Monday, July 7, 2014

This is not a democracy: How the Supreme Court allowed the 1 percent control

This is not a democracy: How the Supreme Court allowed the 1 percent control

When the Supreme Court decided money is speech, it unleashed an equality-destroying monster

Paul Krugman, a 2008 nobel laureate in economics, characterizes the 160 years between the “Wealth of Nations” and the Great Depression as the time in which a new faith manifested: “[A]n extensive body of economic theory was developed whose central message was: Trust the market.” Krugman calls faith in the market the “basic presumption of ‘neoclassical’ economics.” The story of this faith is the story of many twists and turns—nothing less than the history of American capitalism.
The Great Depression and John Maynard Keynes’s calls for government intervention—including changes in fiscal policy and public works projects—diminished collective trust in the market. But shortly after the Keynesian revolution, Milton Friedman led a new push against government intervention under the guise of monetarism. Krugman describes the 1970s, Friedman’s moment, as a time when “[d]iscussion of investor irrationality, of bubbles, or destructive speculation had virtually disappeared from academic discourse,” replaced by “the ‘efficient-market hypothesis.’” That hypothesis “held that as more stocks, bonds, options, futures, and other financial instruments were created and traded, they would inevitably bring more rationality to economic activity.” There was an emerging consensus that prices in the market were a reflection of full information and that the market produced the right goods for the right people at the right prices— i.e., people could not beat the market and the market allocated resources without wasting them. The implication, as Justin Fox points out, is that “markets possessed a wisdom that individuals, companies, and governments did not.”
Although Friedman was a complex figure, it is fair to say that he was a leading proponent of the view that markets were “better, and far more accommodating of human liberty, than government.” He was, in his own words, “deeply concerned about the danger to freedom and prosperity from the growth of government.” Friedman understood his own work as a response to the “readiness to rely primarily on the state rather than on private voluntary arrangements to achieve objectives regarded as desirable” and noted that his contrary position had for long been associated with a “small beleaguered minority regarded as eccentrics.” He labeled as a “flash of genius” Adam Smith’s discovery that “the prices that emerged from voluntary transactions between buyers and sellers . . . could coordinate the activity of millions of people . . . in such a way as to make everyone better off.” “The price system,” concluded Friedman, “is the mechanism that fulfills this task without central direction.”
This faith in markets—-markets as wise, efficient, free, and in any case better than government—was bolstered in 1976 when Friedman was awarded the Nobel Prize. That same year, the Supreme Court converted the ongoing celebration of market wisdom into judicial reasoning in what would become one of the most important constitutional law opinions of all time.
Buckley v. Valeo served as the Supreme Court’s referendum on a new era of campaign finance reform. From the colonial era through the New Deal era, limitations on money in politics were accomplished in a piece-meal fashion. The Federal Election Campaign Act (FECA) of 1971 and a second bundle of reforms under the same name passed in 1974 contained a comprehensive approach to campaign finance, an unprecedented effort by Congress. Still, this comprehensive approach resulted from specific scandals, most notoriously Watergate. Although Nixon himself signed the first bundle of reforms into law, his “reelection committee then went on to funnel illegal corporate contributions into slush funds, pay for breakins and trade cash for favors.” It came to light, for instance, that the “Milk Producer[s’] Association pledged $2,000,000 to President Nixon’s campaign for reelection . . . at the same time as the Nixon Administration granted an increase in the support price of milk.” Nixon followed through on his promise and “[d]airy farmers netted over $500 million due to this policy shift.” Such events led to an overhaul of the legislation that Nixon himself had signed. The amendments “attempted to give practical vent to the shame and guilt aroused by the whole sorry spectacle.”
With its various amendments included, FECA contained limits on how much money individuals and political action committees could give to campaigns (contribution limits), limits on how much money candidates and campaigns could spend (expenditure limits), public disclosure requirements, an administrative agency to enforce election law (the Federal Election Commission), and provisions for the voluntary public financing of presidential campaigns. The Court was asked to invalidate all of these provision
To this day it is Buckley—not FECA and not Congress—that provides the essential constitutional baselines for state and federal legislation seeking to limit the role of money in politics. As the Roberts Court put it in 2006, “Over the last 30 years, in considering the constitutionality of a host of different campaign finance statutes, this Court has repeatedly adhered to Buckley’s constraints.” Buckley struck down FECA’s limitations on expenditures by candidates and campaigns. Much of American democracy as we know it today can be explained by the fact that there is no limit to the total amount of money that candidates and parties can raise and spend, and that virtually all of that money comes from private sources, not the state. Even granting the monumental importance of Buckley’s holdings, however, Buckley’s ideological reasoning about what the Constitution means has proven equally significant. The value judgments featured in the opinion amount to an efficient-market hypothesis made binding. Inspiring subsequent holdings and constraining lower courts and legislatures, state and federal alike, those value judgments have been treated as sacred until the present day.
