 Great, well good afternoon, and welcome to this forum debate on money and influence. I'm Nairi Woods, Dean of the Blavatnik School of Government at Oxford University, and I'm delighted that we have with us here to debate the issues that come out of money and politics. We have TJ Styles, author and historian here on my right. We have Anthony Scaramucci, who is the founder and managing partner of Skybridge Capital, and here on my left, Kenneth Rogoff, who's a professor of public policy and economics at Harvard, and on my far left, Professor Joseph Stiglitz, professor at Columbia University. So the first thing I'd like to do before we even engage in the elements of this debate is get you to have a little vote on whether you actually think that, and I think the question should come up in a second, but the question is, is democracy being corroded by wealthy individuals and corporations? So you've got a little machine next to you, and you can press I think it's one for yes and two for no. So you can press it as soon as the little green bar comes up. They can vote now. Where you go? Have a quick vote. Is democracy being corroded by wealthy individuals and corporations? The United States survey. Okay, so that's a really interesting result. 64% are saying yes, and nearly 36% are saying no, and just to contrast that with the Facebook community that have replied before they've come, 134 thought yes, and 11 thought no. So we're better placed to have a robust debate about that today. So before I turn to our panelists, let's just think for a minute about what we expect of a democracy. We expect a democracy first to be representative, so to represent all the classes, races, minorities, majorities in a population through the electoral process. We expect, secondly, we expect a democracy to constrain the rulers and require them to stick to the rule of law and protect minority rights. That's why we need independent courts and judges. And third, we expect in a democracy to help hold a government to account counterbalancing interest groups. So yes, associations of companies on the one hand, labor unions, associations of workers, other kinds of interest groups, counterbalancing one another. And finally we expect a free and well-informed commentary, whether it's Twitter, blogs, newspapers, the media. These are things that hold a democracy honest and accountable. So the question we're looking at today is when inequality rises in a society, what happens to those four? Does a really, a more unequal society mean that the wealthy can simply buy the representation that they want? Does it mean that they can buy top lawyers and always win in the courts? Does it mean that they can fund interest groups that pursue just their interests? Does it mean that they can buy the media, buy the television stations, buy the newspapers and just control the debate through that means, or is rising inequality creating a new plutocracy that is investing in all of these things and actually strengthening democracy by bringing more force to a plurality of debate in all those realms? That's what we're here to debate today. And I'd like to start by turning to Anthony Scaramucci. What do you think, Anthony? Do you think that it is possible that money politics is actually strengthening democracy? And I'd say, today we will be focusing quite a lot of our panelists on America, that's where each of the panelists is working and commenting for the most part, but I'm going to be calling on you regularly, so I want you to really prepare your comments to make sure that the debate also takes the points made by our panelists to the different parts of the world that you're from. So Anthony. Well, just to draw some historical context, in our, the founding of the nation, we've always had money involved in politics in one shape, way or another, and so I can remember John F. Kennedy making the remark at a press conference when they said that your dad is going to buy the election, the 1960 presidency, and the president quipped that, yeah, he's going to certainly try to do that, but he's a tight wad, he's not going to pay for one more vote that I need, and it's sort of softened the issue for President Kennedy. His father said that he was going to sell him like soap flakes to the people of the United States, and if people remember the election in 1960, it was a very, very close race. I think he won only by 100,000 votes. Flash forward 50 years after the Citizens United Supreme Court case, I think the court has decided, at least the majority of the justices, that the money can be an effect of bullhorn for people. You know, it's my belief that the entrepreneurs in our society, the political entrepreneurs were against that. There's no doubt that there is some corrosive effect, but sometimes when there is a corrosive effect, you get a reaction that is quite positive, and I think you see that in social media, you see that in Twitter, and my prediction is that both sides, at least in our country, will figure out ways to raise enough capital for each other to get their ideas out. And just one last point, the Republicans spent a billion-plus dollars in a number of different elections, and tons of PAC money was spent in the United States in 2012, and I will tell you, I think it was a very little effect on the overall election there. I mean, you had a very successful hedge fund. It's a flourishing sector in the United States. What's the most effective way that you inform and influence government policy in the United States to make sure that your sector flourishes? Well, you know, to be completely candid, I am less interested in the flourishing of my sector and more interested in the flourishing of the society, because at the end of the day, if you're putting the people first, good things happen in a society. And so my thing is, and I'll give my voting history so people can understand, I went to law school with President Obama, I bundled for President Obama, and I voted for President Obama. In the second season, I bundled for Governor Romney. So I just want you to know that I'm an eclectic person. I describe myself as socially inclusive and fiscally responsible. So you notice I didn't use the word socially liberal and fiscally conservative because I believe that those are labels and possibly pejoratives. And so what I've looked for is really in the person and in leadership. I voted for President Clinton twice, and if Mr. Clinton could run again in 2016, he would get my vote and certainly my support. So