Who Is Corrupting Whom?

by Reihan Salam

Though I can’t really say if the Supreme Court was right to strike down the federal law setting a dollar limit on the aggregate campaign contributions individuals can make to candidates, parties, and political committees on free speech grounds in its McCutcheon vs. Federal Election Commission decision, I’d like to offer a modest defense of the limit. Walter M. Weber of the American Center for Law and Justice argues that one of the chief arguments the dissenting justices made in defense of the limit, that it might reduce the corrupting influence of campaign contributions on elected officials, is actually not that convincing, as campaign contributions are no more, and no less, corrupting than the prospect of favorable media attention, the institutional support of influential grassroots organizations, or the endorsement of influential celebrities. The dissenters warn that “officeholders will decide issues not on the merits or the desires of their constituencies, but according to the wishes of those who have made large financial contributions valued by the officeholder.” Yet as Weber makes clear, there are many other ways to persuade officeholders to discount the merits or the desires of their constituencies than to simply give them money. Is it obvious that we should tip the scales in favor of one kind of influence (that of widely-known media personalities, like Jorge Ramos) over another (that of American hedge fund manager and environmentalist Tom Steyer)?

There is, however, an entirely different kind of corruption we ought to keep in mind, which Fred S. McChesney of Northwestern University addresses at length in his 1997 book Money for Nothing: Politicians, Rent Extraction, and Political Extortion. And in 2002, McChesney published an article in the libertarian Independent Review titled “’Pay to Play’ Politics Examined, with Lessons for Campaign-Finance Reform.” McChesney’s thesis is straightforward. Elected officials are not best understood as public-spirited women and men who are utterly uninterested in advancing their own interests. Rather, elected officials are ordinary people who like the rest of us have a mix of motivations, including both altruistic and self-serving ones. While the conventional model of corruption assumes that campaign donors purchase favors and elected officials reluctantly go along with this rent-seeking because, woe is them, they simply have no alternative, the political game is far more complex. In many cases, donors aren’t opening their wallets in the hope of securing some special benefit. They’re opening their wallets in the hope of avoiding some special harm. That is, a not inconsiderable share of the money that flows from donors to politicians reflects rent extraction by the politicians, not rent seeking by private interests. Another term for rent extraction, by the way, is extortion.

Depressingly, McChesney argues that contribution limits will simply lead politicians to shift their rent-extracting demands from campaign contributions to donations to, say, civic institutions in their home district. And if this is indeed the case, perhaps we ought to prefer efficient transfer payments to politicians over less-direct channels. One could also argue that limits on aggregate campaign contributions by individuals at least allow these individuals to say to politicians that they’d love to make a contribution, but they’ve already reached the legal limit. This certainly won’t solve the underlying rent extraction problem. It could, however, protect the interests of some small number of wealthy individuals who fear being preyed upon and bled dry by politicians.

The obvious objection to justifying a limit on aggregate campaign contributions on these consumer protection grounds — we are, after all, talking about consumers in a political market — is that it abridges the freedom of those individuals who love the idea of donating large amounts. In a similar vein, one could argue that despite the fact that a large majority of those who consume alcohol, cannabis, or cocaine are responsible people who know their limits, we impose various restrictions, which are generally less well-designed than I’d like them to be, to protect problem users from themselves. This leads to a meaningful sacrifice of freedom for the responsible majority, yet we balance this cost against the (supposed) benefits to the irresponsible minority. My analogy is inexact, as it is not as though individuals who do want to donate enormous amounts of their income are not best understood as reckless or irresponsible. It is reasonable to suggest that these individuals are creating a negative externality that is being borne by the other targets of rent-extracting demands by politicians.

In “A Nudge Toward Temperance,” a recent article in the Washington Monthly, Mark Kleiman proposes a clever mechanism for helping cannabis users control their vice: an individualized quota system, in which each cannabis user would set a monthly purchase limit for the amount of THC they could purchase. Users would be responsible for setting the limit themselves, and they would have an opportunity to revise it at regular intervals. The limits would, however, be binding. Could something similar apply to campaign contributions? That is, could we established an individualized quota system in which citizens decide at the start of the year how much they will allow themselves to contribute to candidates for elected office? I doubt such a system would make a huge difference. But I don’t see why it wouldn’t pass constitutional muster, and it would at least give individuals an excuse to ward off predatory politicians. It’s not much, but it’s something.

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.