On January 21, 2010, the Supreme Court rocked the political establishment when it handed down its decision in Citizens United v. FEC. The controversial 5-4 ruling, which overturned longstanding federal law that prohibited corporations and labor unions from expending general treasury funds on election-related independent expenditures, provoked strong reaction. Most conservatives hailed the decision as a victory for free speech rights, whereas others, notably President Obama, predicted that the ruling would allow big-money interests to dominate American elections. Perhaps no critic of the decision went as far as former MSNBC host Keith Olbermann, who remarked on his program that the decision “might actually have more dire implications than Dred Scott v. Sandford,” the infamous 1857 ruling that black Americans were not citizens and deserved no protection under the Constitution.

With the 2010 election now in the past, a new study (“The Citizens United Election? Or Same As It Ever Was?”) published in the online journal The Forum by political scientist Michael Franz offers some initial evidence suggesting that some of the dire predictions about the effects of the ruling on American democracy appear to have been somewhat overstated. Franz does not, however, completely dismiss the significance of Citizens United. Indeed, as discussed below, the ruling appears to have led to some broad changes and potential shifts in power. And while several questions about the effects of the ruling remain unresolved, the ultimate answers to these questions will have significant implications for how campaigns for federal office are likely to be financed in the post–Citizens United world.

The Clash of Material Aims and Economic Interests

In his classic book Political Organizations, political scientist James Q. Wilson describes the different ways that groups can distribute benefits to their membership. According to Wilson, groups with economic interests provide their members with “material” benefits or tangible rewards, such as improved wages, salaries, or services priced in monetary terms. These “material” organizations stand apart from those that offer “purposive” incentives (intangible rewards that arise from the satisfaction of helping to attain a worthwhile, often ideological, goal) or “solidarity” incentives (intangible rewards that arise from associating and socializing with specific individuals).

Political organizations with material and purposive goals are those most likely to seek to advance their interests in the electoral arena. In the first election of the post–Citizens United era, those with material aims, notably business and labor groups, were especially active. According to data from the Center for Responsive Politics, the U.S. Chamber of Commerce spent nearly $33 million on independent expenditures and electioneering communications in 2010—the second highest total of any organization behind only the combined totals of Karl Rove’s and Ed Gillespie’s American Crossroads and Crossroads GPS (see Table 1). Data from the Wesleyan Media Project, presented in Franz’s Forum article, also show that in the final sixty days of the 2010 election alone, the Chamber spent $21 million on 21,991 ads in twenty-eight House races and a dozen Senate contests. With the exception of the Republican Governors Association, no political organization ran more spots or spent more money on advertising than the Chamber did during this critical period of the 2010 election. The Chamber’s 2010 efforts also dwarfed the reported $10 million on advertising that it spent in the previous 2006 midterm election.

Several other pro-business and self-described “free-market” groups were among the top 2010 spenders on behalf of Republicans in independent expenditures and electioneering communications. As Table 1 shows, two such groups, the American Future Fund and Americans for Job Security, spent more than $9 million each. Numerous other corporate PACs and organizations with business interests spent millions more in 2010.

On the labor side, the American Federation of State, County, and Municipal Employees (AFSCME), the Service Employees International Union (SEIU), and the National Education Association (NEA) played a considerable role in supporting Democrats (see Table 2). Additional data from the Campaign Finance Institute indicate that labor organizations combined spent an estimated 68 percent or $156 million out of the $230 million spent in all by outside groups on behalf of Democrats in congressional races in 2010. This is a marked increase from 2008 when labor accounted for 47 percent or $93 million of the $198 million spent by outside groups on behalf of Democrats in congressional races.

Of course, it is hardly surprising that the Chamber of Commerce and labor organizations are among the biggest spenders in federal elections. Nonetheless, it is worth emphasizing that the Citizens United ruling has created more opportunities than ever before in the post-Watergate campaign finance era for business and labor interests to influence elections. As the data from 2010 indicate, business and labor took eager advantage of this new, less restricted regulatory environment.

Aside from business and labor interests, other developments point to an increased clash of material aims. In addition to the Citizens United decision, loopholes in campaign finance law and other rulings from the courts have created incentives for individuals to give money to 501(c) groups, which do not have to follow the strict disclosure requirements of other political organizations. This anonymity is often especially important to donors known as “investors,” who seek to advance the interests of their business, industry, or profession. Investors value anonymity because of their fear that a publicly disclosed contribution could offend an important and powerful elected official, potentially jeopardizing legislation or matters pending before a government agency that may affect their interests.

In addition to investors, individual donors known as “ideologues” (those who seek to advance policies that provide public goods unrelated to their material well-being) and as “intimates” (those who value the social aspects of giving) also play a role in campaign finance. Ideologues have traditionally been the most common type in the donor pool, and intimates have been frequent targets of campaign fundraising efforts in recent elections through social networks. However, investors now have an unprecedented vehicle to advance their interests because the anonymity offered by 501(c) organizations shields them from potential reprisals. While there are no survey data of individual donors available yet to confirm empirically whether investors have taken on a greater role in the financing of campaigns, there are certainly good theoretical reasons to suspect this may be or will become the case.

Political Implications

If business and labor have indeed increased their influence in the electoral process and there has been an increase in the clash of material aims and economic interests in the post–Citizens United world, then what are the likely consequences for the future of American campaigns and democracy? One possible outcome for campaigns and the consultants who run them is that endorsements and financial support from business and labor will take on ever greater significance. Such a development would offer strong incentives for Republicans to move closer to business interests and for Democrats to move closer to labor interests, thereby further increasing polarization between Democrats and Republicans in Congress.

A more benign scenario exists in which the post–Citizens United environment will lead to livelier and more robust debate between business and labor, which in turn will advance free speech and improve the overall democratic process. Conversely, one could envision a future in which labor will be simply unable to match business interests dollar-for-dollar. In response, Democrats would have the incentive to adopt more business-friendly positions, creating a near-monopolistic position for business in the electoral process—the very outcome that critics of Citizens United initially warned could poison American democracy as a result of the ruling. Although it is still too early to draw any firm conclusions, the latter scenario seems the least probable in light of the competitive amounts of money that labor groups spent in 2010.

More broadly speaking, the Citizens United ruling takes us down a familiar path that has been debated by political scientists and other political observers for decades. Those with faith in pluralism will view the post–Citizens United world favorably. Groups may compete in a clash of material aims, they argue, but the broad diversity of interests active in American politics will ultimately check any one particular interest from dominating the system. Those who believe, as the political scientist E.E. Schattschneider once wrote, that the “flaw in the pluralist heaven is that the heavenly chorus sings with a strong upper-class accent,” will undoubtedly see the future in bleak terms with moneyed interests dominating the electoral process. It is not clear from just the 2010 election which perspective is correct, though preliminary evidence from several different sources suggests that the initial outcries against Citizens United seem somewhat exaggerated. What we can conclude with more confidence is that the Citizens United decision and other related developments seem to have altered the incentive structures for outside groups and individual donors in a way that will intensify the clash of material aims and economic interests in American politics.

Peter L. Francia, Ph.D., is an associate professor of political science at East Carolina University in Greenville, NC.