I'm really looking for the best people who are interested in serving the nation as opposed to themselves. So yesterday, Tom Friedman in a debate said, in the 1980s, the heads of big American corporations would go to Washington with well-prepared views on a whole range of issues, immigration, education, the big issues facing the nation. What's happening today is that they fly in in their private jet, land it in Virginia, sneak in at 6 a.m., argue for the one amendment to a piece of legislation that directly affects their business and sneak back out before they're noticed and tweeted about. Does that ring true to you? Is that what, is Washington this place where one simply goes to protect one's own interest or do you think you and your colleagues and other corporate heads in the United States are engaging in the public policy debate? I certainly think what you're saying is true. There's no question that there's an aspect of that. I'm getting older now so I'm trying to be less cynical. I'm optimistic about reaching people. I think one of the things that President Obama did in the 2008 campaign is that he built an entire new base in the Democratic Party and his message was something that people embraced. And if people will remember their political history, he was down 23% in the polls and Mrs. Clinton was up 24 million in the fundraising. And he managed to figure out a way through great political entrepreneurship to change that. And you're right. Listen, we spend five and a half billion dollars in lobbying in the United States. And is there any reason why? There's a lot of corporations that are feeding off the trough of our government. People sometimes call that crony capitalism. I can always speak for myself and some of my friends that, in terms of the way we have tried to support things. For myself, I'm committed to the lesbian and gay marriage movement and lesbian equality. That rings totally against the Republican Party even though I'm a registered Republican. Okay, well I'm gonna now bring it to thank you. And I'm gonna bring it to TJ Styles. TJ is a historian and you've traced the role of money in politics. And I just wondered, is the role of big money in politics, has it changed in the last couple of decades? Well, yes, I think so. In a market economy such as in the United States and much of the world, the engine of growth and of prosperity is also the engine of inequality. And so there is an inherent danger that's wrapped up in our very success. And that is the corporation. So the corporation is something that has wielded enormous influence and power and at times it has grown to great extremes in American history and then been constrained. Now, what is the balance against the accumulation of great wealth and of great power in these private, unelected, in a political sense, irresponsible, not morally, but not responsible to the electorate. Irresponsible organizations, it is a strong cultural centers of criticism. That we need to have great wealth and we need to have the critics of great wealth. And part of the reason is that no one exactly knows what regulations, what constraints are going to make sense 10 or 20 years from now. As I look at history, I see that the debate over the economy, the way we even conceptualize things like the corporation, securities, equality, these things change. So the only way to find your way forward is a marketplace of ideas. We need robust criticism and competition. What concerns me about the present are two things. One is that the corporation, which continues to be an engine of growth, continues to be necessary, continues to produce wealthy individuals. One, it has gone global, which means that it is often able to escape, not only capture regulators, but also escape regulators by crossing national lines, and then that poses a challenge to democracy. The second thing is that we've seen not directly through corporations, more through the combination of wealthy individuals and corporations. An attempt not only at regulatory capture, but at cultural capture. In which we've seen in the United States with the allowance of, by the Supreme Court, of not only corporations donating to politics, but of anonymous unlimited donations through so-called social welfare organizations, etc. We see in the United States a strong effort to influence local elections, to influence the law through such things as the Federalist Society, to lobby academia, to try to pressure academia to be more conservative. There is a kind of a full court press culturally speaking, which is creating pockets, as The New York Times recently reported, of total party dominance by one party or the other. And that is not good for anyone. And over the long reach of history, is that going to write itself as a self-equilibrating force? Well, this is the problem is that, again, the reason the United States, it's speaking specifically about the United States, has bounced back from extremes of inequality, and because it has a robust democracy, because there have been strong centers of criticism for the dominant economic and political and cultural forces. And if we start to weaken those centers of criticism, the unions, for example, yes, they lobby specifically for the economic advantage of their own members, but they also are sources of financing and of speech that criticizes the agenda of certain corporations. No, that's not, again, I'm not criticizing corporations as across the board and saying they're bad. I'm saying we need competing voices in the culture. And so right now, what worries me is that we see, mainly through politics and political efforts, very strong full court press, which is very concentrated in certain regions, especially. And that's not good for American democracy. So Anthony mentioned $5.5 billion of corporate lobbying. What's the figure for other groups in the United States? Well, I'm not sure about that. I couldn't give you the current statistics, so I won't pretend to. But I will say that, again, it's not simply a matter of, say, spending. You mentioned spending in the last election. You're right, Mitt Romney failed with a minority of the vote, not simply losing to a plurality, but to an actual majority. But what do we see? The House of Representatives through gerrymandering, which has been a devoted campaign by conservative groups to take control of state legislatures by really pushing hard for these lower level elections. And American democracy is very much controlled from the state level in many ways. So