On Fri, 31 Jul 1998, Charudatt wrote: 
> > My short answer is:
> > I think this is an excellent compromise and would go along with it.
---Sanjeev Sabhlok <sabhlok@almaak.usc.edu> wrote:
> Two concerns:
> a) My question: I go by principles. What principle was used to
determine this ad-hoc number? Any derivation from micro-foundations or
philosophical principles?  According to me there can be no limits
imposed unless there are very strong and very powerful reasons for
that. This reeks of the ad-hoc interventionism in everything that is
the favorite hobby in India.  Prove to me that the Kush forumla is
theoretically and empirically sound.

Sanjeev, there you go again!  This is not "ad-hoc interventionism" but
is based on the definition of democracy that we had agreed upon.  On
the one had you believe in individual autonomy (basic to democracy),
on the other you see no problem in a corporation competing, and
thereby, severly limiting an individual's autonomy.  Democracy means
competing interests.  However, competition has to have some sense of
justice or some kind of a level playing field.   What you are saying
Sanjeev is that if an individual in a democracy cannot give a good
fight to the Mohmd. Ali's (corporations) of this world, then too bad. 
By the same token, in your future democracy should the State provide
legal assistance to an individual in a criminal case?  Why is legal
assistance provided to an individual in the united states in a
criminal case by the very state who is prosecuting the individual? 
Because most individuals do not have the resources that can match the
State.  It will be a mockery of justice if these people are tried
without some kind of a legal representation.

Regarding corporations as equal entities, Charu has raised a
legitimate issue.  And for your information the corporate issue is
very much alive in the USA even as we talk.  How Americans resolve
this issue will be of interest to democracy watchers everywhere.  But
why should we wait for them to resolve this issue.   The point is what
kind of society will the future democracy of India create if we set NO
limits on corporate power. We agreed that to deny corporate
contributions will be wrong.  We also agree that money does have
influence.  Please keep in mind that Americans are just beginning to
see the inordinate influence of corporations and corporate money in
American democracy.  Just yesterday, the House voted on Shays_Meehan
Bill.  This Bill has yet to go to the Senate and I am not going to go
into the details of this Bill.  The basic point is that Americans are
just beginning to tackle the problem of money in American democracy.
What should we do then?  Wait for them to come up with the answers on
a website? Or should we show some leadership and creativity and find
some answers of our own? 

> b) How about the feasibility (the process)? The process is the key.
How will you determine and impose such limits? What mechanism can you
devise to not drive contributions underground again. No ad-hoc limits
have so far  worked in the history of mankind. Which system design
supports this limit? 

The thousand dollar individual limit did work.  I do not know what you
mean by "system design."  A good audit system will work.
> I was asking for transparency. You also wanted it. This limit, in my
view, will drive transparency out once again, and very quickly. Do not
empower a  petty bureaucrat somewhere to set and "impose" limits (ie.
to get his bribes). 

The people decide on these limits not a "petty bureaucrat."  We are
the people in this case.  And if Charu's and my commonsense, value
based argument is presented to the people of India, regarding
corporate power, most reasonable people will agree to this threshold.
Like economics are you proposing a liazes faire vis-a-vis political

> Since the topic is so confoundingly difficult, I would propose a
> Let us fully and in detail examine the system of funding in USA. A web
> site which gives detailed campaign finance accounts for the Republic
of California is available at: 
> > 	http://www.soc.american.edu/campfin/cafec.html
> > I would like to read a few books/ papers on this topic (if I get the
> time), as well as request others to do so, and to examine the full
> accounts of American campaigns (freely downloadable from the web site
> above) and come back in a couple of weeks. The system design in USA
seems  to work fairly well. Let us take a close look at it.

Yes, take all the time to read.  But please realize that money is
number one problem in American democracy today and American people are
barely waking up to the dominating power of the corporations.  As I
said, we do not have to wait for some studies to come out of
Americans.  Let us do our own thinking, use common sense, and please
realize that some value judgements will have to be made.  As Charu
pointed out all is not just a n academic, logical, process.
As a matter of record, I do not completely share Charu's view
vis-a-vis corporate structures.  Moreover, future Indian democracy
must give more rights to the shareholders and the general public (to
bring public interest litigation against corporations, for example). 
Charu: You cannot have large organizations and not have some kind of a
"supreme" or central control and command -- in the sense that some one
has to make critical decisions.

> Charu: I cannot unfortunately repeat this discussion again. In my
'book' I do hope to spend considerable time on this topic since the
confusion that exists about corporations and corporate power is just
too enormous. Until then (and maybe till after then), let us agree to
disagree on this perception about corporations/ firms. 

I will buy a copy of your book.  We may disagree on our perception of
corporations, but I think we do have an agreement that corporations
are NOT individuals and that corporate resources can any day outdo an
individual.  Therefore, to create a reasonable playing field, which a
democracy demands, we must curtail the power of corporations. ONE way
of doing is by not allowing the contribute more than 50% of what a
political party is able to raise from the people.

> One parting shot: I will throw you a homework exercise until then.
Design  a contractual arrangement which will - optimally - be able to
research, design, build (produce), and sell, a massive jumbo jet. If
you can design  anythign better than a corporate structure, you will
be GUARANTEED to get  a Nobel Prize. I promise you. No one has yet
done better than a corporate design. You would be the first and only
one to come up with another  structure to take the human race forward. 

I do not know what the point of the above is.  In any case, IMO, Charu
does deserve a Nobel Prize and I will support him any day in getting

> Corporations are contracts - which are essentially designed to solve
the SAME problems as in the case of a tiny village artisan's
relationship with his two employees, and in Boeing or IBM. Period.
Contracts (explicit and implicit) - in the social world - are like
atoms in the physical world. These are the building blocks of human
interaction. The issue is the design of optimal contracts.

Says, who?  The spinmasters of the corporate world perhaps.  I think
you are streching the "contract" theory to the point of distortion.


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