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No Compromise on Campaign Finance Reform

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President Bush’s tone of bipartisan cooperation has its perils. It could lead him to compromise on the uncompromisable. That danger is looming already on so-called campaign finance reform. Sen. John McCain, Bush’s rival in the primaries, is intent on pushing his bill to interfere further with the right of the American people to give however much money they wish to the candidates of their choice. McCain would ban soft money, the large contributions given to the political parties.

He and other Republicans insist that labor unions abide by the 1988 Beck decision, in which the U.S. Supreme Court ruled that workers cannot be forced to finance a union’s political activities. This is a matter of simple justice. It’s bad enough that a worker is forced to pay dues even when he declines to join a union. To force him to contribute to parties and candidates he abhors compounds the injury. The best remedy is to make union membership fully voluntary. Short of that, Beck should be enforced.

You’d think that after Beck compulsory political contributions would be a thing of the past. But they are not. Using what labor economist Charles Baird calls “creative bookkeeping,” unions have thwarted workers who want the political portion of their dues refunded. The National Labor Relations Board under President Clinton was less than vigilant about enforcing the rights affirmed in Beck. For example, the NLRB said that workers could not demand an objective accounting of a union’s activities.

In the debate over campaign finance reform, the Democrats have found it hard to reject outright the proposition that workers should be free from compulsory political contributions. Instead, they have asked for what Senate Minority Leader Tom Daschle calls a “level playing field” — namely, that corporate stockholders should have the same freedom. After all, Daschle asks, why should a corporation make political contributions against the will of its owners?

No one should be surprised that Daschle would engage in such sophistry. What is disappointing is that the Bush administration appears to be falling for it. Senior White House adviser Karl Rove told an interviewer that “shareholder protection” is an “interesting” idea.

But it is not an interesting idea. It is bad idea based on a fallacy. Whether or not the Bush people really think it has merit, there is a danger they will go for it in the spirit of compromise. But such a compromise would interfere with the free market and set a terrible precedent.

There is no comparison between a worker forced to pay dues to a union and a stockholder. If a worker doesn’t like a union, he can quit — but he cannot stop paying tribute. His dues are simply redefined as fees. But if a stockholder doesn’t like what his corporation is doing, he is free to sell his stock and have nothing to do with the company. If a company persists in acting contrary to the interests of its owners, it will find itself the target of a takeover — unless government regulations thwart that free-market process.

A true level playing field would require the repeal of the “exclusive representation” provision of the National Labor Relation Act. That provision recognizes a union chosen by a majority of workers as the exclusive representative of all workers — even those who voted against it. Workers who wish not to join must still pay. This is justified by the claim that nonmembers receive services. But as Baird points out, if exclusive representation were repealed, that justification would collapse.

There is no equivalent to exclusive representation for stockholders. The moment a stockholder gets wind that a company in which he holds shares is using corporate money in a manner he disapproves of, he is free to dump the stock. Workers have no similar power.

The Bush administration should resist making this compromise. Even better, it should reject campaign finance reform altogether. It is nothing but a limit on free political expression and therefore contrary to the liberty we pride ourselves on. The best way to eliminate the undue influence of money in politics is to shrink government back to its original constitutional dimensions. If government has no special favors to sell, special interests will have nothing to buy.

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.