I'm not... It's from gerrymandering, I think, for people that are not from the United States. Oh, gerrymandering, yeah, this is very good. Thank you very much. Gerrymandering is an old American term that goes back to a Massachusetts governor named Elbridge Gerry. And the state legislature designed a district that included a majority of his constituents, those who supported him. And they said it looked like a salamander, so they called it a gerrymander. And so now, through computerized technology, American electoral districts, especially, you know, the House of Representatives, one of our houses of Congress, and state legislatures are now these elaborately, bizarrely drawn districts, excuse me, in order to allow one party or another to control the legislatures. Both parties do it, but in the last presidential election, national election, the House of Representatives, the GOP actually got a minority of the popular vote, but they have a large majority of the House seats. So this is the kind of thing, when it goes down to the local school board and local level. And, you know, this is what's corrosive to democracy. You know, this attempt to sort of, as we say in the United States, to work the ref, to try to get the referee to go to your side, pressuring the media, pressuring academia, trying to suppress unions, trying to control the vote through voter ID laws. And I think we need a robust debate, and that's the threat, is that political money is flowing into more areas than simply promoting speech. It's actually trying to dominate the cultural landscape and the political landscape down to a very granular level. Thank you. Who thinks that's not a concern? Who's less concerned with T.J.'s picture of a narrowing spectrum? I guess I won, I... No. Okay, well, I'm gonna, I'll come back to you. Let me come then to Joe Stiglitz. You know, have Americans lost their government? Have they lost it to special interests? This is, you know, the world looks to America to be government of the people, by the people for the people. Have they lost it? To some extent, I wrote an article that got a lot of attention that was called, this line of government of the people by the people for the people is a line out of a very famous speech by President Lincoln in the middle of the war between the stakes, rallying the troops. And the title of my article was government of the 1%, for the 1%, by the 1%. And it was reflecting the fact that economic inequality can easily lead to political inequality. And just like economic, you know, the extent to which economic forces get translated into economic inequality depends on the rules of the game, the extent to which economic inequality gets translated into political inequality depend on the rules of the game. And the rules of the game, unfortunately, are set by, to some extent, existing power. So the system can be one which basically results in the kind of underrepresentation of some groups and overrepresentation in terms of influence of other groups. And this is really, when you laid out the context of what you called representative democracy, I would say, you know, are we losing it? On all four of those categories, I was going to say yes, yes, yes, and yes, we are losing it. Give us an example. I was going to begin with the most important one that all of us would talk about is representation. Are all the voices being heard? Can everybody vote? Now, in the United States, we've had a history of an attempt at disenfranchisement, you know, of, for instance, not allowing people who are unemployed to work. Mike sounds strange, but there have been histories of that. You mean to vote? Trying to disallow them the right to vote. The most recent initiatives in the United States are very much making it more difficult for people who are from certain parts of a, more likely to vote democratic to vote. And so there have been really concerted efforts at what I call disenfranchisement. But there's a broader sense, which is not, you might say legal, but by making people feel that government is not representative, they say why vote? So one of the interesting things, you know, we talk about pride in American democracy, in the last congressional election, the 2010 election, the percentage of young people, young people you would think are the people who have most at stake in making sure that our society works well. After all, people in the 70s don't have that much longer to live, but people in their 20s have a lot at stake, only 20% of them voted. And overall, the percentage of the voting turnout in the United States is very low. And it's not only low, it's not randomly low. The poor people don't vote, and there's a concerted effort to make it more difficult for them to vote. Now, so one of the proposals that I think, you know, and a lot of the money, we talk about money, goes to making sure that your supporters turn out to vote, and the other guys don't. So that's where a lot of the money goes. So one of the interesting reforms, the rules of the game that I think could make a difference, is the Australia system where you're required to vote. And not everybody, even if you does vote, but their voter turnout is over 90%. And when you go to the poll, once you are at the poll, you're more likely to vote for what you're concerned with. It still is a problem of capture, of media capture, of distorted people views, selling bad ideas. So I don't want to say that that levels the playing field, and that was the fourth question you asked in terms of, you know, access to information, access. But that by itself is an important reform. Do you all think that's a good idea? Compulsory voting, how does that strike you? And you have to vote. Yeah, you have to vote. So how many of you live in a country where you do have to vote? Okay, so do any of you hate being forced to vote or dislike it? That's all right for all of you. Okay, what about the rest of you? How do you think about compulsory voting? Is there anyone that thinks that actually no, you should have the freedom to choose whether you vote or not? Yes, so tell us. I think it would take the average public company about 75% of the shareholders vote. The others are happy with the administration. It doesn't strike me that it's necessary to go to vote for democracy to work. A lot of people are generally happy. And I think further political agitation may not increase the pleasure and well-being of society. Thank you. Can I just make one more comment about that? But if you look at the