Michael DeBow is a professor of law at the Cumberland Law School of Samford University in Birmingham, Alabama.
The reform of campaign finance and lobbying is a perennial subject for Americans, particularly those of the “good government” persuasion. The reformers’ conventional wisdom on these issues laments the fact that American politicians solicit, and receive, large amounts of campaign contributions from individuals and organizations with vital interests at stake in the political arena. In the conventional wisdom, money is the root of almost all political evil. Most importantly, bad public policies are supported by Congressmen as a payback to their contributors. This baleful result is traced particularly to the activities of political action committees, or PACs.
The Conventional Wisdom Misses the Real Problem
The reformers apparently think that, without the “corrupting” influence of campaign contributions and other lobbying efforts, Congress would make “better” decisions. This position is, in turn, based on an assumption that there is a correct answer to any given public policy question, and that this answer would be rather easily identified and implemented by a Congress freed of the corrupting influences of money and, thereby, acting “responsibly.”
This is a delusion.
In virtually every instance, there is no “correct” answer to a public policy question waiting to be discovered by well-meaning officeholders. Exceptions to this rule may well exist in times of war and other national emergencies, but in peacetime there are no clear “answers” to most of the questions that government is increasingly called upon to answer.
To see that this is so, consider the related issues of government spending and taxing. While 90 percent or more of Americans might “agree” that the deficit should be lowered—or at least not increased—they will not agree on how such a state of affairs is to be reached. Should the rate of increase in Social Security benefits be reduced? Should appropriations to Aid to Families with Dependent Children, or National Public Radio, or farm price supports be cut—and if so, by how much? To state the problem is to answer it; there is no “answer.” The political process will, of course, generate some sort of answer, but there is absolutely no reason to believe that any answer adopted by Congress is “the” answer.
In seeking to change campaign finance and lobbying methods, reformers are focusing on a symptom of the problem—spending to influence government decision-making—rather than on the real problem—the vast size and scope of American government.
For roughly the last 60 years, the size and scope of the national government have steadily increased, along with tax rates and the reach of government regulation into many areas of our lives. As a result, the idea that there are, or should be, any limits on the powers of the government has largely passed from the contemporary scene. This is particularly true with respect to the federal government and to the regulation of economic activity. Not only do we not have a national government of enumerated powers as envisioned by the Founders, we have a national government of such unlimited scope that it would be very difficult to agree on an enumeration of powers that it does not have.
Do you doubt it? Reflect on the fact that in the recent debate over health care, no serious attention was paid to the question whether the federal government has the authority to regulate this area of our lives. Instead, arguments focused on whether such regulation would lead to beneficial results.
In short, Americans have, consciously or unconsciously, rejected the concept of limited government. In its place, we now have Leviathan.[1] The growth of Leviathan triggered a parallel growth in the efforts of private interests to extract favorable treatment from the government. Given the size of government and the virtually unlimited scope of its powers, private interests—businesses, unions, ideological groups, retirees, and so on and on—face tremendous incentives to become active in the political sphere in order to pursue governmentally conferred benefits and to oppose like efforts put forth by others. From society’s viewpoint, all this activity is a waste of resources.
Moreover, the problem of private interest capture of government power is only one problem aggravated by the growth of government power. The other major problem is that massive government power is subject to massive mistakes and miscalculations even in the absence of private-interest manipulation or, indeed, in the absence of any corruption at all.[2] Platonic Guardians can make mistakes, too, and given all that we ask them to do today, we’d be better off with a smaller government than with our current government even if it were staffed with public-spirited experts.
In short, any attempt to reform politics that does not include a serious effort at downsizing government is doomed to impotence.
Campaign Finance Reform Is Not Likely to Produce Positive Results
If you accept my argument thus far, you may still think campaign finance and lobbying reform could do no harm—even if it is likely to have little or no positive effect, given the size and scope of government. Shouldn’t we at least try to reform politics, even if we recognize that the real source of our problems is the virtually unlimited scope of government power?
Maybe not. There are several good reasons to reject the view that increased regulation of campaign spending and fundraising, and interest-group lobbying would improve the political process.
First, attempting to limit the effectiveness of political interest groups by regulating campaign finance and lobbying would raise severe First Amendment questions.[3] Bluntly put, the First Amendment was designed to protect the kinds of activities that the good-government crowd seeks to curtail. Given the current state of First Amendment case law, any serious attempt to regulate in these areas may very well be struck down by the courts.
Professor Lillian BeVier of the University of Virginia Law School has argued that First Amendment protection of this kind of “speech” is in fact in the broad public interest.
