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The Independent Institute
Commentary

The Futility of Campaign Finance Reform


Campaign finance reform is all the rage. Republicans want it; Democrats want it; President Clinton supports it; members of Congress have submitted bills to enact it.

Yet nobody really expects serious reform. Foxes do not voluntarily evacuate the henhouse. You can bet that any new laws to regulate campaign financing will leave incumbent foxes well ensconced in the aviary.

Lee Hamilton (D-IN), a member of Congress since 1965, attests: "The conversation today among members of Congress is so frequently on the topic of money -- money, money, money, and the money chase." The politicians' ceaseless hustle for money mocks every affirmation of our democratic creed.

Yet campaign finance reform, which requires that we face unpleasant facts, calls forth little more than wishful thinking. The New York Times, after editorializing that the system is "corrupt at the core," can recommend nothing more than "a step here, a step there."

The facts are plain. Thousands of large donors, usually acting on behalf of organizations or interest groups, give hundreds of millions of dollars to politicians seeking election. The political aspirants spend the money mostly for moronic television ads that thrust their names before a largely indifferent electorate. The ads seem to work. Congressman Hamilton declares, "Elections are more often bought than won."

Once elected, the politicians wield the government's copious powers to do favors for major contributors. Quid pro quo. Those who cough up big bucks to help elect the candidate receive what often amounts to a huge return on their investment. Of course, their payoff comes at the expense of taxpayers, consumers, competitors, and other unfortunates, not the officeholder personally, but that's just a detail. As H. L. Mencken observed, elections are advance auctions of stolen goods.

Apparently, the public is supposed to believe that rich people and interest groups give vast sums of money to politicians just to promote good causes. But nobody stays in business that way. The contributors certainly expect something back, and if as a rule they did not get a payoff, the system would break down. Its current flourishing condition signifies that donors are indeed receiving their rewards. Anyone can fill in the details by reading the newspapers or, better, by lingering over breakfast in a Washington hotel to overhear people discussing their "business."

Scanning the list of those who slept in the Clinton White House and who gave more than $200,000 to the Democratic National Committee from 1991 through 1996, one finds individuals affiliated with such public-spirited entities as Truman Arnold Companies, Massachusetts Envelope, American Income Life Insurance, MCA, Furman Selz Inc., Kaye Insurance, American Financial Corp., DWG Corp., Genstar Rental, Allen and Company, AKT Development Corp., Lillian Vernon Corp., Ziff Investments, Dreamworks SKG, and Norton Utilities. Thank God our democracy is in good hands.

To cleanse this polluted stream, reformers have advanced various proposals, including public financing of elections, limiting candidate spending, strengthening the Federal Election Commission, and further restricting PAC contributions. None of these would turn the trick. If politicians have proven anything, it is that they are virtual Houdinis when it comes to evading restraints on their wringing money from those affected by government actions.

No, the root of the problem lies not in the takers, who will always find a way to take, but in the givers. Nobody wants to face the brute fact that donors pay only because the government possesses vast powers to intervene in the economy and society, thereby making or breaking endeavors of all sorts. As former Monsanto CEO Richard J. Mahoney wrote recently, "All of you want government in on every detail of corporate life. You want to embroider every aspect of it with laws and regulations. Then you are surprised that companies are willing to make political contributions." Likewise for unions, trade associations, and countless other interest groups.

So long as government controls every aspect of everyone's affairs, all those who stand to gain or lose from government decisions and can amass large sums of money will find a way to bid for favorable decisions. If we can't make a payment via PAC donations or soft-money shenanigans, we'll find other ways. We'll drop it from helicopters in plain brown wrappers; we'll tunnel under the politician's house and hand it up in gold bars; we'll smuggle it in disguised as a pizza delivery.

Face it: The hydra-headed government now dominating this country is inherently corrupt. Nobody who supports this kind of government has any standing to complain about the corruption.


Robert Higgs is Senior Fellow in Political Economy at The Independent Institute and Editor at Large of the Institute’s quarterly journal The Independent Review. He received his Ph.D. in economics from Johns Hopkins University, and he has taught at the University of Washington, Lafayette College, Seattle University, and the University of Economics, Prague. He has been a visiting scholar at Oxford University and Stanford University, and a fellow for the Hoover Institution and the National Science Foundation. He is the author of many books, including Depression, War, and Cold War.

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