[3] Quoting Downs, Ferguson accepts that 'the expense of political awareness is so great that no citizen can afford to bear it in every policy area, even if by doing so he could discover places where his intervention would reap large profits'.
While Downs largely overlooked the implications of this insight, Ferguson makes it the foundation of the Investment Theory of Party Competition, recognizing that if voters cannot bear the cost of becoming informed about public affairs they have little hope of successfully supervising government.
As a result, the investment theory holds that rather than being seen as simple vote maximizers, political parties are best analyzed as blocs of investors who coalesce to advance candidates representing their interests.
[6] This is because, in situations where money is important, political parties must take positions that enable them to attract the investment required to run successful campaigns.
[7] In fact the Investment theory predicts that in many cases political parties are more likely to try and change the position of the public to match those of its investors than vice versa.
For this to happen, however, generally requires channels that facilitate mass deliberation and expression, typically 'secondary' organizations capable of spreading the cost of acquiring information and concentrating contributions from many individuals to act politically.
Such conditions may enable high information flows to the general population and make political debate and action a part of everyday life.
[12] In fact, Ferguson suggests, the general population is far from ignorant or uninterested in the outcome of elections, and will often make considerable effort to understand the issues under discussion.
Instead, Ferguson credits the rise of independent industrial unionism as the result of masses of American voters for the first time in US history successfully pooling their resources to become major investors in their own right.
While acknowledging a need for reform of campaign finance, 'if only to prevent more and more of society's resources going down a black hole', Ferguson suggests, that no matter how diligent the regulators are, wealthy investors will doubtless find new ways to corrupt the political system.
Instead, this funding merely subsidizes parties that the rich control, with the effect that public money merely leverages the contributions of major investors.