“Special interest” groups, and political action committees that they form, are a means of overcoming the collective action problems that [the rational ignorance of most voters] engenders. Because they serve this function, special interest groups may arguably be regarded as benign if not indispensable players in the democratic process. With respect at least to their own particular interests, such groups have the significant potential effectively to monitor legislative behavior and thus to reduce legislative shirking. They convey information to otherwise uninformed and powerless group members about legislative activity and in turn funnel information from the group back to the legislature. Under this view, special interest groups deserve the protection of the First Amendment’s freedom of association because of the indispensable role they play in monitoring elected officials.[4]
Put another way, there is simply too much at stake for politics to be conducted without efforts by “outsiders” (that is, the governed) to influence the process, and it is a good thing that the First Amendment case law recognizes this fact.
Second, interest groups “have a number of close substitutes to direct contributions—lobbying, voter mobilization efforts, `soft money’ donations, and so on.”[5] Any attempt to regulate independent efforts to advance a particular candidate or espouse a particular viewpoint on a contested issue would be even more vulnerable to First Amendment attack than limits on direct campaign contributions. Thus, interest groups would likely be able to live with and work around, at least to some extent, any new restrictions that did survive First Amendment scrutiny.
Third, it stands to reason that from time to time interest groups will inadvertently represent the interests of most of the general public even as they represent their own private interests. For example, the interest groups that fought the Clinton Administration’s health-care proposals represented the interests of the general public at the same time they represented their own private interests. When President Clinton proclaimed that it was his health-care reform against the special interests, most Americans should have cheered for the special interests—which prevailed, in the end. With a government as powerful and intrusive as ours, we should not be too quick to blunt the effectiveness of interest groups who will oppose further accretions of government power. Since almost any given interest group may, on a particular issue, oppose the expansion of government, this point covers a lot of territory.
Fourth, if current efforts at campaign finance and lobbying reform succeed and have a real effect on the ability of interest groups to influence politicians via legal campaign contributions and so on, this would likely increase the amount of under-the- table bribes and payoffs to politicians. Simply put, “meaningful” reform would shift a portion of the market for influence underground.[6] This is simply a result of the fact that government’s authority is so great that there will be competition, legal and illegal, for influence over it.
Finally, the conventional wisdom about campaign spending/fundraising may very well be wrong. For example, the line of causation in campaign contributions is often cloudy. Does Interest Group X contribute to Congressman Y because he agrees with them, or does Y agree with them only (largely?) to gain their contributions? Moreover, recent research presents a strong challenge to the conventional wisdom on campaign finance reform. This research brings into doubt the reformers’ claims that (1) the incumbents’ financial edge over challengers is critically important, and (2) PAC contributions have a substantial effect on the political system.[7] As Harvard economist Steven Levitt put it, “the substantial amount of energy devoted to the topic by the public, the media, and politicians might be more productively channeled towards other issues.”[8] While this research will be subjected to further testing and debate, it currently stands as an important reason to hold off on any major attempt to rewrite campaign finance law, at least pending the outcome of further research.
In summary, any effort to reform the practice of seeking political influence without first reducing the size and power of government is not likely to have a significant positive effect, and may well infringe the First Amendment and other widely held values. []
1. Gary Lawson, “The Rise and Rise of the Administrative State,” Harvard Law Review, April 1994, pp. 1231-1254. Lawson describes the “post-New Deal administrative state” as the result of a “bloodless constitutional revolution.”
2. For discussions of the types of failure that plague government activity, see Charles Wolf, Jr., Markets or Governments: Choosing between Imperfect Alternatives (Cambridge, Mass.: MIT Press, 1993), and Michael E. DeBow, “Markets, Government Intervention, and the Role of Information: An `Austrian School’ Perspective, With an Application to Merger Regulation,” George Mason University Law Review, Fall 1991, pp. 31-98.
3. Recall that portions of the post-Watergate campaign finance reform statute were struck down as violative of the First Amendment by the Supreme Court’s 1976 opinion in Buckley v. Valeo. For a good overview of current laws and regulations, see Sam Kazman, “Purer Politics, Greasier Pigs, and Other Wonders of Campaign Reform,” Regulation, Summer 1992, pp. 62-68.
4. Lillian BeVier, “Campaign Finance Reform: Specious Arguments, Intractable Dilemmas,” Columbia Law Review, May 1994, p. 1273.
5. Steven D. Levitt, “Congressional Campaign Finance Reform,” Journal of Economic Perspectives, Winter 1995, pp. 183, 193.
6. According to one observer, “If you were foolish enough to abolish lobbying, you would only drive it underground, where it would be far more abusive and corrupting than it is in the open.” Jonathan Rauch, Demosclerosis: The Silent Killer of American Government (New York: Random House, 1994), p. 159.