Campaign Finance Reform and American Democracy

There was a period in the 1930s when citizens of the Western democracies feared that their political systems had been rendered obsolete by the authoritarian systems in place in Russia, Italy, and Germany. Fascism and communism seemed to be producing more effective economic and social results than were being attained in the struggling democracies. In the darkest days Roosevelt was being encouraged to assume dictatorial powers as the only solution. Some worry that we are entering another such phase where democracies struggle and authoritarian systems seem more effective.

Michael Ignatieff addresses this issue in an article in the New York Review of Books: Are the Authoritarians Winning?

"In the 1930s travelers returned from Mussolini’s Italy, Stalin’s Russia, and Hitler’s Germany praising the hearty sense of common purpose they saw there, compared to which their own democracies seemed weak, inefficient, and pusillanimous."

"Democracies today are in the middle of a similar period of envy and despondency. Authoritarian competitors are aglow with arrogant confidence. In the 1930s, Westerners went to Russia to admire Stalin’s Moscow subway stations; today they go to China to take the bullet train from Beijing to Shanghai, and just as in the 1930s, they return wondering why autocracies can build high-speed railroad lines seemingly overnight, while democracies can take forty years to decide they cannot even begin."

The focus of Ignatieff’s article was not on economics so much as political leadership. The United States has long been a dominant economic power; it has also assumed the leadership role in promoting liberal democracy as the goal for which all societies should strive. The ability to make the case for liberal democracy has been weakened.

"The Francis Fukuyama moment—when in 1989 Westerners were told that liberal democracy was the final form toward which all political striving was directed—now looks like a quaint artifact of a vanished unipolar moment."

The United States seems to have become a contrary example that demonstrates the inadequacies and inefficiencies of democracies.

"Faced with these resurgent authoritarians, America sets a dismaying example to its allies and friends. For two centuries, its constitutional machinery was widely admired. Now, in the hands of polarizing politicians in Washington and in the two parties, it generates paralysis."

The example Ignatieff uses to illustrate incomprehensible dysfunction is the decision by the Supreme Court (Citizens United, 2010) to conflate the power of wealth to influence the execution of government with "freedom of speech."

"America’s admirers overseas accept that money talks in Washington politics, since money talks in everybody’s politics. It is the energetic ideological justification of the dollar’s power in Washington that seems perverse."

How can the United States promote liberal democracy overseas when its internal policies seem determined to ensure the establishment of a plutocracy?

"To citizens of other liberal democracies, the Supreme Court doctrine that money in politics deserves the protections accorded speech seems like doctrinal insanity. For other Western democrats money is plainly power, not speech, and needs to be regulated if citizens are to stay free."

Ignatieff concludes:

"The liberal state is in crisis, basically, because its regulatory, legal, and political institutions have either been captured, or have been laid siege to, by the economic interests they were created to control. While the liberal state was never intended to enforce distributive equality, it was always supposed to keep the power of big money from suffocating competition and corrupting the political system. This is the task it struggles to perform today and must recover fully if it is to regain the confidence and support of the broad mass of its citizens."

Labeling Citizens United "insanity" seems appropriate. However, there are at least two people who think the decision was a good move, and since they were provided a platform to express their opinion in the journal Foreign Affairs, there must be many others.

Glenn Hubbard and Tim Kane have produced In Defense of Citizens United. It opens with this lede:

"Why Campaign Finance Reform Threatens American Democracy"

These authors identify fiscal irresponsibility as the main problem and attribute its source to campaign finance reform.

"The underlying cause of the U.S. fiscal crisis lies deeper -- in political dysfunction that began when Congress moved to control campaign expenditures through the Federal Election Campaign Act (FECA) of 1971. Much of the law was initially declared unconstitutional for violating the First Amendment, but Congress revised it in 1974, and the revised law governed elections for the following three and a half decades."

Their complaint was that those who had vast sums to spend on influencing elections were supposedly rendered mute, and alternate political parties were inhibited.

"No longer were candidates free to raise unlimited donations, nor were citizens’ groups free to express their political opinions. In short, organized political discussion and activity were left largely in the hands of the news media and the two leading political parties."

"Starting with FECA in 1974, the two main parties were essentially given government protection from smaller competitors."

The authors recognize that the winner-take-all structure of our election system favors a two-party result and makes it difficult to form a third party, but they seem to conclude that it was campaign reform that made it impossible. But not to worry, the demise of campaign funding limitations will generate a new and happier era.

"A new era of political competition, one less beholden to party bosses and more responsive to the diverse needs and interests of the American public at large, will create an unexpected opportunity….Enhanced political competition will help voters generate solutions that advance both prosperity and equity -- and, ultimately, allow the country to take back its future."

Hubbard and Kane seem to have a rather myopic view of political history. For more than a century after the Civil War we had, in effect, a three party system: liberal Democrats, conservative Southern Democrats (Dixiecrats), and fiscally conservative Republicans. The Southern wing of the Democratic Party would align itself with whatever group would assist it in maintaining its "Southern way of life." The seeds of our political dysfunction were sown when the Republican Party convinced the Southerners they had a comfortable home in the Republican Party.

What the Southern politicians have always wanted was to maintain one-party states and a low-wage workforce with as few benefits and regulatory protections as possible. They have always been in favor of a small federal government in order to exploit their workers to the greatest extent possible. This aligns them perfectly with many wealthy conservatives whose interests are more financial than social. They have not only found a home in the Republican Party, they have become the Republican Party.

Isaac William Martin has produced an illuminating study of how the rich have utilized the political and social methods of the poor and dispossessed in order to protect their wealth in his book Rich People’s Movements: Grassroots Campaigns to Untax the One Percent. Martin details how the rich have been quite busy over the last century using their wealth politically. He identifies five distinct "rich people’s movements" from the past.

1924-1929: campaign to abolish estate tax and limit income surtax rate to 25%

1936-1957: campaign for constitutional amendment limiting tax level

1951-1964: campaign to repeal federal income taxes

1978-1989: campaign for tax limitation/balanced budget amendment

1993-2001: campaign to repeal the estate tax
　
The lesson rich peoples’ activists learned from the past century was that it was not efficient to bide one’s time and wait for allies to appear or propitious moments to arrive. The lesson they learned was that the most effective strategy for them was to take over a political party.

"Rich people’s movements have been thoroughly institutionalized and thereby tamed. Many former activists are now well entrenched in the Republican Party and its allied think tanks, and their tactics are now correspondingly oriented toward inside lobbying. Some movement goals remain unrealized only because they are nigh unachievable."

Campaign funding limitations did not inhibit the takeover of the Republican Party. One can only assume that removing the limitations will accelerate movement towards the goals of the radical/wealthy right. Martin provides this conclusion:

"Rich people’s movements have a permanent place in the American political bestiary. As long as one of our great political parties is allied with the radical rich, it is safe to predict that rich people’s movements will continue to influence public policy in ways that preserve—and perhaps even increase—the extremes of inequality in America."

The United States is no longer in a position to tell other nations "Look at us, this is the kind of government you should have."