satisfaction with the public process in the United States, the view of how well Congress is doing is about 8%. I think it's what the, you know, maybe it's 10%. But it's really not reflecting. The reason they're not voting is they're saying, oh, what a wonderful group of congressmen we've elected. Yeah, John McCain says that they're down to paid staff and family members as a form of approval. I think he's lost some of his family members, I think. I just want to take one more comment from the audience. Who else had a comment on compulsory voting? Yes? I just want to follow up on Dr. Stiglis' comment in that although 8% are dissatisfied with Congress, I think 80% are satisfied with their own Congressmen. That's why the people keep getting re-elected to Congress. Right. There are so many of the tricky things, aren't they? Well, there's a sense of futility both. I mean, there's shareholders in the United States are not known for particularly having a lot of influence in the way corporations are managed. Certainly most Americans feel as if they have very little voice in the way the government's run. No, that doesn't have to be so, but that's sort of a general perception, I think. Great. Ken, what do you think? Is rising inequality rotting the heart of American politics? Well, I don't think there's any doubt that globalization and technology or the driving forces behind why inequality is rising, you're seeing it all over the world. And I think that's something that governments are gonna have to adjust to, societies are gonna have to adjust to. I personally believe and probably, I think it's probably true for the stability of the system, government policy should mitigate the effects of this big change that technology and globalization is achieving and not exacerbate them. And I think there's a broad range of issues we could look at, but I particularly focus not at the 1%, but the .01% where huge pools of wealth are passed across generations with basically no taxation. The average tax rate paid is much lower than if you just move a little bit further down. And it's hard to believe that, that doesn't have something to do with political influence. And I, a great believer in innovation and entrepreneurship, it is very hard to believe that you need quite the extremes that we have. I can well imagine if things go on their current course as they might, Davos will soon be feasting on the first $200 billion man or woman. And maybe even in my lifetime, there's a little bit of inflation too. We'll see the first trillion dollar man or woman. And I just, I think it's corrosive. I think it's not just about income, it's also about education, many other things associated around that. But I have to say that I surveyed the political economy literature, I talked to my political science friends and maybe some of you are there. And of course it's actually quite complicated to prove that what I just said. It's a very nuanced, they're both sides. But anyway, it's hard to believe that we would see these very low tax rates on the ultra wealthy without some feedback through the political system. And can you just tell us why you think that not that permitting the 0.1% to pay so little tax corrodes democracy? Oh, I think it's happening because they have power and political power and it's reinforcing. And so of course the worst thing, I think the single most important thing in the United States is a sense that there's social mobility, a sense that after a couple of generations, everyone has a chance. And there's just a lot of concern that's not as much the case anymore. So what would the solution to that be? Do you think just? Well, it's not simple, but I think for sure having a different tax system I might scrap ours entirely if I had a choice. And I think even having a flat tax with a very high deductible and maybe some negative transfer for the very low income would actually be a lot more egalitarian effectively than the one we have. Education is just incredibly important. That's a big piece of where the inequalities passed from one generation to another. And I mean, I would absolutely say broaden education to say in all forms, my mother was a librarian and she used to complain that the state legislature didn't understand that adults need education too. And we live in a world where people may need to change jobs seven times and having various forms, not just traditional ones, but new media and such is important. So those who globalization technologies creating massive inequality, that's what governments should mitigate and those benefiting the most from it should be helping governments to mitigate. At the very least, it shouldn't be exacerbating the situation, which is I think what I would say is the case. And but yeah, to me, I mean, it's not so simple, but my take is that if we're getting the sweeping change, which is by and large a good thing for the world, that the governments need to take steps to try to mitigate its effects. And I don't think this is a one year or two year thing that I need to tell this group about. This is likely to go on for decades. So we're drawing out of this debate some possible ways forward. In other words, ways that democracy in a way might defend itself. Joe's put to us that everybody voting is really important. One way forward on that is compulsory voting. There are many other ways that we could think about taking that forward. Ken is putting to us that you've got to have governments that can mitigate the effects of inequality. And he's pointing to taxation as a way forward. Anthony, you've talked about the positive role that corporations can play and wealthy individuals in fostering a well-informed debate, but you have sort of conceded that sometimes they're overdoing it and that they're being too narrow in their interest. What's the solution to that? Is it to get corporations to vow that they will stop doing that? Is it to ban them from certain parts of the regulatory process? What to you is the way not to constrain yourself, but to constrain those corporate actors that you think are really pushing it too far? Well, again, my personal opinion, but there's a symbiosis between the corporation and the elected official. And so down deep, they're sort of playing each other and they're giving each other what they want. And so at some point, it's about political leadership more than anything else where we get some transcendental political leaders that will step forward and put the interests of the people ahead of that sort of