“American Democracy and the Actuality of Corruption,” by Jeff Milyo

Concerns about money in politics bring into conflict the democratic ideals of liberty, equality, and justice enshrined in the U.S. Constitution. A free society will always exhibit inequalities of wealth and hence access to power and influence, thus imperiling the ideal of equal protection of the law. But efforts to regulate political activities, even setting aside potential hidden and nefarious motives, also violate the fundamental principles of free speech, association, and petitioning for redress of grievances (i.e., lobbying). Any democratic society must resolve this unfortunate tradeoff; American democracy does so in favor of liberty.

The U.S. Supreme Court decision in Buckley v. Valeo (1976) may be viewed through this lens. The Buckley decision makes clear that the government’s interest in regulating politics is confined to policies that are narrowly tailored to address the actuality and appearance of quid pro quo corruption. As such, Buckley establishes bright lines for the kinds of regulation of political financing that may or may not pass Constitutional muster. For example, limits on the source and size of campaign contributions to candidates are permissible since they raise the specter of potential quid pro quo arrangements, but an outright prohibition on an individual’s ability to support candidates or parties of their choosing goes well beyond what might be thought necessary to limit bribery and influence peddling. In contrast, limits on total spending by candidates for office are not directly related to preventing quid pro quo corruption between a contributor and candidate, so are not permissible.

There is also no anti-corruption rationale for limiting the amount of self-financing by candidates, since candidates cannot corrupt themselves. Similarly, as the Court noted in a later case, there is no anti-corruption rationale for limiting sources or amounts of financial support for speech on ballot initiatives; no amount of spending can change the wording of a ballot proposition, so no quid pro quo is possible via campaign financing of ballot measure campaigns.

These constraints on government regulation of political campaigns are straightforward implications of the anti-corruption rationale expressed in Buckley, but critics of the decision have muddied the waters by seeking to expand the concept of corruption to envelope “undue influence.” This is definitely a more vague concept and not really amenable to bright line distinctions. Indeed, in thirty-plus years, I have never once heard anyone articulate a definition of “due influence.” Instead, advocates of more regulation offer a modern miasma theory of corruption, whereby too much money and too much influence (most often by those who hold contrary views) constitute corruption.

But for citizens to engage vigorously in self-governance, they must be confident that their efforts are lawful. The entire point of democracy is for people to exert influence over their government, so there must be some sphere of clearly permissible involvement, including the ability to materially support groups and candidates. Otherwise, citizens are never sure when they’ve crossed the line and are engaging in “undue influence”; that uncertainty undermines the free exercise of our fundamental rights to speech, association, and petition.

The alchemy of transforming quid pro quo corruption into concerns about too much money in politics is, in some respects, a brilliant stratagem by those seeking more speech limits. It makes the definition of corruption subjective and facilitates appeals to public opinion regarding whether there is too much money in American politics or whether the political system is corrupt.

If you ever wanted to find consensus among the increasingly polarized American public, just ask them whether politicians are corrupt, or if there is too much money in politics! But my good friend and occasional co-author, David Primo, has more to say in his essay about public opinion on money in politics and the appearance-of-corruption rationale for regulating campaign finances, so I’ll defer to him on that topic. I’ll only note here that predicating the existence of individual rights to participate in the political process on the mercurial opinions of the general public invites unequal protection of the law and runs contrary to the very notion of protected rights.

I do want to be fair to critics of Buckley; their concerns about too much money in politics may be viewed through this same lens of unfortunate tradeoffs; they just put less weight on liberty than the Court. It would therefore be unfair to say that their ardor for limiting campaign spending means that they do not support free speech. I’ll state for the record that they have no problem with free speech; they just don’t want anyone to hear it. Their real concern is that political debate is not so much a marketplace of ideas but a bazaar where votes are bought and sold for cash on the barrelhead.

And this gets to a central philosophical point of difference regarding the nature of democracy. Is democracy a process for tallying the opinions of the public in order to calculate the General Will and implement the correct policy; or is democracy a process for discovering the opinions of others and ourselves, and ultimately a means of implementing compromises that the public accepts as legitimate?

The first conception of democracy most will recognize as an oversimplification of Rousseau’s theory of democracy; it is the (literally) romantic notion that, with regard to public policy, there exists a correct decision that reflects the actual will of the polity.[1] For Rousseau, in the ideal, the General Will is manifest as a unanimous decision and is obviously legitimate to all citizens. But as all men are corrupted by modernity, this ideal is never realized in our legislatures and assemblies. For expediency, we instead rely on majority rule to discover the General Will, although supermajorities are advisable for weightier matters.

