If eBay Ran the Election

How the dismal science applies to your life.
Nov. 1 2000 3:00 AM

If eBay Ran the Election

Who would buy the votes and what would they pay? 

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At Vote-auction.com, you can sell your presidential vote. At least you could sell your vote up until a couple of days ago, when an judge from Cook County, Ill. (ironically, the traditional vote-fraud capital of the world), issued a restraining order. Now you can exchange your vote for a "voluntary donation."

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Here's how Vote-auction.com works: Say you live in Massachusetts. You sign up to join the "Massachusetts voting bloc," which (as of this writing) has 731 members. The entire block is auctioned off eBay-style, and the winning bid—excuse me, the winning voluntary donation—is divided evenly among the bloc's members in exchange for their absentee ballots. The current high bid for the Massachusetts bloc is $4,000, or $6.08 per vote. That's pretty low, presumably because everybody already knows who's going to carry Massachusetts. (The Texas bloc is going for an even lower $4.19 per vote.) If you live in hotly contested Michigan, your vote is now worth $22.73.

Even so, only 1,429 Michigan voters have signed up—almost surely too few to change the outcome. But the Internet is in its infancy and this is only the beginning. By 2004, Internet vote-selling could be as ubiquitous as Internet porn.

Not that there's anything truly new under the sun. In 1769, the great legal scholar William Blackstone opposed universal suffrage because he feared that the poor would sell their votes. To whom? Blackstone thought the answer was obvious: The rich would buy votes from the poor and use their enhanced political power to exploit the middle class.

But that's not obvious at all. Why shouldn't the middle class buy all the votes and use them to exploit the rich? It won't do to respond that the rich have more money. That only makes them a more tempting target. Why can't a middle-class coalition buy votes on credit, win the election, take from the rich and give to themselves, pay off their debts, and have plenty left over?

Another great legal scholar, Judge Richard Posner, has an answer: The middle class is just too big. Large coalitions invite free-riding. As long as each of your neighbors buys 10 votes, why bother buying any yourself? After all, it's astronomically unlikely that your personal contribution can change the election outcome. Everyone reasons that way, nobody contributes to the general enterprise, and the coalition breaks down.

The rich, by contrast, at least in Blackstone's day, were few enough in number that they might have been able to hold a coalition together. Today, in a world where everyone's a dot-com millionaire, that's far less likely to be true.

You could argue that one extremely wealthy individual—let's call him B.G. for Big Guy—might overcome the free-rider problem by forming a coalition of one, buy all the votes, and take over the world. But it's far from clear he'd be successful. More likely, he'd end up in a bidding war against those who fear him the most, and the price of votes would be bid up to the point where B.G. might just as well give up.

In a world where votes are bought and sold, how do you form a coalition that's both big enough to outbid the competition and small enough to exclude free-riders? Probably you can't, so you've got to attack the free-rider problem some other way—say by cultivating charismatic leaders capable of inspiring members to contribute even when it goes against their narrowly defined self-interest.

Those leaders would raise money from coalition members, use it to buy votes, buy additional votes on credit, get themselves elected, extract wealth from their enemies, pay off their debts to voters, and distribute the remaining proceeds to the members of the coalition. If that sounds vaguely familiar, it's probably because you live in a similar world.

When I first heard about Vote-auction.com, I was convinced that explicit vote-selling could change the face of American politics.

On reflection, I'm not sure it will make much difference. In the hypothetical future where votes are traded on the Internet, political parties will win elections by starting with a core coalition of "true believers" inspired by charismatic leadership and then using cash to buy enough votes to win. In the actual present, political parties win elections exactly the same way, except that they buy votes implicitly with promises of government largess instead of explcitly with cash. (e.g., "Vote for me and I'll give you a Head Start program, or a business subsidy, or a tariff protection.") Either way, success depends on holding that core coalition together. It's not at all clear that you'd change the outcome just by making the vote-buying more explicit.

Whatever the process, the simplest theory predicts that the winner will walk away with only a small reward. If the presidency is worth $15 billion and a candidate thinks he can win it by buying $10 billion worth of votes, he's likely to be surprised by an opponent who offers $11 billion. Then the other candidate will offer $12 billion and so on, until the winner pays almost $15 billion for a $15 billion prize. That would be true—according to the simple theory—in a world where votes are sold for cash, and the same theory says it should be true in the world we live in today, where votes are sold for subsidies and spending programs.

There are only two ways around the theory's prediction: 1) An exceptionally charismatic candidate might be able to buy votes at bargain prices; and 2) candidates can collude with their opponents. If Candidate A agrees with Candidate B to limit bids, one of them can win the $15 billion prize for $10 billion and the two can split the remaining $5 billion. The winning candidate might even get good press by labeling his collusive agreement a combination of "campaign-finance reform" and "bipartisanship."

In the hypothetical future where all votes are traded on the Internet, it's easy to see how bipartisan collusion would line the pockets of politicians at the expense of voters by holding down the price of votes. In the actual present, the same thing is true for essentially the same reason. Without collusion, politicians who enrich themselves can be "outbid" by opponents who offer to duplicate their policies while returning a little extra to the voters through tax cuts or spending. The bidding continues until all excess profits are competed away. Only bipartisanship can limit that process.

So, when George W. Bush boasts about his record of working closely with Democrats, he's really boasting about his role in a conspiracy against the public. If Bush weren't working so closely with the opposition, he'd have to compete by offering the voters a better deal. By closing off competition, he makes it possible for both leaders in both parties to preserve resources for themselves and other faithful insiders. That's why so many politicians retire rich.

Steven E. Landsburg is the author, most recently, ofMore Sex Is Safer Sex: The Unconventional Wisdom of Economics. You can e-mail him at armchair@landsburg.com.

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