The Political Marketplace

11/02/2010 09:25 am ET | Updated May 25, 2011
  • Jay Mandle Professor of Economics, Colgate University

A tidal wave of new political spending is upon us in the wake of the Supreme Court's Citizens United decision, empowering corporations and unions to use their treasuries to pay for political expenditures. According to the Campaign Finance Institute, non-party independent campaign spending on congressional elections stood at $147.5 million through October. This figure is 73% higher than it was at a comparable point in the electoral cycle in 2008. The absence of disclosure requirements means that it is not entirely clear who is doing this spending. But the fact that this enormous increase comes so closely after the Court's decision strongly suggests that corporate contributions played a substantial role in the surge.

The Court's decision flowed from the premise that free speech "is an essential mechanism of democracy" and that the government "may not... deprive the public of the right and privilege to determine for itself what speech and speakers are worthy of consideration." Since, as the Court puts it, "corporations and other associations, like individuals, contribute to the discussion, [and] debate... that the First Amendment seeks to foster, " they, like people, should be accorded full free speech protection."

In short, there should be no restrictions on the supply side of the political market.

This argument might be sound if something comparable to a perfectly competitive market in ideas prevailed. A very large number of voices, each speaking at approximately the same volume, might well be an efficient mechanism by which citizens could become informed.

But the supply side of political debate does not look that way. Not everyone has an equal opportunity to attempt to persuade. The market for ideas reflects the distribution of wealth because the promotion of political ideas is costly. Since in the United States income distribution is highly skewed, relatively few individuals can afford to disseminate their ideas widely. This inequality is compounded when the supply side of the market is composed not only of individuals but also of wealthy corporations.

As a result, political ideas that do not attract wealthy advocates are effectively marginalized -- not because they are banned, but because they are not heard. With the escalation in the costs of political campaigns that has occurred in recent years, that form of censorship is on the increase. But the Court is blind to the fact that ideas are purged from the political agenda in ways other than government censorship.

It is ironic that the Court defends corporate First Amendment rights on grounds that more properly should be applied to low income individuals. Its argument is that it seeks to prevent the Government from depriving a "disadvantaged person or class of the right to use speech...." Obviously, this is exactly what happens to anyone except those able to afford high level political contributions, though this form of deprivation the Court fails to recognize.

But it is not only the Supreme Court that has ignored the negative consequences of the market's not being fully competitive. Democratic theorists too have had almost nothing to say on the subject. How a democracy of equality could be paid for is a neglected field.

A starting point to correct this neglect would be to provide optional public funding for candidates. But in addition to that, public policy should be designed to give individuals the opportunity to express themselves fully and effectively. To that end, the right of association should be unfettered. But it should also be the responsibility of the government to organize forums in which the articulation of wide-ranging viewpoints can occur. Individuals or groups should be accorded the right to try to persuade others without the necessity of mobilizing private wealth.

The goal is to provide an environment in which all views can be aired in such a way that they receive a fair hearing. Doing so will take a public funding. With that aim achieved, there would be no reason to restrict or ban the private funding of political ideas.

No one needs to be told that the United States is confronted with multiple problems. We still have not figured out how to relate to a global economy in which our dominance is inevitably going to be reduced; we have made very little progress in addressing the ever-more pressing problem of global climate change; and the increasing ethnic and cultural diversity of the country is creating tensions that cry out for innovative approaches.

In short, we need all the ideas we can get. But the way our political system is funded works in the opposite direction and the Citizens United decision has reinforced the resulting dysfunction. To reverse that trend we will have to move beyond the First Amendment's prohibitions and identify a positive role for the government to extend political debate beyond what private money can buy.