reelection process in that cycle. And so the three things that I've always tried to champion is, one is equality, which is why I'm a big supporter of the civil rights cause for gays and lesbians. Two is the educational process that both professors are talking about. I'm the product of a public school education and a blue collar family. Neither of my parents went to college. And yet I've experienced the social mobility of the American dream because of their push and their sacrifice. If we can get more corporations to think like that, to promote equality and diversity in their employment base, but to also help children in areas of the United States where frankly they can't get a good education. Secretary Rice once said in a public speech, if you tell me the zip code of the child in the United States, I can tell you whether or not that child can get a good public school education. I think that's where the unfairness begins. And I think corporations have a social responsibility. One presidential candidate said that corporations were people too. I don't know if anybody remembers that remark, but if they are people, of course I don't think they are, but if they are, they have a social responsibility and they need to have more of a social conscience to promote this sort of egalitarianism. But is it right that hedge funds can pump billions into political campaigns? Can they buy their favorite candidates? Should there be limits on that? Well, you know, unfortunately there aren't limits on that. If you're asking my personal opinion, I think there should be limits on that, but what I've learned about the real world is I don't live in a normative world. I live in a world of is not the world of ought. And so I have to deal with the world the way it is. And so what I look for in people is real leadership and real leadership requires not thinking about yourself, but thinking about the other people around you and recognizing that together and creating more social cohesion, we can have a better society. And so you're right. There are people that are doing exactly what you're saying. They're lobbying, they're pumping billions into certain ideas that promote their own self-interest. But I do believe, and I just wrote an op-ed about this, I do believe that the message in the United States, the people are ready for candidates that are gonna tell them the truth where they have this aha moment, that person's telling me the truth. I'm gonna be able to vote for somebody that has a plan where I actually really believe what they're saying. And I think that will be the transformative moment. I'm a very big optimist on America. And I think that we have a tendency to re-engineer ourselves and I think we're on that path. Can I just make a couple of observations? A study that just came reported in the New York Times today. I don't know if you saw it. That on how low, how badly the United States is doing in economic mobility. That we are much lower than Denmark, much lower than other countries. And much lower than we think of ourselves. That there really isn't this land of equal opportunity. This is just another study collaborating, a whole set of studies that have been going on. The second thing I wanted to comment is, it's not just in the elections and in the campaign contributions, which are one of the things. It's in the whole way our government operates. So that for instance, when we go through the regulatory process, there are rules about how you make regulations, you have comment periods, the people have to respond, the government has to respond. Well, they're very technical and most of the responses come from the corporate interest. And the regulations about the regulatory process say that the government has to respond to all the regulations. But that means that if you underfund the regulatory body, they can't engage in really fair regulations. So we've created a regulatory structure which again builds in inequality. Joe, how do you get around that? I mean, you need regulators with expertise and they usually get expertise by working in the sector. You need comment on regulation that is expert. There aren't that many people in communities that have specific views on each portion of Dodd-Frank. So how do you get the expertise but without getting the capture? Well, you're getting close to something that is almost in my own self-interest. I think in academia you do have a lot of people who have expertise who are not quite so much of a vested interest. I think the problem is a real problem and I think I wanna reflect, there's no perfect solutions here but I think what we're saying is we've lost a certain amount of balance and we not need to tweak the thing to try to restore balance. So for instance, on this issue of regulatory comment, you need to, if you're going to have that process and it's understandable why you want that process, you have to fund the government agencies that are doing the regulations better and you have to pay the regulators better so that you can get qualified people who can write good answers to the regulations in different size. The second thing, I'm really picking up what you said before, you need to fund as a matter of public interest, public interest groups. So there needs to, that sounds strange, but government needs to fund public interest groups so to create the checks and balances. The inequality in our society has gotten to the point where in the unions have gotten weak enough, we don't have a equality in think tanks. There's more money going to think tanks on one side than the other. Can you again to speak on that point? Well, let me first pick up on the general issue of regulation. I mean, another, I think, very important element of inequality in the United States, people don't often think about comes when you look at statistics on obesity. Of course, there are people who don't have enough to eat, but by far the larger problem between the lower middle class and say the upper middle class is diet and education about diet, it's a staggering problem. We think at this group, when people are talking about lobbying, they're thinking about big finance, but big food, lobbies in this regulatory process for a lot of process foods and the way advertising is done for children. And this isn't a little thing. This is affecting their quality of life for their whole life. This is affecting life expectancy. What healthcare system? Well, I was gonna come back to balance this by saying I think it's also true that sometimes it's