Two important implications flow from this romantic view of democracy. First, the will of the majority is legitimate and has moral authority; democratic decisions are justifiably imposed on disagreeable minorities, by force if necessary, as the nay-sayers are (apparently) corrupt in their dissent. Second, the function of democracy is reduced to counting noses. People have opinions that need to be tallied up to discover the General Will. But where do these opinions come from?

For the romantic democrat, people have pre-existing knowledge of their policy preferences, so all that is left is to tally the score. Informed citizens are to the romantic democrat like Athena born fully-armed from Zeus’s forehead. Given this pinched view, political spending and lobbying only serve to corrupt the otherwise pristine manifestation of the General Will; hence, money “distorts” democracy and prevents implementation of morally correct policies. This accords with the popular view that campaign contributions are the functional equivalent of bribes; that campaign spending determines electoral outcomes; and that the “system” is corrupt and in need of reform.

But as Dave Primo and I make clear in our book, the science says otherwise. The overarching lesson from decades of empirical social science research is that money plays a much more subtle and nuanced role in American politics than feared by those advocating for limits. In short, there is a dearth of systematic evidence that campaign finance regulations reduce corruption, the appearance of corruption, or even make elections more competitive. However, the deeper point I wish to make is that the doctrine of undue influence as political corruption is flawed in theory.

In contrast to the romantic view, modern democratic theory takes a more pragmatic and functional approach. Democracy is a process by which people become informed about public issues and the implications of proposed policies; it is through open and vigorous public debate that we come to understand others’ perspectives and perhaps even come to appreciate the needs and preferences of others.[2] But it takes effort and resources to make your case to others; this is why freedom to associate with and materially support political groups is necessary for democracy, as is freedom to take arguments to the public and their representatives through campaign spending and lobbying. In this view, money in politics is a vital component of the engine of democracy; and influence is not an outside threat, but inherent and necessary for democracies to function well.

For modern and pragmatic democrats, then, the value of democracy is its openness and dynamism. All new policy ideas start out as known or held by just a few. The only way for minority views to be brought to the attention of a majority of fellow citizens is through political organization and effort. Thus, democracy is a means for policies to evolve over time, marginally and perhaps by trial and error. Political parties, money, and elections all make for a messy process that finds its legitimacy not because it implements the General Will, but because it is a means to both inform and reflect preferences that come to be held by the public over time.

To this point, whether “too much money” corrupts democracy seems to come down to whether one finds more appealing the romantic or pragmatic conception of democracy. But this game is rigged. It is a well-known mathematical result that, in general, there is no objective and unique way to characterize the preferences of a group of individuals that is based upon some tallying of the individuals’ preferences.[3] Moreover, it is also well-established that majority rule as a means to calculating a group’s preference is inherently unstable.[4]

The upshot of these mathematical theories is the following: even in a group of individuals with well-established and known preferences, there is no objective way to calculate the group’s preferences. In other words, there is no such thing as the General Will (and so democracy cannot be a means to implement the General Will). Nor can undue influence from money, special interests, lobbyists, or “that other party” be responsible for distorting policy outcomes away from a non-existent General Will. Money in politics may influence outcomes (albeit not much, and not obviously for ill), but there is no objective basis for characterizing such influence as “undue” or illegitimate. Hence, the doctrine of “undue influence” is logically incoherent; and the only meaningful concept of corruption is quid pro quo corruption, per the Buckley decision.

[1] Rousseau, J. 1762. “On the Social Contract,” Book IV, Chapters 1-2, in The Social Contract and Discourses.

[2] See: Hayek, F.A. 1960.  “On Majority Rule,” Chapter 7 in The Constitution of Liberty. Chicago, IL: University of Chicago Press; and Sen, A. 1990. “Democracy as a Universal Value.” Journal of Democracy, 10(3): 3-17;

[3] This is known as the “Impossibility Theorem”; see Arrow, K. (1951) Social Choice and Individual Values. New Haven, CT: Yale University Press; and Riker, W. 1982. Chapter 1 in Liberalism against Populism. Long Grove, IL: Waveland Press.

[4] This is known as the “Chaos Theorem”; see McKelvey, R. 1976. “Intransitivities in multidimensional voting models and some implications for agenda control,” Journal of Economic Theory (12(3): 472-482.