"Everything people thought was wrong then is wrong now in spades"

Sure, rich people have always controlled our politics -- but never quite like this, a leading expert explains

Published August 22, 2014 12:30PM (EDT)

 Donald Trump, Mitt Romney, Lloyd Blankfein                                          (<a href='http://www.shutterstock.com/gallery-64736p1.html'>lev radin</a> via <a href='http://www.shutterstock.com/'>Shutterstock</a>/Reuters/Steve Marcus/Jim Young/Salon)
Donald Trump, Mitt Romney, Lloyd Blankfein (lev radin via Shutterstock/Reuters/Steve Marcus/Jim Young/Salon)

Harvard professor and political activist Lawrence Lessig has been indefatigable in his promotion of Mayday PAC, the PAC he formed with GOP adviser Mark McKinnon to support candidates who believe in reforming U.S. campaign finance law. The PAC's had success raising money, and just recently announced three more of the eight candidates it plans to endorse. There's reason, in other words, to be optimistic that Mayday will be able to confront what Lessig once called "the fundamental problem with American politics."

At the risk of being a downer, though, we have to ask: What if Lessig's wrong? What if campaign finance reform isn't the silver bullet it's been made out to be? What if the problem is, impossible as it sounds, even bigger than we thought?

Figuring the best way to plan for the future is to study the past, Salon reached out to campaign finance expert and historian Robert Mutch, author of the new book "Buying the Vote: A History of Campaign Finance Reform," in order to learn how earlier, successful campaign finance reform movements were able to restrict the flow of money into politics and what today's reformers can learn from their example. Our conversation is below and has been edited for clarity and length.

Just to establish where we are — before we get to how we got here and whether we can end up somewhere better — how bad is the state of campaign finance regulation in America today?

Bad. I’d say it's worse than it was ... after 1904, when the first [campaign finance] laws were passed in the first decade of the 20th century. They were passed in response to the revelations that corporations had been making campaign contributions, and this was just accepted in the Gilded Age, and so there was immediately a call for not only a ban on corporate contributions but also full disclosure for whoever was getting money, because immediately after that first revelation, there was another revelation about one of the big railroad moguls who was one of Theodore Roosevelt's biggest campaign contributors, and this guy was hated almost as much as John D. Rockefeller. So you had corporations making contributions and the rich guys, who ran corporations, making big contributions on their own. And the idea was that you wanted to reduce the political inequality, and that was behind the first reforms. And everything that people thought was wrong then is wrong now in spades.

That first wave of reform, how effective was it?

The conventional wisdom is that it wasn't [effective] but I took a very close look at this stuff in my current book, and I had to conclude that it was more effective than I thought it was before I started writing. I looked at the financial disclosure reports that were submitted for the presidential campaigns from 1912 through the 1960s on up through the early 1970s and I looked back at the case that started it all, which was insurance companies making campaign contributions. They made the campaign contributions by disguising them as contributions from the personal checking accounts of their executives, so I wanted to know how effective was this 1907 law against corporate contributions ... I looked at the contributions of the top executives of the 50 largest corporations and the 15 or 20 biggest banks, and what I saw was that they kept on giving, and making contributions, but the size of the contributions they were making was much smaller than it had been before. Even if every one of them was simply an illegal corporate contribution, corporate contributions were less than they had been before ... So the ban against corporate contributions seems to have worked. ...

Congress then passed the first disclosure law in 1910. It worked in the sense that this was very much a bipartisan concern back then. In fact, if it was not bipartisan, it was mostly Republicans, because the Democrats really didn't amount to much in those days. (The Republicans were far and away the dominant party, and to the extent that there was much of a debate over this issue, it was a debate that went on within the Republican Party.) So then I looked at these again, looking at all the disclosure reports over the years and one of the things I found was that the donations that the rich guys were making almost immediately ... dropped by about a third from what they had been in 1904. And then they dropped by about half in the 1930s. It continued to drop even into the 1950s. And it only went back up again in the 1970s, and in 1972, in the campaign that created Watergate, for the first time, contributions were again at the same size they had been back in 1904.

So it worked, and it worked for a long time — it worked for almost 60 years — but it began to fall apart in the 1970s.

And why do you think that is?

Why is a very complicated question that I am not sure anybody is capable of answering. All I can do is I can say what happened; and what happened in the 1970s was that, for the first time, opponents of reform raised an explicitly ideological argument against it.

