Business, the Democratic Party, and the New Deal: An Empirical Critique of Thomas Ferguson's "Investment Theory of Politics"

This paper contributes to the continuing debate on how structures of economic power are connected to political processes in the United States by examining a widely respected theory concerning the financial support for the two dominant parties during the New Deal. Thomas Ferguson's "investment theory of politics" purports to demonstrate that capital-intensive, internationalist firms supported the Democrats while the labor-intensive, nationalist firms supported the Republicans. Campaign finance contributions for the 1936 Presidential election were used as an empirical indicator of the political preferences and material interests of business firms. It was found that there was little evidence to support Ferguson's claims. While there were firms where all political contributions went to the Republicans, it was highly unusual to have firms that contributed only to Democrats. There was also a total absence of Democratic industries. It is suggested that other variables need to be considered in determining the material bases of the major political parties, particularly the Democratic.