Some Thoughts on Campaign Finance Reform

by robekulick

I didn’t get much blogging in last week, so I’m hoping to remedy that this week. This is something that occurred to me this weekend after reading an article about the new “superPACs” that have come into existence since the Supreme Court’s decision in Citizens United.

Essentially, there really aren’t that many different ways for society to structure the financing of political campaigns. As I see it there are basically three options:

1) Political campaigns are financed based on grants from the government;

2) Political campaigns are self-financed by the politicians themselves;

3) Political campaigns are financed through donations.

The main source of financing in this country is donations. This causes people interested in campaign finance reform to fret that our political system is distorted because campaign contributions are quasi-bribes. By let’s consider the alternatives for a moment. For the sake of this discussion, assume that society can only finance political campaigns through one of the strategies. I understand that all three forms of financing are in use, but the point of the exercise is to illustrate why we can’t do away with #3 and from the standpoint of exposition, it’s easier to make my point limiting consideration to one type of financing at a time.  Obviously option #2 wouldn’t make anyone happy because it means only the rich could run for office, which I think most people will agree is not how it should be.

What then about option #1?  Option #1 might be appealing to some people at first, but I think when you consider its ramifications it too becomes untenable. Obviously, if the government controls campaign financing decisions then it ultimately has to decide who to finance and how much to provide in financing. Of course the worst possibility with this sort of financing arrangement is that incumbent politicians will use their control over financing to thwart the electoral possibilities of challengers. But even if we assume that the government will operate with purely altruistic motives, the government will have to impose limitations on both the candidates selected for financing and the level of those finances which means that the government will be in the business of designating the contours of political debate and limiting the ability of politicians to use media to reach voters. I think most of you, like me would agree that this is unacceptable.

And so it seems we’re stuck with imperfect system we have where campaigns are financed mostly through option #3. So now, if it’s best to finance campaigns through donations, why have campaign-finance rules at all? Specifically, why cap individual contributions in the first place and create all of these bizarre PACs and superPACs and rules about union/corporate giving?

Some people might answer that the purpose is to prevent any individual from having undue influence on the political system. But the inescapable reality is that whatever rules you impose will give some individuals more influence and some individuals less influence. So to put some structure on this conversation (between me and myself), let’s say what we’re trying to do with campaign-finance reform is to insure sufficient diversity of political ideas. But does campaign-finance reform accomplish this? It seems to me that for every billionaire Koch there is a George Soros or Warren Buffet. I don’t think there is any evidence that unrestricted campaign contributions will lurch the country in one direction or another. The main bias in the system is that the more mainstream the ideology is the more money it will probably receive, but this is true under the PAC system and will remain true under any reasonable campaign-finance  structure.

So it seems to me that campaign-finance rules are probably just a device for what economists call “rent-seeking” by political opportunists. In other words, it’s just another way for political antagonists to try and improve their position relative to their opponents. Such rent-seeking has negative social value so my inclination is that there should just be unrestricted individual giving.