I am pleased to welcome Diana Dwyre and Robin Kolodny to the ELB Book Corner, authors of the new book, The Fundamentals of Campaign Finance: Why We Have the System We Have (University of Michigan Press). The 30% discount code for ELB readers is UMF24. The book is also available in open access: https://doi.org/10.3998/mpub.9813302. This is the first of three posts.

Capitalism, Campaign Finance, and Policymaking

We are grateful to Rick Hasen for the opportunity to post about our new book, The Fundamentals of Campaign Finance: Why We Have the System We Have. Our posts highlight the book’s arguments, using edited excerpts from the book.

Today’s post highlights one of the book’s central themes: the U.S. campaign finance system exists in and is fundamentally shaped by the American capitalist economic system. This is not news to ELB readers, but it helps explain why our book does not offer a remedy for a broken campaign finance system. From the first elections in the new republic to today’s complex system of rules for financing elections at all levels, free market principles and practices influence how money is raised and spent in elections, who gets elected, and what policy solutions are possible. The founders were keenly aware that the unequal distribution of resources naturally occurring in a free-market system would be the basis of much of the nation’s political conflict. The new government was designed to manage these conflicts so that those with fewer resources (a majority) did not deny those who control more resources (a minority) their right to economic liberty in the free market economy. Thus, it is not surprising that there was never a doubt that America’s campaigns would be paid for with private rather than public sources of money.

At first, wealthy men used their own money to stand for office. Then, as parties emerged and ran career politicians for office, campaign funds came from government workers who owed their jobs to the party in power, a system ended by the Pendleton Act in 1883. As America industrialized, corporations poured money into campaigns to ensure a minimal regulatory state, and party bosses nominated candidates friendly to corporate interests. Eventually, Congress banned corporate contributions (with the 1907 Tillman Act), required disclosure, and imposed spending limits (with the 1910 Federal Corrupt Practices Act and its 1911 and 1925 amendments). Yet, without effective enforcement, these reforms were largely ignored. Even as Democrats began to receive campaign support from newly powerful labor unions in the 1930s, both parties were (and still are) largely reliant on corporate funders for campaign resources. Today, we often hear that corporate influence in our political system has reached unprecedented levels. Increasing corporate campaign spending (not adjusted for inflation or population growth) is cited as evidence. If the reported money today surpasses the figures from 1976, it is assumed that influence is on the rise. Yet, corporations influence policymaking in other, perhaps more effective ways as well.

We tie arguments about business’s structural power to the fundamentals of campaign finance. Do you ever wonder why the political reaction to a major economic catastrophe such as the 2008 global financial crisis is to make only minor policy adjustments? We remind our readers that 84% of Americans work for the private sector. Business leaders do not have to make campaign contributions to influence lawmakers, as they can threaten to lay off workers or move operations elsewhere if elected officials do not support their preferred policies (Lindblom 1982). Powerful interests also use what Bachrach and Baratz (1962) call the “second face of power” to keep issues off the political agenda that are contrary to their interests, such as universal health care and strict environmental regulations. We should expect businesses to do what they can to portray policy issues as benefitting the ‘average’ American, and to ensure that lawmakers do not try to counter their interests, corporations closely monitor officials by spending far more on lobbying than on financing campaigns.