hard to measure inequality of consumption. It's a little harder because I think medical care is an example where there are innovations that come that the very wealthy have access to, but those innovations get passed through at very low prices 10 years later and there are many, 15 years later, there are many examples of that, particularly with drugs, but many other things. I think this is an example where that's not true, that their lifetime effects. And then I did wanna pick up on the public education. I mean, to me, this is just a frightening aspect of our society that we don't have ways to fund information for the public. There are many people from the media here keenly aware of how the whole process is broken down. And I see very important role for having the government provide public education. We see it in certain ways through public radio, public television, but one can imagine, as we talk about the internet, other things, there's a lot of opposition to that and it's very political that just politically we don't want. And I think that's a very important thing to overcome and so that when people are forced about and get their ballots, they have somewhere to turn to look forward to how to inform them at least of what the issues are. It's not necessarily how they should vote. And I wanna pick up on that, where it's kind of rotating around, that it's exactly the problem. First of all, we have insufficient funding, even a suspicion in many quarters of some of the sources of criticism that stand outside of economic interests. Public media, for example, public interest groups. Academia, which sometimes the funding is threatened because there's a criticism from the right that there's too many left-wing professors. So we don't wanna give a lot of money to public universities. There is the Republican Party and the Democratic Party both have their strengths and weaknesses, but we see currently, again, partially or largely due to gerrymandering and a very ardent ideological campaign by well-funded groups. Now, you see, especially in the Republican Party at the moment, not through any special lack of virtue but through the structure of politics, you see that the debate is who is more extreme than the next person. So basic things that Americans have always accepted is a basic responsibility of government, such as public education, which is a very old tradition in the United States. Now that has come under great attack and where a lot of people say the solution to solving the problem in public education is to blame the poor and defund schools, or at least certain schools, as if somehow those schools will then get better with less money. That's the kind of ideological fervor which is exacerbating the problem and... But TJ, so part of what you were saying earlier is that we need a marketplace of ideas. Yes, that's true, yeah. So you can have extreme ideas as long as you've got a big marketplace where these ideas play out. But there has to be fair competition and the problem is that if you have Representative X and his main concern in a narrowly gerrymandered district, there is no competitive politics except for with the most extreme version. In the United States there is this term called being primary, where a more ideological candidate will challenge you in a primary election before the general election if you do not hew to the most ideologically pure line. And so this creates a push toward the market. And nobody votes in primary elections if it's a primary election. Yeah, exactly. That's exactly it. It's only the most ideologically motivated. And what's the solution to that then? What's the solution to this very narrow kind of just win the election and everything follows from that? Well, one solution is nonpartisan redistricting in the United States, where I think that it's a very important idea where the district is not drawn on political lines, it's drawn on other factors by nonpartisan panel. No solution is perfect. We kind of find our way forward. And I should say no regulation is perfect either. In the 19th century, for example, when I get my own regulatory urges start going, I remind myself, Cornelius Vanderbilt, who did commit some things that some economic acts that helped spark the modern debate over regulating the corporation. For example, in 1867, in a dispute with the Connecting Railroad, he cut off all rail traffic into New York City during a blizzard in which no shipping could reach Manhattan's docks. I knew there was a precedent for that. That's exactly it. You can see the outcry over one bridge being blocked. Imagine the entire city being cut off by one person's decision, who isn't even an elected official. And needless to say, it helps start the modern debate over regulating these private disputes within private interests when they affect the public interest. But on the other side, he was criticized fiercely by the intellectuals of the day for carrying out a stock split. Very equitably, today there would be nothing considered wrong about it by anyone. But at the time, there was an entirely, to us, alien theory of the basis of stock value, that if you did not actually build more physical facilities, you could not issue more stock. And so it was fraud. And so just a generation later, what he did would have been perfectly fine. But at the time, there were cries for regulation of this to put a stop to it. So my point is that we can't always, we have to have regulations, we have to have oversight. We are going to get it wrong. It's the corporation and wealthy interests, they are very important interests in our society. They have to play a role in this debate. The thing is, is that society has to make sure that because of their financing, because of their natural influence, because of the symbiosis you talked about. Where if you are the head of a large corporation, you get heard, you get to go into a meeting with a governor, with a congressman, with a senator and she'll meet with you. And that's to be expected. We have to though encourage the competing voices and we'll get it wrong, but we have to keep the debate going. We have to keep the debate robust. So you're telling us on the one hand, some of this has always been happening. Some of this is politics is normal, but we're seeing a sharpening of it at the moment, which means we do have to do something. So the panelists have put to you a bunch of ideas of how, as it were, democracy needs to defend itself in the United States. They've said a much fairer drawing of