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The Only Way to Get Money Out of Politics

Sheldon Richman
Campaign For Liberty
Saturday, January 30th, 2010

Last week’s Supreme Court ruling striking down the ban on corporate and union spending at election time is both a blessing and a curse. On the one hand, removing a legal barrier to free speech is always a good thing in itself. Government shouldn’t dictate who can speak or from where people may get their information. This is more than a matter of abstract freedom; it’s also a practical matter. More contentiousness in politics is better than less. Free-wheeling debate is more likely to produce good outcomes than a controlled flow of information.

But there is a downside to the ruling that we should freely acknowledge. If history and recent times are any indication, big corporations and unions will use their new freedom of political speech to promote bad ideas. By “bad ideas” I mean proposals for more government interference with our lives and liberty. (Not that the spending ban kept them from doing that in other ways.)

It’s a great myth that businesses, especially big prominent corporations, want less government intervention in the economy. On the contrary, they love government power because it provides things they can’t achieve in a freely competitive marketplace where force and fraud are barred. Corporations support and lobby for interventions that benefit themselves by hampering their competitors, both foreign and domestic. You often find companies asking for tariffs and other restrictions on imports that compete too effectively with their products. Agribusinesses welcome government (taxpayer) help in selling their products abroad; they also love subsidies, price supports, and acreage allotments.

Businesses, despite public impression, routinely support regulations imposing product standards and other requirements. Why? Burdens from government rules don’t fall uniformly on all firms. Major corporations with big legal and accounting departments can handle regulations far more easily than small firms can — or one that is still only a gleam in the eye of an aspiring entrepreneur. Moreover, when government dictates product standards, say in the name of safety, it removes that factor from the competitive arena, giving companies less incentive to outdo their competitors along that dimension. This means fewer threats to the market share of incumbent firms and less chance for new challengers to make headway. It also means inferior and more expensive goods for consumers.

In American history big companies were behind virtually ever advancement of the regulatory state. Things are no different today — even under Barack Obama. It’s easy to be fooled by appearances. Banks may balk at a new regulation, but only because they prefer their government privileges with as few restrictions as possible. Major corporations lobby for new controls on and subsidies to energy production not out of concern for the environment, but because they stand to gain profits. The government is literally seen as a tool for enhancing their investments. Instead of decisions being made by entrepreneurs trying to anticipate what consumers will want, they are made on the basis of cronyism and other political considerations.

Often big companies and unions are on the same side of regulatory issues, as when the heads of Walmart and the Service Employees International Union stood shoulder to shoulder to support Obamacare. But even when they disagree, it is usually over how government should manipulate the economic system. The debate is never between regulation and hands-off.

Admittedly this is not the way the story is usually told. Business is thought to favor deregulation, while progressive forces favor enlightened government guidance. But in fact, big business (and a lot of small business too) would panic at the thought of thorough laissez faire — the end to all guarantees. The books of conservative writer Timothy Carney fully document this. Others have an interest in portraying business as pro—free markets because without the charade the public might catch on to the scam.

So here’s the dilemma: limits on free political speech for corporations and unions offend our sense of justice, but they will use free speech to pursue unjust ends. What shall we do?

There is only one answer. We must strip government of the power to dispense privileges to anyone. If we can pull that off, the problem of money in politics will evaporate.

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