Now, no one had raised any arguments against reform back at the beginning of the 20th century. There probably were people who wish they could’ve gone ahead writing the biggest checks they could and dipping into corporate treasuries, but they didn't ever come out and say that this is what they should be able to do. As a matter of fact, they stopped doing it. Only in the 1970s, you get people saying that reform is wrong in principle, and they couched it in terms of constitutional law, but what they were really doing was coming up with a more inegalitarian definition of democracy. ...

What reformers were saying is that we needed to reduce the degree of political inequality, and the way to do that was to put limits on the amount of money that can be given and spent in election campaigns. Well, what the conservatives start saying in the 1970s — this is where they came up with the money-is-speech-argument — they’re saying, "Oh, no, no, you can't do that, because if you limit money, you're limiting speech, and you can't limit speech, because that's against the First Amendment."

So what they were really saying was: Reducing inequality is in itself an unconstitutional goal, and this was always the goal of reform, and no one had questioned that goal until the 1970s. And in the 1970s, the conservatives said, and the Supreme Court in Buckley agreed, that promoting equality this way was unconstitutional.

Have you seen in your research any indication as to which strategies or tactics are more effective than others?

I’ve been researching and writing about this subject for about 30 years now, and I have to say, there are aspects to it that I only realized when I started getting into the details of these disclosure reports for this book ... One of the things that people hoped would happen with that disclosure law was that, once people knew that their contributions were going to be made public, that they would make smaller contributions. That happened, too. But the only way that happened was that the people who were going to make these contributions or get them — the economic and political elites of the time — voluntarily imposed this on themselves. If they hadn't done that, the reform movement wouldn't have worked. ...

What about the project being spearheaded by Lawrence Lessig, which relies in part on matching donations from wealthy Silicon Valley types? Is that an example of working with the "enlightened" members of the elite that could lead to reform?

They’re reaching out to a very specific slice of the economic elite, which doesn't give me much hope. If you're reaching out only to one slice of the economic elite, then you have to think, "Why does only this one slice think this is in their interest and nobody else in the elite thinks so?" Might there be a public policy agenda here? Might there be something going on here? And I don't know that there is, I just know that if you can only go to one slice of the elite, then what you're doing is admitting that what we today call the 1 percent isn't interested in behaving in terms of enlightened self-interest.

Money alone isn't the issue. I mean, the issue is really how the society works and how its politics is organized. In one sense, there are limits to what reform can do. There are limits to what reform was able to do back before the 1970s. Reform came up in opposition to the Gilded Age system, in which presidential campaigns were financed by simply going down to Wall Street and talking to a very small number of people who would write very big checks. [Reformers] wanted to change that system, and they did. But they didn't transform it. What they got was a modified version of the Gilded Age system. It was modified in the sense that the same big donors were making hugely disproportionate contributions — they just weren’t the only ones anymore, and they weren't making contributions as large as they had been before ... [I]f you can't get the whole 1 percent to contribute to your PAC, then I’m not sure your PAC is going to work. Your PAC might have a few successes, but you've got to have a 1 percent that sees itself as a part of the society, and I’m not sure that the current 1 percent does that.

It sounds like it's a bit of a chicken/egg problem, determining whether reform changes society or society changes and allows reform — and that actually goes against one of the major beliefs of the campaign finance reform movement today, which is that what's wrong with our politics and economy can be fixed through financial reform. Is it wrong for people to assume that if we reform campaign finance, the effect will kind of permeate throughout society and fix our politics, too?

I’d say that I think we would definitely have a better politics if we had a better campaign finance law; but we're not going to get a better campaign finance law until we get a better politics. So it is a kind of a chicken and egg thing.

Just imagine if people were trying to push constitutional amendments and new laws — like laws trying to increase the number of small donations and so on — these laws would have no chance of getting through Congress. But imagine you could wave a magic wand or click your heels together three times and make those reforms into law. Would they work? They wouldn't, because they would be legal solutions to a political problem. ...

If we want our democracy to work, we have to see that inequality doesn't get out of hand, and corporations aren’t citizens. But if you’ve got really active opposition to those goals, as we do today, then the regulations aren’t going to work. Whether the law works is a function of how the society works, and the society right now ...  we don't seem to have much sense of not just a common purpose but even a sense of all belonging to the same society. Everything is too fragmented right now.

By Elias Isquith

Elias Isquith is a former Salon staff writer.

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