electoral boundaries, public broadcasting and public education funding, fair taxation, compulsory voting, limits on campaign donations, perhaps. A different kind of political leadership. Which one strikes you as important or is there one that they've been missing that strikes you as an important step? Yes. Do introduce yourself. Hi, my name is Stephanie Stewart. I do a lot of work for the Democratic Party, so I am partisan. I live in the UK. I'm a dual citizen nationally vote in both countries. And I can see a huge difference in the way the two countries operate in terms of money. And I was just wondering how you guys feel about Citizens United and what it's doing. Because in the UK, of course, we have limits and we only campaign for a few months, thank God. And there are lots of things that are very corrosive in that Citizens United decision, in my opinion, and I'm wondering what you think about that. Can I just say a very brief historical note on Citizens United? The 19th century is when the corporation, those of you who've committed to heart wealth of nations, know that Adam Smith condemned corporations as a species of monopoly. Because the corporation was invented as a mercantilist device to carve out pieces of the economy to essentially reward members of the landed elite for putting resources into what we're seen by lawmakers as publicly useful entities. The United States, Canoes Vanderbilt and others helped break down that idea and turn the corporation into a business enterprise. But everyone had the idea for much of the 19th century that the corporation served a public purpose, that it was this artificial creation, the idea that it is itself a citizen that can influence elections was a holy alien for much of our history. It is created by law. That's great, but I want to take some more comments from the audience. Are there ideas, those of you who are not American in the audience, are there ideas that you can share with our American colleagues about things that are protecting democracy in your countries? Or do you have views on the ideas that have been suggested? Yes. Do introduce yourself. Sergeant Thabman from India. I come from part of a world where 4% of the country pays income tax. And a disparity between rich and poor is dramatic. I actually do believe the democracy actually looks after itself. Where a significant amount of anger, pain, frustration leads to what we've recently seen as voter turnouts in the excesses of 75%, which have led to legislatures in certain states actually being dramatically skewed in particular directions. That's also led to urban centers where there has been that frustration that does grow. So really, if you actually have in our country a difference where 15 to 20 million people for the next 20 years are gonna enter the workforce every year. And you don't create the kind of jobs that are necessary to make those people happy. Political change is inevitable. It's not something that can be controlled by a handful of people through some of the things that you're describing. So your point is that you'll have a revolution unless you... Basically, yeah. Absolutely, I think for a reformation, maybe not a revolution. I mean, I think the part of the context is what are we talking about? We're talking about short-term, medium-term. I mean, if we're talking about two election cycles, I mean, okay, what's the big deal? I think you have to wait for people to get pissed off enough to excuse the French before they start to basically vote with their feet, regardless of how you draw up the constituencies. But you're saying that creating jobs is a precursor to doing any kind of democratic... It's one of the things. It's one of the many things. I mean, there's a lot of issues in India that go beyond the creation of just jobs. But that's a big deal today. And it's gonna become a very big deal for the next 15 years. Can I? So we've got two points that the audience are putting to us. One is the Citizens United case. What happened? The second is, and I think it's a really important point, to protect democracy. Do you work on jobs and inequality? Or do you work on democratic processes? Which way would you go? Which one of those two would you work on first? Joe, you wanted to respond. Well, first, I want to say about Citizens United. It wasn't actually the worst of the ways by which money, the super PACs, one of the attempts that one of the states made to level the playing field was to say that if one candidate raised a lot more money than the other, then the state would try to offset that differential by trying to create a more level playing field. And the US Supreme Court, this was in Arizona, declared that was unconstitutional. That you had a constitutional right to inequality in voice. Either that was totally undermining what I view as a democratic process. So in the United States, we have constitutional constraints that really are undermining our democracy. On this issue of, one of the points I think you were making was that there's a self-correcting process over the long run. And I guess I'm looking at this a little bit for maybe a jaundice of American perspective, and this may be an extreme. The South of the United States officially had democracy, but we were successful, we, they were successfully disenfranchised, disempowered the African Americans so that it was only as a result of intervention from the rest of the country that democracy was restored in the South of the United States. Now, you can have the same thing, and I see the same kind of pattern going on in other countries around the world. When you have enough inequality, the people who haven't, you know, you can buy votes. You can persuade people that accept this little pittance and you'll be better off, and meanwhile, let me keep the big pie. An example of that goes back really to what Ken was talking about. The sale of the persuasion of most Americans that little capital gains tax rates are good for them. When, you know, 90% of the value of that capital preferential treatment of capital gains goes to the very top. So most Americans, you know, or a large fraction of Americans actually supported this peculiar provision, but, and putting step of a basis in a whole set of other technical details. The real point is that if you don't have good access to information, you can sell bad ideas just like you sell poisonous cigarettes and products that lead to obesity. Ken, you were gonna comment as well. Since we're bringing in the rest of the