The Fat Cat Super PACs Lost, But Citizens United Is Still Bad

Eric Posner weighs in.
Nov. 9 2012 11:55 AM

Citizens United Is Still Worth Hating

Even though the fat-cat super PACs lost at the polls.

Las Vegas casino boss Sheldon Adelson.
Billionaire Las Vegas casino boss and super PAC donor Sheldon Adelson in Macau on Sept. 20

Photo by Philippe Lopez/AFP/Getty Images.

Among the election’s many losers were rich people who spent millions of dollars on donations to super PACs that supported losing Republican candidates. David Weigel says that the rich people wasted their money. Kevin Drum concludes that Citizens United, the much-maligned 2010 Supreme Court case that struck down limits on corporate campaign spending, didn’t kill democracy after all. The truth is more complicated. Real harm likely occurred; it is just invisible. The underlying problem is that the court, under the guise of protecting free speech, interfered with efforts to regulate the political system, a serious harm in itself.

The story begins with the 1976 case Buckley v. Valeo. While upholding limits on campaign contributions and certain reporting and financing rules, the court in Buckley held that dollar limitations on expenditures by candidates and independent groups violated the First Amendment’s protection of free speech. Campaign donations and expenditures, the court said, were a form of expression—in essence, money equals speech. And while the government’s legitimate interest in preventing corruption could justify limits on the donations (because of the potential quid pro quo), the same was not true for expenditures, as long as they were made “independently” from the candidate. It was this case, not Citizens United, that ensured that rich people could baste their favored candidates with unlimited cash, albeit through “independent” expenditures, like television ads produced without direct coordination with the candidate.

In Citizens United, the court took an additional step and struck down a law that prohibited corporations from financing advertisements that supported a candidate shortly before an election. The court said the law, part of the McCain-Feingold campaign finance reform, violated the free speech rights of corporations. A lower court (the D.C. Circuit) then extended this ruling to the organizations we call super PACs, which accept donations, bundle them, and spend them independently of campaigns.  

Citizens United became a lightning rod, with liberals arguing that the majority opinion, written by the five conservative justices, would magnify the influence of the wealthy on electoral outcomes. Conservatives retorted that the decision properly struck down a law that infringed on people’s right to speak using the organizational advantages of the corporate form.

The super PACs spent much of the total $1 billion in outside expenditures raised in the 2012 campaign—a vast increase relative to 2008. And yet Democrats prevailed in many major races, retaining the presidency and a majority in the Senate. Does that mean that Citizens United doesn’t actually matter?

No. Some Democrats did lose, and super PAC money may have made a difference. More insidiously, if Republicans have wealthier backers than Democrats (as they do), and spending for candidates improves their chances of winning (as it does), then the influx of money will shift Democrats to the right, so they can reduce the incentive of wealthy donors to give to Republicans or get some of the money for themselves. If you think President Obama went easy on the banks in the last couple of years, you might point to Citizens United as the explanation.

But the case for the campaign finance reform struck down in Buckley and Citizens United is not as strong as it first appears. Elections have many virtues, but voting systems lack a method for registering the intensity of a voter’s preferences. The vote of a person who slightly prefers Romney to Obama counts just as much as the vote of a person who greatly prefers Obama to Romney, even though we may think that a candidate should be chosen who does the most aggregate good for all voters. If an Obama presidency would greatly benefit 49 percent of the population, while producing a negligible harm for 51 percent, while a Romney presidency would provide a tiny benefit for 51 percent of the population, while greatly harming 49 percent, a case can be made that Obama would be the better president. But unless the 49 percent can use money or campaign work to persuade some marginal voters, they will lose.

When people register the intensity of their preferences by volunteering or donating money, maybe, as some conservatives claim, they overcome other forms of bias built into our system—such as the advantages of incumbency, the power of connected elites, or liberal bias in the media.

To be sure, fat cats have more money than the rest of us and thus can exert greater influence on elections than ordinary people can. The question is whether this negative outweighs the positive, and it is simply not clear. Indeed, a major problem with elections is that people have weak incentives to contribute money, or even to vote, because they know that their vote or contribution will have little effect on the outcome. Thus, donations or expenditures should be encouraged, not discouraged. The law recognizes as much. And yet its ambiguous command has been “donate, but not too much.” Maybe that has created an impression of arbitrariness, and that’s what judges (and not just conservative judges) have worried about.

The same sort of arbitrariness, however, can be found in those judges’ rulings, and none more so than in Justice Anthony Kennedy’s opinion in Citizens United, which relies heavily on Buckley’s distinction between contributions and expenditures. The court permitted limits on contributions because it believed that pouring money into a campaign may lead to corruption or the appearance of it, whereas “independent” expenditures cannot. But this independence has proved to be a mirage. As long as candidates know about expenditures made on their behalf, they can reward contributors with political favors. On what basis could the court think otherwise?

The answer is none. And that is the problem with Citizens United and the whole line of cases on campaign finance law. Over the last few decades a link has been made between free speech and political markets, and the idea is that an unregulated political market, like an unregulated economic market, leads to the best outcomes. But while economists have shown that (in theory) an unregulated economic market maximizes social well-being under certain (ideal) conditions, no similar theory for political markets has any support.

Our electoral system is shot through with regulation—regarding how districts are drawn, candidates are selected, ballots are designed, and elections are conducted. Votes, unlike property rights, cannot be bought and sold. All of these rules reflect trade-offs that reduce the political influence of some people and magnify the political influence of others based on a rough idea of what is fair or good for the country. Whether additional regulations are needed to restrict spending is a hard question. In most democracies, the government would experiment with different systems, and then the public could make a judgment as to which works best.

The court has halted such experiments, maybe because it does not trust incumbents to choose fair rules. But the justices can properly take such a stance only if they themselves can distinguish unfair rules from rules that sensibly respond to defects. They can’t. And in the course of blundering along anyway, the court has disenfranchised voters who seek candidates to reform the system. The real harm in Citizens United is its suggestion that when we spot problems in our electoral system, we are helpless to fix them.

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