Investment Theory of Politics: a theory that the state is controlled by coalitions of investors who join together around some common interest.


Thomas Ferguson has taken this avenue of argument the furthest. Ferguson has developed what he calls his "investment theory" of politics. Basically the argument is that by tracing the source of campaign funding to the parties and their candidates, you can predict the issues the parties will push and their policy positions once in office. "The American political system is not … driven by votes. Public opinion has only a weak and inconstant influence on policy. The political system is largely investor-driven, and runs on enormous quantities of money" (Ferguson, 2001, 235-236). The policy agenda is attuned to the concerns of the investors and it is distinctly one-sided.


"…most of American business and the superrich have espoused increasingly radical versions of "laissez faire" economics…demands for tax "relief," freedom from regulation, cuts in social welfare expenditures, labor cost reductions and tighter control of increasingly decentralized production systems dominate the funder's consciousness and thus public consciousness. Epitomized in the buzz word "globalization," this "Neo-liberal" political ideology has had essentially no rival in the Anglo-Saxon countries…For these sectors, "compromise" means foregone profits. They are, accordingly, unbending and expect their political mouthpieces to be similarly unyielding." (Ferguson, 2001, 235-236).


Ferguson believes both parties are subject to these economic forces and what he refers to as "the catastrophic nature of the American campaign finance system" (Ferguson, 2001, 237) serves to promote inequities in representation and influence. Accountability in this scenario goes to those who fund the parties and their campaigns.

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