The system assumes that private money is evil, that elaborate rules can squeeze out the money, and that the squeezing can be done without infringing on core political freedoms, notably freedom of speech. Wrong, wrong, and wrong. Private money is not an intrusion into politics, it is a part of politics. It can be channeled but not eliminated, nor even reduced more than a little. The attempt to regulate money out of politics mainly pays for the vacation homes of lawyers, while restricting and, increasingly, even criminalizing ordinary political activity.
Washington framed the current campaign-finance laws in the 1970s, around the time it was also trying wage-and-price controls and energy rationing. The latter two policies are long gone and gratefully forgotten, but the dysfunctional 1970s campaign-finance system remains, and continues to command the intense and often dogmatic loyalty of the generation that saddled us with it. True, Washington just “reformed” it. I use the quotation marks because the newly enacted McCain-Feingold-Shays-Meehan bill is no more a real reform than was Mikhail Gorbachev’s perestroika. The new law contains one provision—its unprecedented crackdown on political advertising by advocacy groups—that is blatantly unconstitutional, but the Supreme Court will probably knock that out. What will remain is a law that will do some sensible things, on the margins, and also maybe a few not-so-sensible things. But mostly it just piles new 1970s-style rules on top of the old 1970s-style rules, which means it won’t work. In the long run, the McCain-Feingold-Shays-Meehan bill’s most useful contribution will be to help demonstrate the futility of patching the 1970s system.
A growing number of reformers—no quotation marks, this time—understand as much. Several states are experimenting, so far pretty successfully, with “clean money” options that publicly finance candidates who turn down private money. On the right, thinkers like Bradley A. Smith (now a member of the Federal Election Commission) are building a formidable, if not wholly satisfying, case for outright deregulation. Then there is the Jonathan Rauch plan, a two-track system that combines the benefits of deregulation (cut red tape) with the benefits of public financing (candidates needn’t be professional fundraisers and special-interest dependents). I would provide generous public financing for candidates who didn’t raise or accept private money (though parties could raise it for them), but—unlike the “clean money” reformers—I would also eliminate all limits except disclosure on candidates who decided to finance their campaigns privately. Instead of trying to squeeze out private money, the Rauch plan would simply provide an alternative to it and let the voters choose. I thought I was a radical—but then Bruce Ackerman and Ian Ayres came along.
“Campaign finance lives in a time warp, untouched by the regulatory revolution of the past generation,” they write. “Command and control, bureaucratic subsidies, and full information are part of the problem, not part of the solution.” Their answer is ingenious and audacious. The problem is not too much money and too little information, they say; it is too little money and too much information. Candidates have to beg for scarce dollars from donors whose identities they know, with battalions of lawyers monitoring (and gaming) every transaction.
Ackerman and Ayres, who are both professors at Yale, propose instead to require that all political contributions be anonymous. You could give as much as you wanted to as many politicians as you liked, but the money would go through a blind trust administered by the government. True, you could then simply tell the candidates about your donations. The candidates, however, would have no way of checking, because all contributions would be made through an anonymous “donation booth.” The donation booth, like a voting booth, would be shrouded in secrecy: Except for small contributions of $200 or less, no records would link supporter to candidate.
Private donations would fall off somewhat if donors couldn’t take credit for them. So Ackerman and Ayres further propose to give every voter a $50 voucher to donate to one or more politicians of her choice. That’s about $5 billion—more than the total spent on political campaigns in 2000. The money would be completely clean, and it would be dispensed by people rather than bureaucrats. Candidates would market themselves to voters, saying, “Here’s why I deserve your voucher.” That would draw ordinary people into the system as political donors. End result: more money, more speech, more participation, more equality. And fewer lawyers.
The devil is in the details, and the details are devilish. When the authors start considering political action committees, independent issue advocacy, and “early money” for candidates first launching their campaigns, things get complicated. The authors devote three appendices, a 40-page model statute, and much of the rest of the book to explaining exactly how their system would work. Even so, every reader will find things to quibble with. For instance, their scheme to offset the effects of independent political advertising won’t work and isn’t necessary (private political speech is an asset, not a “threat”).
Still, three points weigh strongly in Ackerman and Ayres’ favor. First, their book is genuinely innovative without being silly or naive. Second, their approach, whether or not you buy it, is realistic and built on real-world premises, which the current regime is not. Third, the creative radicalism of Voting with Dollars can only help jolt Washington’s campaign finance “reformers” out of their 25-year rut.