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Money in Politics is a Public Choice Problem, Not an Electoral One

Over at Reason, Ed Krayewski offers up some great thoughts on money in politics in the midst of reporting on Gov. Buddy Roemer (R-LA) suspending his “quixotic” presidential campaign. Roemer, a Republican turned Americans Elect candidate, ran on a platform of capping donations at $100 and not accepting any PAC money – hence the relevancy:

Politicians don’t need money to corrupt them, they can do that fine all by themselves; members of Congress can spend their entire careers enriching themselves on the taxpayer dime and not run afoul of a single law. No corporation forced former Louisiana Congressman William Jefferson to hide cash in a freezer and no corporation held a gun to any member of Congress that used their ever broadening powers to legislate and regulate commercial affairs to personally enrich themselves.

For all the talk of getting money out of politics, corporations often seem to be the diversionary scapegoat while the politicians try to get at the money. The idea that free of the influence of money politicians will suddenly lose their appetite for power, control and self-aggrandizement is delusional. It has no basis in human history, in psychology or, frankly, in common sense. Money in politics, as I noted after President Obama announced his “evolution” on gay marriage, is a good thing. Politicians are interested in self-preservation, not because corporations made it so, but because it’s in the nature of a politician. The influence of money in politics, be it corporate money, small donors, big donors or advocacy groups, serves to diversify the voices that reach government and provides a necessary check and balance to any politician’s tendency to self-enrichment.

Money is no resource to shun on the quest for the White House; there’s no reason money can’t lubricate a free market in politics the way it makes the everyday exchange of goods and services so smooth and efficient, when government’s not getting in the way.

Rather than imposing limits on campaign contributions, we need to remove the perverted incentives that invite an influx of money to Washington and distort free markets.

A good place to start is by scrapping the entire federal tax code – where individuals, groups, and corporations are constantly looking to curry favor and gain preferential treatment.

Next up are all the frivolous regulations that perpetuate the corporatist (crony-capitalist) machine. Regulators themselves often lack a sophisticated level of familiarity regarding the industries they’re supposed to be regulating. Lobbyists end up flocking to Washington each time a new regulatory board is created, salivating like Pavlov’s dog over the opportunity to write the regulations for their own industry rather than those actually tasked to regulate. Through regulatory capture and cartelization of industry, large incumbent corporations are able to suppress competition in their particular market.

This type of behavior is textbook rent seeking. Public choice explains how the phenomenon occurs:

In modeling the behavior of individuals as driven by the goal of utility maximization … economists do not deny that people care about their families, friends, and community. But public choice, like the economic model of rational behavior on which it rests, assumes that people are guided chiefly by their own self-interests and, more important, that the motivations of people in the political process are no different from those of people in the steak, housing, or car market. They are the same human beings, after all. As such, voters “vote their pocketbooks,” supporting candidates and ballot propositions they think will make them personally better off; bureaucrats strive to advance their own careers; and politicians seek election or reelection to office. Public choice, in other words, simply transfers the rational actor model of economic theory to the realm of politics.

Moreover, the idea that regulation is necessary to protect people is muted by the fact that basic protections for producers, consumers, and non-actors alike already exist in common law principles: fraud, collusion, nuisance, unconscionable bargain, duress, and undue influence. Rather than focusing time and energy on the futile exercise of trying to limit money from electoral politics, we should focus on eliminating policies that create conditions in which free markets get taken hostage.

Cross-posted at Examiner.com

Image via Google Images

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