world, I just wanna say that it's absolutely correct that the US will fix itself eventually and there will be forces pushing back. But, you know, I do think timing does matter a little bit here. The dysfunction that we've seen in the United States, the shutdown, threat of default, the sequester is absolutely a reflection of fighting over some of these exact issues. And there isn't a clear end inside. I mean, there's some optimists saying, well, it won't happen again. I'm not so sure. And, you know, so the rest of the world, aside from hoping the United States, you know, can grow, this dysfunction has been visited on you already and it could get worse. Here, here. Other comments from the audience? Yes, down here. Do introduce yourself and here's a microphone. Hi, my name's Dr. Anise Byron from Perth. I'm married in New Yorker. And the issue of mandatory voting, that's what we do. And we agree with it, we do it, we get penalized if we don't do it. And coming to America, you know, we look at Americans and we think that's not democracy. That's like a collective act of delusion when only some of you have to vote and you can get actively written out of the voting system as it's done all the time. So when we have a government elected and we think it sucks, at least we know that it's a, you know, democratically sucks whether it's daylight saving or our governor or our prime minister. And it goes a very, very long way towards implementing a lot of the other processes that we think. I mean, it's very odd to have this discussion situated well above what most of us or so many of us from the rest of the world would consider a baseline issue of mandatory voting in order to exercise that basic democratic principle. But I think this debate has taken us to something slightly different. I think actually all the panelists agree to some degree that money politics is corroding democracy and a good part of the audience. I think what they disagree about is where you begin to resolve that problem. Do you resolve that problem by really taking on inequality and trying to make citizens more economically equal to empower them to play a role in the political system or do you resolve it by putting new rules around the political system, accepting the economic inequalities or bringing in compulsory voting, putting limits on campaign financing and such like? And I'd love to hear a couple more views on that from the audience, so I'm gonna come back to the panelists and then I'm gonna have you vote, yes. I wanted to, my name is Anata DeMatti from Stanford University. I wanted to say a couple of things. First of all, if you read the books about DC, if you listen to the talk about lobbyists, it's sort of certainly part of it is campaign financing and just read this down or Republic Lost or any of that and how we can get bad policies in this system. So certainly something about campaign financing would seem to be important, but another completely different point has to do with, to the extended corporations are part of it and a part of the conversation, it goes to the governance of corporations, it's themselves and there too, you have an issue of how corporations work and what shareholder value even means and who the shareholders are in this system with a lot of institutional investors involved and it's sort of a system in which the diversified small investor pensioner is lost in the governance of corporations as well because they're working for the shareholders, supposed to be a shareholder entirely invested there which ends up again being the management. So if corporations work for managers and then they lobby and then web interest groups, you get a breakdown. Great, so the point is make corporations more democratic and that could be part of the solution. We've only got time for like two quick more comments so just one at the back there and then we'll come down to... Hi, I'm Grunwald Beifert, I'm a writer about Turkish politics, but I'd like to talk about American politics for a moment. We've just got a bit of a short time. One of the issues I'm surprised has not been raised is secrecy. We now have a technology that would in principle enable us to know within a day who was funding political campaigns and yet we have laws that permit people to effectively contribute large sums of money to political campaigns in complete secrecy. We have no way of knowing what bias they have and correcting the views they put forward based on that knowledge. Thank you. Does anyone think that you should have a right to give anonymously? No, last comment, just down here. Michael Stewart, I'm CEO of Europe for Edelman. I just wanted to address the question you raised. I think it's an important one in the area. I don't think it's an either or. I think transformational economic development and job creation is going to take a long period of time. I think while that is playing out, there are fundamental changes that can be made to the political processes that support democracy that can both enable the longer term economic transformation, but get to empowerment of robust democracy. So I think as many things in life, it's both. Thank you. Now what I'd like you to do now is to have a final vote which is can democracy defend itself? So at least 64% of you perhaps more thought that money politics is corroding democracy in some way. Some of you might have been persuaded that it was corroding democracy even if you didn't begin with that view. But we've had a discussion that's presented you lots of ideas about how democracy can defend itself. So I'd like you to vote on whether you think democracy can or actually whether we're headed down a path which will continue as I set out at the beginning to corrode or weaken the representative-ness of democracy, the fairness of judges and courts, the plurality of different interest groups, the open and fair commentary, the transparency as others have focused on of government. So what do you think? I think actually we've got, the question is can democracy defend itself, but it's slightly more, will democracy defend itself? It's what we're really asking you to vote on. So let's just have a look before we close at what you think. Short term for the financial services sector 11 seconds or short term for the, well there's a very optimistic view. Democracy can defend itself, we should have asked you, will democracy defend itself? But I'm sure it's got lots of defenders in this room. Can you join me in thanking our panelists for giving us such a rich debate?