Campaigning for Competition

by Don Boudreaux on October 6, 2013

in Competition, Crony Capitalism, Politics

Here’s a letter to the Washington Post:

George Will recognizes that limits on campaign contributions thwart competition for incumbent politicians’ seats (“Supreme Court can rescue another freedom in a campaign cash case,” October 6).

If executives for profitable and established companies such as Apple and Wal-Mart persuaded Congress to cap the amounts that banks, venture capitalists, rich uncles, and other financiers may invest in private firms, including upstarts, this restriction would be widely seen as an anti-competitive and unjust scheme to stymie economic competition.  New rivals would be disproportionately bridled in acquiring the means – money – to buy the inputs necessary for competing successfully against incumbent firms.

Yet when identical schemes are launched by sitting politicians to limit campaign contributions, many people – especially from the “Progressive” left – turn blind eyes to the anti-competitive nature and consequences of these financing restrictions.  Do “Progressives” truly believe that corruption is reduced and the public well-served by protecting sitting politicians from the competition that comes from obscure rivals who have no access to the free publicity that attends incumbency?  Are “Progressives” really so naive?

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

In what profession other than politics are attempts by the professions’ incumbents to protect themselves from competition viewed by so many people outside of that profession as evidence of those incumbents’ nobility and public-spiritedness?  Perhaps I shouldn’t be surprised: modern politics rewards with power those candidates who are especially skilled at the dark arts of duplicity and self-serving fakery.

I know, I know: campaign-financing limits are said to be necessary to reduce government corruption.  But such restrictions, in fact, are neither sufficient nor necessary to reduce government corruption.

Apart from the dubiousness of guarding against corruption by reducing the intensity of competition faced by incumbent politicians, if the concern that “Progressives” (and the likes of incumbent Sen. John McCain) profess with reducing corruption and its unquestionably evil consequences were as genuine as they never tire of publicly professing that concern to be, then these people would be far more focused on reducing the size, scope, and discretionary power of government.  It is, far above all, the size, scope, and discretionary power of government that breeds cronyism and corruption.  Until we hear entreaties from proponents of campaign-finance limitations to significantly reduce the size, scope, and discretionary power of government, we can be forgiven for doubting the sincerity of their professed wish to reduce, with campaign-finance restrictions, the prospects of government corruption.

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