All Commentary
Thursday, January 1, 2004

Politics Corrupts Money

The Law Cannot Distinguish Between Good and Bad Uses of Money

In September the Supreme Court heard oral arguments in the heated battle over campaign finance reform legislation—the so-called Bipartisan Campaign Reform Act, or BCRA. That law, passed by Congress and signed by President Bush in 2002, has been challenged by a wide array of parties, including such strange bedfellows as the U.S. Chamber of Commerce and the AFL-CIO. The plaintiffs contend that the statute violates the First Amendment of the Constitution.

I won’t offer any prediction as to how the Court will rule. Especially in the wake of last summer’s decision in the University of Michigan case, where a majority of the Court invented out of thin air a “compelling state interest” in “diversity” that allows schools to ignore the Fourteenth Amendment’s requirement that all citizens be treated equally under the law, it’s impossible to say how the Court will decide. The language of the Constitution is so easily evaded.

But I will offer some thoughts on how the Court ought to rule. It ought to declare the BCRA unconstitutional and should do so in language that doesn’t encourage Congress to go back to the drawing board. The whole enterprise of campaign-finance regulation is not only a violation of the Constitution, but logically misconceived as well.

The constitutional issue is simple. “Congress shall make no law abridging the freedom of speech or of the press,” says the First Amendment. In limiting political contributions, which are instrumental in campaign communications, and in restricting political ads, BCRA abridges both. Backers of the legislation say that there are good reasons for the restrictions. I disagree, but even if there were good reasons, the Constitution doesn’t say, “Congress shall make no law abridging the freedom of speech unless it’s really needed.” The drafters of the Constitution gave us an absolute prohibition against congressional tinkering with free speech.

The BCRA’s prohibition against “issue ads” before elections is undoubtedly an attack on free speech, but what about its limits on campaign contributions? Are monetary contributions to be equated with speech? Yes, they should be. Such contributions are instrumental to campaign communications and cannot logically be separated from them. Suppose that Congress passed a law saying that no one may spend more than a certain number of dollars per year on paper and ink. Would anyone take seriously the contention that the law did not violate the First Amendment because it merely put limits on the spending of money, but did not directly interfere with a free press? Bradley Smith, now a member on the Federal Elections Commission, put the matter clearly in his book Unfree Speech: “If spending money were not a form of speech, the First Amendment would become hollow for all but newspapers and other press outlets, since any effort to spread one’s message, through advertising or pamphleteering, could be stripped of First Amendment protections simply by attacking the expenditure of money.”

But the First Amendment is not the full extent of our constitutional inquiry. We should look first to the body of the Constitution itself to see if there is any grant of authority to Congress to legislate restrictions on campaign contributions and spending at all. Article I, section 8, gives the exhaustive list of congressional powers. Read it through and you will not see any provision that even remotely suggests authority to dictate to people how much of their money they are allowed to contribute to any political candidate or cause. And no, the General Welfare clause won’t do. It was never meant to be an all-encompassing grant of power, but instead was included as a limitation on the expressly granted powers. Therefore, we must conclude that the BCRA and all other campaign-finance reform statutes are unconstitutional.

The Flawed Premises of Campaign-Finance Regulation

The central idea of campaign-finance reform is just as flawed as it is unconstitutional. Money—at least money from the wrong sources, or too much of it—supposedly corrupts our otherwise pure democratic system. Bad bills get passed just because of donations from well-heeled interest groups to politicians whose support is for sale, and good bills are blocked for the same reason. The rich have undue influence in the political arena, while “the little guy” is ignored. So what could be fairer than to (sorry, but here comes another cliché) “level the playing field”?

That central idea, however, gets it completely backward. Money does not corrupt politics. Politics corrupts money—that is to say, individuals with money.

Seventy years ago the sociologist Franz Oppenheimer pointed out in his book The State that there are fundamentally only two ways of getting what you want in life. He called them “the economic means” and “the political means.” By economic means, Oppenheimer meant producing and trading. By political means, he meant the use of force, particularly force as organized and used by government.

If government sticks to its proper role as a neutral enforcer of laws that protect life, liberty, and property, people have to use the economic means to achieve their goals. They have to work to produce goods or services that they then sell to get money so they can buy other things. That regime channels human energy into useful endeavors.