I. Democracy and capitalism entangled
The Buckley opinion gives no sign of authorship. It was signed “per curiam,” by the Court as a whole. Central to its outcome are a series of instances in which the Court relied upon economic principles to discern the meaning of the Constitution. This adoption of economic values as binding political values stands as the deeper meaning of the Court’s 2006 remark and the reason why anyone who wishes to understand the free market Constitution must get acquainted with Buckley’s theory of democracy.
A. Constitutional Alchemy

Buckley converts a heavy, coarse element into something precious. The process starts attractively and easily garners assent: “Discussion of public issues and debate on the qualifications of candidates are integral to the operation of the system of government established by our Constitution.”
Agreed. “In a republic where the people are sovereign, the ability of the citizenry to make informed choices among candidates for office is essential, for the identities of those who are elected will inevitably shape the course that we follow as a nation.” Yes. The First Amendment “has its fullest and most urgent application precisely to the conduct of campaigns for political office.” Indeed. “[D]ebate on public issues should be uninhibited, robust, and wide-open.”This string of statements resonates so strongly that the audience is unlikely to muster a critical thought. The Court has employed charged words; it is as though a magnetic field has developed.
Into this magnetic field, the Court then introduced a fundamental element. “[V]irtually every means of communicating ideas in today’s mass society requires the expenditure of money.” To the “humblest handbill or leaflet,” money grants printing and circulation; to “speeches and rallies,” a venue and publicity; to the massive American “electorate,” news and information via television, radio, and papers of record. Now the implication is clear: the congressional limits placed on monetary expenditures reduce the “number of issues discussed, the depth of their exploration, and the size of the audience reached.”
The Court has set in motion a process of conversion. We might imagine economic currency flying through a circular track built on the progressions above. With each loop, its speed increases. First: political debate, informed choice, elected leaders, the fate of the nation, the humblest leaflet, the fullest expression of the First Amendment, political liberty, robust debate in our mass society. Next: money communicates ideas in our vast land, regulation impoverishes debate, information for the electorate, communication requires resources. Finally: money is expression, regulation is censorship, money . . . liberty, money . . . democracy, money . . . speech. Contained in these trajectories, charged by the weightiest of constitutional principles and enlisted in the service of the nation’s political life, economic currency becomes democratic currency. The Court’s act of constitutional alchemy is comparable to the work done by particle accelerators in the natural world. It is only by crashing money at high speeds into the target object of American democracy that the Court transmutes it into speech.
Despite the significant power of this process, some still manage to see a difference between speech accessible to virtually everyone—such as speaking with people in a public square, handing out 1,000 leaflets, posting position papers on a website or blog, or organizing a protest in the town square—and speech acquired only through wealth. The latter might include a full-page ad in the New York Times, a political advertisement on ABC tested by focus groups and refined by psychologists, or the hiring of a major convention center for a rally with more provisions than Disney Land. The accessible sort of speech is really just speech, while the kind inaccessible to most Americans is less a matter of speech as such, and more a matter of making one’s speech influential.
But the opinion refuses to acknowledge any difference:
[T]his Court has never suggested that the dependence of a communication on the expenditure of money operates itself to introduce a nonspeech element or to reduce the exacting scrutiny required by the First Amendment.
The transformation is complete. If money is used to purchase speech, the money itself becomes part of the public sphere of politics and its ties to the economic sphere are cast off, rendering it too pure for most any regulation. Regulators and campaign finance reformers could be forgiven for thinking that money was property and that the expenditure of money was conduct.
The Buckley appellees made this argument. They drew an analogy between limits on money in politics and prohibitions on burning draft cards, noting that “any effect on communication is incidental” and that “the harms result[ed] directly from unlimited money, not from unlimited speech.” Their brief provided another excellent argument destined for failure: “We are dealing here not so much with the right to personal expression or even association, but with dollars and decibels. And just as the volume of sound may be limited by law, so the volume of dollars may be limited, without violating the First Amendment.”Only after exchange in a market, the logical mind grasps, could speech issue from chattel.
