Political Reform and Varieties of Libertarianism

February 14, 2014
posted by Bob Bauer

In the coming campaigns, in 2014 and beyond, political reform is certain to be a topic for discussion. The press will look for a clear statement of the candidate’s positions; the Supreme Court will decide at least one more case that will excite comment and lead to proposals; and certain other prominent issues, such as income inequality and government performance, lead naturally to arguments about campaign finance and lobbying reform. We can imagine, too, that the candidates in addressing these issues will sort out as they most always do—Democrats supporting reform that Republicans find objectionable, with the divide displayed sharply in competing depictions of the soundness and effects of Citizens United.

This time around the debate may be joined, again, by a candidate from the libertarian wing of the Republican party, Rand Paul, or another.  It might be assumed that such a candidate will express unyielding opposition to government regulation of political activity. And while Richard Epstein has argued that not all those professing libertarian commitments think the same way, a skepticism about controls on, say, campaign finance, seems to unite them.

Yet one consistent characteristic of libertarian thought—and it is certainly pronounced in the populist version we might see in a political campaign—rests on uneasy terms with the generally implacable resistance of the regulation of politics.  This is the concern with corruption in (and of) government.  Libertarians are naturally worried that government, especially big and complicated government, can be hijacked to illicit purposes by collusion between large corporate interests and government officials.  This fear appears in theoretical writing and in political programs.  “Populist libertarianism,” Ross Douthat has pointed out, tends to call for “unwinding webs of privilege and rent-seeking.” reflecting “suspicions of big government and big government.”

One libertarian answer allows for regulation to address corruption but would draw it narrowly, and in this view, the laws already on the books are enough to do the job.   This is how the Chair of the Cato Institute, Robert A. Levy, has  argued the point, responding to the question: “are there any campaign contributions or expenditures that should be illegal?”

Yes: First, misuse of a government office by favoring donors who seek government contracts and services. That would breach an official’s fiduciary responsibility to his constituents. Second, payoffs to a candidate—secretly contributed, then spent on personal pleasures like a new car. Numerous laws are already on the books to prosecute such abuses.

This view concedes that anti-corruption regulation is in order, but that it needs to be targeted carefully at government officials who violate their fiduciary responsibilities or at personal  bribes paid surreptitiously to candidates.  The lines drawn here are meant to keep the government out of the control of political speech—contributions to candidates used for campaign purposes, or independent spending for this speech.   Levy makes this clear:

But when a candidate fully discloses a donation and puts the money in a segregated fund that can be used only for constitutionally favored political expression, that is not corruption. And the First Amendment does not allow treating advocacy as if it were a bribe. Our system may not be perfect; but it is, after all, the system that the Constitution has established.

This position cannot account for the stubborn “appearance” of corruption. The laws on the books have made little headway in quieting American suspicion of their government . Then, again, the leading scholarship on the subject suggests that campaign finance reform does not correlate with improved citizen attitudes toward their government.  A libertarian would not be moved in the light of this research to entertain regulation intended but unlikely to deal with the appearance problem.

Then there is the response of the libertarian political program—a “populist”  program that by definition and the operation of ordinary politics would have to answer voter demand for something to be done about corruption.  A libertarian candidate would be at pains to confess that the rampant corruption he or she denounces be allowed to run largely unchecked, only weakly contained by a reliance on existing law.  If the law were adequate, after all, why would there be so much corruption?  Few candidates can afford a show of passivity in the face of this threat.

We see one interesting direction the response could take in a proposal that Rand Paul has made.  He vociferously opposed McCain-Feingold, characterizing it as a “blatant violation” of the First Amendment.  But he has also alleged pervasive  corruption in government, focusing on the lure of government contracts. Congress had an obligation, he argued, to “remove corruption while still honoring individual liberty.”  Companies with major business before the government have powerful incentives to keep and enlarge the flow of taxpayer funds, and they have at their disposal well-paid lobbyists and campaign spending programs to protect this business interest.

To counter this systemic corruption, Paul proposes this:  companies bidding for contracts with a value in excess of $1 million would agree, as a condition of doing  business with the government, “not to lobby government or contribute to campaigns during the terms of the contract.”   Paul has not said whether this pledge would include refraining from independent expenditures, though it is difficult to see how it would be effective to allow for unlimited expenditures for the benefit of candidates while prohibiting only small, dollar-limited contributions to their campaigns.  Either way, this type of proposal does not stop at enforcing fiduciary responsibilities and bribery law but imposes indirectly, as a price of contracting with the government, a prohibition on political activity.

This seems to break with the libertarian “primer” on campaign finance and its core position that “the First Amendment does not allow treating advocacy as if it were a bribe.” The proposal’s feature of  “voluntariness” has a sharp edge: either volunteer to suspend political activity, or suspend further business with the federal government.  And there is a further regulatory dimension to this proposal. The pledge once given is subject to enforcement, and a violation would lead to termination of a contract and, presumably, disgorgement of benefits previously received.  A libertarian critic might also fear that once this proposal is adopted, the government might come under pressure to adopt coercive measures if the voluntary ones appear to fail.

The next campaigns may expose these tensions between libertarian campaign finance theory and populist libertarian politics.  The arguments over reform may take place within and not only between the political parties.

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