There has been much coverage of last week’s Supreme Court decision on campaign finance (McCutcheon v. Federal Election Commission), most of it negative (insert shocked surprise here) given that it will provide more opportunities for the wealthy to shape public policy. As Senator Tammy Baldwin (D-WI) observes:
“It is far too often the case in Washington that powerful corporate interests, the wealthy, and the well-connected get to write the rules and now the Supreme Court has given them more power to rule the ballot box by creating an uneven playing field where big money matters more than the voice of ordinary citizens.”
Perhaps one should not be too quick to fault the “powerful corporate interests, the wealthy, and the well-connected.” They are only being rational. They clearly understand that there are largely two ways to thrive economically: (1) produce more of the things that people value or (2) seek a variety of policy-related privileges that allow you to lay claim to what others have produced and/or create impediments to what your competitors might produce. Over time, the second of these paths—rent-seeking or transfer-seeking has grown in importance in shaping economic outcomes. It is effective, often invisible, and the costs are borne by taxpayers and consumers. As long the elected officials of both parties are in the business of selling privileges, there will be buyers. The rent seeking society will thrive, even as it throttles growth and economic dynamism and contributes to our long-term fiscal problems.
One should not be surprised that the critique of the McCutcheon decision has begun to merge with the attack on the Koch brothers. This morning, a Google search for “McCutcheon and Koch” generates 364,000 hits (I am assuming this number will grow rapidly). Apparently, some believe the best way to frame the decision is to connect it to the Koch brothers, creating a compelling tale of a new plutocracy.
In some ways, this is quite ironic. In his April 2 WSJ piece, Charles Koch writes:
“Far from trying to rig the system, I have spent decades opposing cronyism and all political favors, including mandates, subsidies and protective tariffs—even when we benefit from them. I believe that cronyism is nothing more than welfare for the rich and powerful, and should be abolished.”
There are a number of empirical claims in the piece regarding the Koch companies. If false, I am certain the media will be quick to expose them (after all the “plutocracy is bad” meme is getting a bit old). But perhaps this is not about plutocracy after all? Imagine, if you will, that Koch’s vision became reality. One major implication: the McCutcheon decision would not matter all that much. The wealthy would have far fewer incentives to invest in politics if these investments no longer generated the privileges that are at the core of the rent-seeking society. All of those rent seekers would have to step into the market and many members of the House, Senate, and Executive branch would lose job security and the promise of a bright post-government career.