The Court was unsympathetic: “Even if the categorization of the expenditure of money as conduct were accepted, the limitations challenged here would . . . involve ‘suppressing communication’ [and] include restricting the voices of people and interest groups who have money to spend.” The Court also held that the monetary limitations were not analogous to restrictions on the time, place, or manner of speech, which are often upheld by the Court. Unlike regulations on picketing, parading, and sound trucks, the Court noted, the “Act’s contribution and expenditure limitations impose direct quantity restrictions on political communication and association by persons, groups, candidates, and political parties.”
Once the Court minimized the differences between money and speech, and consecrated money’s enabling effect on speech, limits on money in politics became limits on political expression itself—censorship—and therefore deserving of strict scrutiny. In order to restrict spending that produces speech, the government interests justifying the regulations must be compelling (i.e., extremely weighty in the Court’s view) and the means chosen to accomplish them must be narrowly tailored so as not to burden speech unnecessarily. While economic regulations are presumptively constitutional, speech regulations are presumptively unconstitutional. If economic power wishes to continue translating into political power, it must avoid regulation. Avoiding regulation requires that economic power be transformed into something politically legitimate, and nothing is more legitimate in the political sphere than speech.
Something vulgar becomes something precious—this is the function of constitutional alchemy. Speaking of the “forms and phrases of classical democracy,” the economist Joseph Schumpeter noted its design: “Any opposition to an established regime is likely to use these forms and phrases whatever its meaning and social roots may be. If it prevails and if subsequent developments prove satisfactory, then these forms will take root in the national ideology.” From the bench, Justice Potter Stewart heralded its victory: “[M]oney is speech and speech is money, whether it is buying television or radio time.”
Ultimately, Buckley’s alchemy ought to be understood in terms of property. The significance of money’s newfound status as speech is that donors and spenders can leverage First Amendment protection in order to avoid regulation. This allows them to obtain a greater share of the market for political power. By making money into speech, the Court ensured that the rich can enjoy more speech than the poor; and by refusing to undo this burgeoning market, the Court allowed political influence to become a commodity. Commodities must be property in order to be salable, for one cannot buy what is not owned. Contracts are only the vehicle for transferring ownership and, as such, are less meaningful than the body of law that makes ownership possible. And thus Mill’s remark on expansive property laws can be applied to Buckley, which by conflating property and speech has “made property of things which never ought to be property, and absolute property where only qualified property ought to exist.”
The Court did not take the prerogative of monetary speech as far as it could have, however. It validated the act’s contribution limits on the basis that they burdened freedom of expression considerably less than expenditure limits: “The quantity of the communication by the contributor does not increase perceptibly with the size of his contribution [which a]t most . . . provides a very rough index of the intensity of the contributor’s support for the candidate.”The contribution limits restricted donations to candidates and political committees only, not any other use of money for political purposes. So long as expenditures remained unregulated, contributors could turn their dollars into other forms of political expression.
The majority opinion noted that such “transformation of contributions into political debate involves speech by someone other than the contributor.” And yet contributions are essential to political debate within a system of privately funded campaigns. The Court could have invalidated the contribution limitations on the basis of this fact. Instead, it reached a compromise:
The overall effect of the Act’s contribution ceilings is merely to require candidates and political committees to raise funds from a greater number of persons and to compel people who would otherwise contribute amounts greater than the statutory limits to expend such funds on direct political expression, rather than to reduce the total amount of money potentially available to promote political expression.
The Court’s tolerance of contribution limits preserved a central component of campaign finance reform. Still, the fact that the Court found no reason to limit the total amount of money spent reveals a great deal about its theory of democracy (and the news for campaign finance reformers would not be good). Congress had provided a number of reasons to limit both contributions and expenditures, but the majority of those reasons struck the Court as impermissible state intervention in the political market.
B. Dispensing with Corruption

Relying on the statements by the parties and amici, the Court discerned three governmental interests behind the act: (1) “the prevention of corruption and the appearance of corruption spawned by the real or imagined coercive influence of large financial contributions on candidates’ positions and . . . actions”; (2) “mut[ing] the voices of affluent persons and groups in the election process and thereby equaliz[ing] the relative ability of all citizens to affect the outcome of elections”; and (3) slowing “the skyrocketing cost of political campaigns and thereby . . . open[ing] the political system more widely to candidates without access to sources of large amounts of money.”
Noting our private system of campaign finance and increasing reliance on expensive media and polling technologies, the Court highlighted the importance of private contributions to candidates. Still, it considered the first government interest to be constitutionally sufficient in its relationship to democracy’s design: “To the extent that large contributions are given to secure a political quid pro quo from current and potential office holders, the integrity of our system of representative democracy is undermined.” The Court then validated concerns over the appearance of corruption, considering such concerns “critical . . . if confidence in the system of representative Government is not to be eroded to a disastrous extent.” Amidst these noble words, this victory for reformers, we must retain our bearings, lest we miss the fact that the same breath that uttered these words defined corruption narrowly as a quid pro quo.
