1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

The Ludwig von Mises Institute

Advancing Austrian Economics, Liberty, and Peace

Advancing the scholarship of liberty in the tradition of the Austrian School

Search Mises.org

The Corruption of Reform

Mises Daily: Thursday, March 08, 2001 by

A
A

There was a time when the word reform described a process of renewal, of change, and of taking new steps towards correcting a problem. With the rise of campaign finance reform, it is clear that this is no longer the case. A linguistic transformation has occurred, for reform is now an inside-the-Beltway buzzword that denotes the perpetuation of the status quo: increased government interference into the area purportedly being fixed. 

Perhaps the most frequent and egregious example of this comes from Arizona’s "maverick" senator, John McCain, who for the past several years has been relentlessly pushing an overhaul of campaign finance laws. Lamenting the recent influx of soft money (the unregulated sums of money given to political parties), McCain’s "reform" is to ban it. 

In a Washington Post op-ed piece last year, McCain wrote: "Soft money’s practical effect on the legislative process is to elevate both parties’ allegiance to their chief donors above our ideological distinctions and our responsibility to address pressing national priorities." Furthermore, McCain’s most recent attempt at a campaign finance reform bill, the Bipartisan Campaign Reform Act of 2001, would prohibit unions, corporations, and independent groups from running political advertisements that mention the candidates within 60 days of a federal election. This, McCain believes, would be a "sensible first step on the long road to convincing the American people that their representatives in Congress are patriots first and partisans second." 

McCain’s co-sponsor, Sen. Russ Feingold, writes in the Harvard Journal on Legislation, "The campaign finance reform legislation I have introduced with Sen. John McCain, the McCain-Feingold bill, would end the pernicious influence of soft money."

But such "reforms" will not end, nor even diminish, the true corruption transpiring in Washington: plunder seeking. Special interests will increasingly attempt to influence and "make their voices heard" with politicians the more the government interjects itself in the private sector. The McCain-Feingold bill, by limiting the ability of individuals and groups to express dissenting opinions, will only serve to further centralize power in the hands of elected officials. 

It is often said that whenever there’s a seller, there’s going to be a buyer. This is the crux of the rot and corruption transpiring in our nation’s capital. Special interests will continue to vie for political and economic favors so long as government is in a position to hand them out.

With more than 54 federal departments and agencies that impose more than $1.5 trillion in regulations or the billions of dollars handed in the form of subsidies, ignoring the federal government puts one at a competitive and financial disadvantage. 

The massive influx of soft money to political parties over the past ten years is not a sign of increased civic-mindedness on the part of business, political and independent groups; rather, it is an indication that the costs of not attempting to influence the government are increasing. The time and money spent in Washington on behalf of special interests is either an attempt to inflict harm upon others or reduce the harm to be inflicted upon themselves. 

In the above-mentioned article, Senator Feingold cites a Business Week/Harris poll that asked 400 senior executives of large corporation about campaign finance. Over 58 percent said "fear of losing influence to labor or environmental organizations or being placed in a competitive disadvantage to a rival was at least one reason, if not the major reason, for making contributions."

While the above quotation might seem to support the view that Washington has too much influence over the private sector, Messrs. McCain and Feingold believe that the Business Week/Harris poll indicates a need for more governmental control. To proponents of campaign finance reform, the fault lies not with the politicians that ring the federal dinner bell, but with those who attempt to get in line first to feed from the public trough. 

Microsoft’s current predicament can be traced to its early neglect of the Washington extortion racket. Microsoft believed that a company could operate without an army of lobbyists in Washington pushing their agenda: that is to say, the company concentrated on its customers to the exclusion of its political masters. Unfortunately for Gates and Co., this lesson was only learned after the Justice Department’s antitrust division descended upon Microsoft’s Redmond, Washington, headquarters.

Tech sector CEOs such as Oracle’s Larry Ellison and Sun Microsystems’s Scott McNealy, however, learned long ago the "rules" of the new economy and successfully orchestrated the political assault on Microsoft. The same could be said about the litigious assault brought by the state attorneys general against the tobacco companies, gun manufacturers, HMO’s, and even cell phone manufacturers. Since the onslaught of government lawsuits, these companies have stepped up their presence in Washington.

True political reform would involve limiting the ability of the 535 members in Congress to dole out aid, break up companies, confiscate trillions of dollars in the form of taxation, and bankroll various agencies that implement draconian regulations. By depriving the government the ability to choke-hold the economy, special interests would have few reasons to dispatch their army of lobbyists to Washington. Unfortunately, if the McCain-Feingold bill is any indication, "reform" is dead, for Congress has no intention of voluntarily divesting itself of power anytime soon. 

----------

Jude Blanchette, jblanchette1@loyola.edu, is sophomore at Loyola College in Maryland.