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Keep Politics Away from Money

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The supporters of campaign-finance regulation, and now a bare majority on the U.S. Supreme Court, are trying to square the circle. They want a vast distributive state in which politicians dispense favors at the expense of others without the appearance of corruption. An inherently corrupt system with no appearance of corruption is about as likely as, well, a square circle.

The Court has upheld by a 54 vote the McCain-Feingold law, which among other things prohibits political parties from raising unregulated soft money and restricts issue advertising on television 60 days before a general election and 30 days before a primary.

This is no minor matter. Five members of the Supreme Court (including the liberals) are willing to accept limits on free speech because in their view it will help avoid the appearance of corrupt access to government favor-peddlers. Since it wont actually do that as even the majority admitted that flimsy excuse to violate natural and First Amendment rights has no legs to stand on.

One wonders whether the advocates of such controls are dealing in good faith. They complain that previous restrictions have not worked; eventually everyone found a way to evade them. So now they try again. Do they seriously think the new rules wont be gotten around? (No, they dont.) What then? More restrictions on Americans freedom?

This is where it is headed. The logic is relentless: Once the governments authority to transfer wealth from one person to another is declared nonnegotiable, liberty becomes highly negotiable.

Lets state plainly what the champions of campaign-finance laws refuse to acknowledge. Government today is mostly a wealth-transfer machine. This takes roughly two forms: taxation and regulation. Through taxation politicians loot productive people and give the proceeds to favored constituencies, rich and poor. For example, when government subsidizes a business or a person, it first has to take the money from someone else without consent. Through regulation government can accomplish much the same goal. A regulation imposing quotas on imported clothing will raise the price of clothing in the American market and benefit domestic producers who otherwise would have lost out to foreigner competitors. The regulation is equivalent to a cash subsidy procured by taxation.

Since government has the muscle to bestow wealth in these ways, it is no surprise that people lobby to become beneficiaries. The prospective rewards are so great that those aiming for them are willing to spend considerable sums in the effort. What better way to get a piece of the action than to contribute money to elect or reelect friendly candidates?

Money isnt spent only to obtain the unearned. Sometimes those threatened with taxation or regulation do it to protect themselves from state encroachment. They too have an interest in finding sympathetic candidates. When government has life-and-death power over business and other areas of life, we should expect to see such defensive activities.

The second group of people is more honorable than the first, although campaign-finance reformers regard both as equally corrupt.

But notice that the surest way to end that corruption is to prohibit government from engaging in favor-peddling in the first place. If government has nothing to sell, no one will try to buy.

Unfortunately, its a rare politician who would deny himself the power to hand out booty. Thats how one wins votes and makes a career of politics.

The Court didnt take its own reasoning seriously enough. If it really wanted to remove the appearance of corrupt access to government, it would have voided the entire distributive state. Theres a simple way to keep money away from politics: keep politics away from money.

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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.