Corruption and the Political Process

I have the bad feeling that I’m going to find myself disagreeing with Larry Lessig a lot more in the next few years.

Lessig did a post today announcing that he’s going to be re-orienting his research away from copyright issues:

From a public policy perspective, the question of extending existing copyright terms is, as Milton Friedman put it, a “no brainer.” As the Gowers Commission concluded in Britain, a government should never extend an existing copyright term. No public regarding justification could justify the extraordinary deadweight loss that such extensions impose.

Yet governments continue to push ahead with this idiot idea — both Britain and Japan for example are considering extending existing terms. Why?

The answer is a kind of corruption of the political process. Or better, a “corruption” of the political process. I don’t mean corruption in the simple sense of bribery. I mean “corruption” in the sense that the system is so queered by the influence of money that it can’t even get an issue as simple and clear as term extension right. Politicians are starved for the resources concentrated interests can provide. In the US, listening to money is the only way to secure reelection. And so an economy of influence bends public policy away from sense, always to dollars.

Now, I wholeheartedly agree with his assessment that lobbyists often corrupt the political process. And certainly copyright law—an issue on which I share almost all of his views—is a prime example of that. He’s quite right that there’s no plausible policy argument for retroactive copyright extension, yet Congress did it because of the lobbying might of the copyright lobby.

But I think he gets it completely backwards when he suggests that money has corrupted the political process. My reading of history, and my understanding of governments around the world is that this kind of corruption is almost universal in politics. As long as politicians have the power to use the powers of taxation, spending, and regulation to help some and hurt others, people will expend resources to ensure that those powers are used to benefit themselves at the expense of somebody else. Money is just one tool people employ to gain an advantage in the rent-seeking game. But there are others that I would argue are just as insidious. Nepotism and cronyism, for example. Drive money out of politics and you won’t end corruption; you’ll just shift the balance of power toward people whose influence is based on things other than deep pockets.

I think it’s particularly naive to assert that “Politicians are starved for the resources concentrated interests can provide.” Politics is a zero-sum game. Regardless of the details of a country’s lobbying or campaign financing rules, politicians in a democracy will always be looking to curry favor with those who can help them get re-elected. In the United States, that’s often people with deep pockets. In other countries where campaign contributions are more tightly regulated, the people in the position to influence an election might be corporate executives, union bosses, the media, religious leaders, the heads of powerful advocacy groups, etc.

If you’ll forgive the lapse into libertarian cliche, the fundamental problem here is concentrated benefits and dispersed costs. When Congress enacts a retroactive extension of copyright terms, it adds puts millions of dollars in the pockets of a handful of large companies and wealthy heirs. In contrast, the costs of the extension to any one individual is probably only a few dollars per year. So it’s in Disney’s interest to hire a lobbyist to lobby for the extension. But it’s very difficult to get 300 million consumers—each of whom only has a few dollars at stake—to get excited about the issue. Hence, when you turn power over the state, that power will almost always be used to the benefit of the best-organized special interests at the expense of the general public. Campaign contributions are a symptom of this problem, they are not the problem itself.

I think this difference of perspective on the political process explains my disagreement with Lessig on the other cause he’s been promoting for the last decade: government regulation of the Internet. If “corruption” is a quirk of America’s campaign financing system, then it makes sense to imagine a future in which we put non-corrupt commissioners in charge of the FCC and they administer network neutrality regulations in an un-corrupt manner. But if the logic of concentrated benefits and dispersed costs means that regulatory processes systematically favor special interest groups, as I believe they do, it doesn’t make much sense to talk about ridding the process of corruption. AT&T’s influence over the FCC does not primarily flow from campaign contributions to President Bush. It flows from the simple fact that it’s much easier for AT&T to hire telecom lobbyists to represent its interests than it is to raise the money required to hire lawyers to represent the public before the FCC.

So every time you give the FCC more authority over some aspect of the telecom industry, it tilts the balance of power toward those entrenched incumbents that are most skillful at manipulating the FCC and its regulatory processes. Yes, that’s a form of corruption. But it’s not a form of corruption we can fix by changing campaign finance or lobbying rules. It’s intrinsic to the political process. And it’s foolish to enact new regulations on the assumption that they will be enforced in a less corrupt manner than previous batches of regulation had been.

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