On the other hand, if government allows its powers to be used so that some people can dictate to and live at the expense of others, society will change dramatically as the political means becomes increasingly prevalent. Human energy, resources, and money will go into scheming for the passage of laws and regulations that benefit a few at the expense of the many. Frédéric Bastiat called it “legal plunder” and it has become the means of choice for many in our society.

Therefore, the temptation of politics corrupts people into using their money for all sorts of nefarious purposes. Companies try to buy government subsidies. Unions try to buy protection against competition. Various citizen lobbies try to buy “free” medical care or more “protected wilderness” or increased student aid or hundreds of other goodies. The urge to attain their goals through the use of government force leads them to adopt an array of tactics, mostly using money directly or indirectly, to influence politicians, bureaucrats, and judges.

But at the same time, individuals and organizations that don’t want those things foisted on them are driven to spend their resources on opposition politics. They mount campaigns to persuade officials not to enact more legal plunder. Money in politics thus is not only spent trying to bring about bad laws and policies, but also to stop them.

The proponents of campaign-finance reform evidently believe that with their cleansing reforms in place, there will be much less support for the political “bads”—even though there is no agreement as to what constitutes a political bad. I submit, however, that it is at least as likely, if not more so, that campaign-finance regulations will be a greater impediment to those who oppose the political bads than to those who promote them.

Impeding the Foes of Special-Interest Legislation

The interest groups that push politicians to give them goodies will not be deterred merely because laws regulate campaign spending. They will find ways to influence politicians anyway. Regulations are apt to have far more impact on “leave us alone” individuals and groups, making it harder for them to raise issues with the public.

Let’s consider a hypothetical situation. A coalition of interventionist politicians introduces a bill named “The Good Health for All Americans Act.” It would create a “single payer” health-care system—that is, socialized medicine. Doctors would become government employees subject to its direction. Private health insurance would be eliminated because the state would dispense all medical care.

Doctors who don’t want to have to choose between leaving their profession and becoming government employees form a group to oppose the bill. So do insurance companies that don’t want to be driven out of the market. When they begin lobbying against it, they find that the “grassroots” organizations pushing the bill have already lined up a lot of support using populist appeals and that people like the idea getting something for nothing. The opponents discover that a few politicians respond to their arguments that the legislation would be a disaster for health care. With many others, however, rational arguments are unavailing. So they turn to another form of persuasion, saying, “If you will oppose ‘The Good Health for All Americans Act,’ we will give a very large donation to your re-election fund. On the other hand, if you don’t oppose it, we will instead give that money to your challenger in the next election.”

To campaign-finance reform zealots, this is corruption pure and simple. Inducing a politician to abandon his conscience and vote in a certain way just because of money. How shocking and immoral!

It shouldn’t be shocking and certainly isn’t immoral. To use some of one’s wealth to protect the rest of it is not immoral. That’s precisely what the coalition of opponents is doing. They’re using the most effective means possible to avoid disastrous legislation. It’s too bad that they need to pay what amounts to protection money to politicians just to be left alone, but that’s where the ascendancy of the political means has left us. The campaign-finance reformers assume that democracy is working correctly and purely when the populist advocates of socialized medicine promote their nostrums, but has been wickedly subverted when others use their money to play defense. I say that it’s the other way around. The attempt to force socialized medicine on a gullible people is corrupt, and the use of money to stave it off is morally praiseworthy.

Yes, one could construct a scenario in which a good legislative initiative (say, elimination of the postal monopoly) is derailed by big-spending pro-monopoly interests, but since the political initiative in America rests strongly with the advocates of expanding government, that sort of thing occurs much less often than the socialized-medicine scenario. In any event, the law cannot distinguish between good and bad uses of money in politics and shouldn’t try. Money is often the most effective weapon against socialist depredations; without it, the playing field is tilted strongly in favor of the predators.

The reason why people seek favors from the government is that the government is empowered to give them. Returning to constitutional, very limited government would remove the temptation to use the political means.

  • George Leef is the former book review editor of The Freeman. He is director of research at the John W. Pope Center for Higher Education Policy.