Observing that the expenditures limited by the act were not prearranged or coordinated with candidates or campaigns, the Court found it difficult to understand how they could produce corruption. Writing that the lack of ties between independent expenditures and candidates “alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate,” the Court revealed the significance of its narrow definition of corruption. Defined only as an improper exchange of favors for money, corruption is not implicated by citizens, independent of any campaign, using their money to speak their minds.
Surely politicians’ favor could be earned just as easily by an uncoordinated media campaign that tipped an election their way as by direct contributions. But the Court’s reference to “improper commitments” seems to also remove from corruption’s definition that most natural of human phenomena—that we take care of those who have ingratiated themselves to us. Greater attentiveness to favorable donors and spenders would not be corruption in the Court’s view and, in any case, it is very difficult to prove. Citizens may dedicate their money to political expenditures in order to promote points of view and candidates endorsing those points of view. It could just as easily be the case that politicians are successful when their views line up with the views of society’s influential members, as it could that politicians provide legislative favors when those influential members advance, however indirectly, their campaigns.
Turning to limits on expenditures by candidates, the Court found a positive relationship between big spending and democratic integrity: “[T]he use of personal funds reduces the candidate’s dependence on outside contributions and thereby counteracts the coercive pressures and attendant risks of abuse to which the Act’s contribution limitations are directed.” This finding hinges on a view of corruption that sees no impropriety in the enjoyment of substantial advantages by wealthy candidates relative to poor candidates. Is there nothing corrupt about a system in which the great majority of congressmen and presidents are wealthy? Is there no appearance of corruption when candidates with more money to spend enjoy a substantial advantage? If money is speech, then these questions are answered in the negative. Translating money into political activity renders it desirable, not a source of corruption but a source of information for the electorate.
Because the anti-corruption interest was held insufficient to justify expenditure limits, the opinion turned to the matters of equality and rising campaign costs at the heart of the remaining two government interests. The Court’s conclusion that unlimited expenditures are more expressive of democracy than corruptive of it provides a clue as to what comes next. After converting money into speech, the Court plunged further into the free market vortex by declaring equality an unconstitutional goal.
C. Economic Alchemy
In an old-fashioned sense, the amount of speech one can produce depends on how many points one has to make, how much energy one has to talk, and whether one can stir up enough goodwill to convince others that it is worth their while to listen. In the Buckley sense, it depends only on how much money one has to spend. Although not everyone has points to make, everyone does have interests to further; money purchases others’ time in the generation of expedient points. Not everyone has energy to make the points one has; money acquires the energy of others to do so. Certain actors and interests engender little goodwill; money buys the media time and packaging necessary to ensure an audience.
It is tempting to adopt Buckley’s reasoning on the basis of our mass-media culture alone. Owen Fiss writes: “[T]oday there are no street corners, and the doctrinal edifice that seems . . . so glorious when we have the street corner speaker in mind is largely unresponsive to the conditions of modern society.” And yet, there are still street corners and one still observes local rallies and neighborhood groups. Fiss’s point must simply be that the conditions of modern society render humble political forms ineffectual. The noted philosopher Michael Walzer gets to the heart of the question:
It’s often said that the exercise of these freedoms [of speech, press, religion, and assembly] costs money, but that’s not strictly speaking the case: talk and worship are cheap; so is the meeting of citizens; so is publication in many of its forms. Quick access to large audiences is expensive, but that is another matter, not of freedom itself but of influence and power.
Economic power, the gatekeeper of the most influential forms of political communication, is unequally distributed, and so we can surmise that political power itself will, absent strong regulations, tend to trace the outlines of economic inequality. Buckley’s transmutation of money into speech feeds the source of political inequality that Congress sought to restrain.
For example, take Peter Buttenwieser, a particularly forthcoming member of the political class. “I am close to a number of senators and see them on a very consistent basis,” he writes. “I understand that the unusual access I have correlates to the millions of dollars I have given to political party committees, and I do not delude myself into feeling otherwise.” The late Senator Paul Simon was also unusually candid: “[If] there were twenty phone calls waiting for me, nineteen of them names I did not recognize and the twentieth someone I recognized as a $1,000 donor to my campaigns, that is the one person I would call.” Nobody denies that contributions and expenditures can be instrumental in gaining access to officeholders. Moreover, as the Buckley Court knew, a disproportionate number of presidents and members of Congress have been wealthy. Justice Marshall spelled out a reason for this in his separate opinion:
[The] ability to generate contributions may itself depend upon a showing of a financial base for the campaign or some demonstration of pre-existing support, which in turn is facilitated by expenditures of substantial personal sums. The wealthy candidate’s immediate access to a substantial personal fortune may give him an initial advantage that his less wealthy opponent can never overcome. And even if the advantage can be overcome, the perception that personal wealth wins elections may not only discourage potential candidates without significant personal wealth from entering the political arena, but also undermine public confidence in the integrity of the electoral process.
Buckley’s confrontation with these issues came at one of the many times when equality was a particularly unstable concept. Tocqueville called it “an irresistible revolution which has advanced for centuries in spite of every obstacle.” Just how far equality was advancing was a question deeply tied up with FECA. The underlying issue in Buckley was whether the Supreme Court would concur in the irresistibility of this ongoing revolution. Equality’s forward march was particularly fruitful in the 1960s and early 1970s, to a degree uncommon perhaps since the passage of the Fourteenth Amendment. These were the years that immediately preceded Buckley, the years that had shaped the Justices’ sense of social change, and that colored, for better or worse, their view of what Buckley was really about.
John Rawls’s “A Theory of Justice” and the first installment of FECA were both published in 1971. They were apparently being drafted at the same time, and both pursued a holistic vision of political values. It is no coincidence that vigorous efforts to enforce the Civil Rights and Voting Rights Acts were ongoing. This was the time when equality in matters of race, religion, gender, and national origin occupied the collective consciousness and legal landscape. Why not equality in matters of socioeconomic status as well? Congress, Rawls, and, one could even say, America were coming to terms with the limits of formal equality: premising the right to vote on a literacy test was facially neutral but discriminatory in practice. Allowing enormous sums of money to influence the course of elections was also facially neutral, but discriminatory in practice. Was formal equality sufficient for American democracy, or should something closer to equality in outcomes be required? Rawls wrote:
The constitution must take steps to enhance the value of equal rights of participation for all members of society . . . those similarly endowed and motivated should have roughly the same chance of attaining positions of political authority irrespective of their economic and social class . . . The liberties protected by the principle of participation lose much of their value whenever those who have greater private means are permitted to use their advantages to control the course of public debate. For eventually these inequalities will enable those better situated to exercise a larger influence over the development of legislation.
Rawls, who later became one of Buckley’s principal detractors, developed these principles into a more formal requirement designed to ensure the “fair value of political liberties.” The mandate reads thus: “[T]he worth of the political liberties to all citizens, whatever their social or economic position, must be approximately equal, or at least sufficiently equal, in the sense that everyone has a fair opportunity to hold public office and to influence the outcome of political decisions.”
Following the observation that one’s ability to influence the outcome of political decisions and to become a candidate for office varied largely on the basis of one’s economic resources, reformers sought to narrow the gap. Their goal was not to redistribute income, but to decouple income and political influence. In contrast to the “formal equality” of all being free to spend their money on politics, limits on the total amount that could be spent would increase “material equality,” in that the ability of different groups to exercise the freedom to spend would become more equal. Formal equality is satisfied at the moment when all are free to spend. By the time the poor are spending $0–$50 and the rich $5,000–$1,000,000, it has already turned its back. Material equality, on the other hand, is staring, wide-eyed. Contribution limits, expenditure limits, and some public financing would all achieve greater parity in access to political power, not just parity in voting rights. FECA and Rawls had announced a new stage for the democratic currency of equality. The Court considered such projects to run against the Constitution itself.
In order to uproot the egalitarian agenda, the Court performed another act of alchemy. This time, instead of viewing a value in its highest form, it chose to view a value in its lowest form. Recall that if money was just money, mere property and economic currency, Congress could regulate it rather easily. But money spent for political ends was instead elevated to the status of political expression itself. Cast in a political light and viewed in its highest form, money became speech. Now, if limitations on spending were political equality in action, they would represent a strong purpose. But if limitations on spending were actually just government interference in the free market, if equality were seen not in a political light, but in an economic light, then such limitations would advance a weak goal. This is how equality was turned into scrap metal just as soon as gold was turned into speech. Or to vary the metaphor, after economic currency became the new democratic currency, the next step was to devalue the old democratic currency. This is done by evaluating it from a free market standpoint from which anything beyond formal equality is just a disfavored interference with freedom.
From “Capitalism v. Democracy: Money in Politics and the Free Market Constitution,” by Timothy K. Kuhner. Copyright (c) 2014 by the Board of Trustees of the Leland Stanford Jr. University. All rights reserved. Published by Stanford University Press.