The Public Policy

...But these would equally be frustrated by a decision by the public not to buy at the controlled prices . . . . So, int~i - mately intertwined with the need to control The Alternative June-September 1974 13...

...A substantial majority in the House, one suspects, will find it wise, on this one, to line up on the side of the angels...

...Indeed, in his view "most, and probably all, of the serious problems facing this country today have their roots in the way we finance political campaigns...

...specifically, it will be tempted to compensate for its own growing powerlessness, brought on by circumstances and its own inability to assert its will, by an increased willingness to take pot shots at the holders of the real power...

...As of this writing, the Senate has already choked off opposition debate by invoking cloture, and is now concerned mainly with deciding how big a subsidy the taxpayers should be required to furnish the candidates for the presidency...

...It is unfortunate, however, that Congress seems bent on public campaign financing as this session's solution to political corruption...

...In one sense, of course, this effort represents merely the latest of a seemingly endless series of repercussions from l'affaire Watergate--an event which, according to network historians and other dealers in instant perspective, has already passed Credit Mobilier and Teapot Dome on the domestic scandal charts, and will soon inch ahead of Profumo-Keeler and the Dreyfus Case on the international listings...

...And like most such proposals, this one will not only fail to yield the wonderful results its sponsors so confidently predict, but will have a fair number of pernicious side effects as well...

...To believe that private money doesn't cause some political corruption is naive...

...If it believes that criminality is an important component of impeachability, then it will want to examine the "intrinsic quality" of the behavior in question, even if it does not feel bound to a strict standard of indictability...

...Until now, it was generally understood that these disputes were to be settled ultimately by the Supreme Court, the electorate, and/or the amending process...

...For example, Alexander Heard, in The Costs of Democracy, points out that literally millions, and not just a wealthy few, pour money into campaign coffers--and more importantly, that among the wealthy there is no uniform "fat cat" interest group gouging the public...

...First, even assuming that making, say, Walter Annenberg ambassador to the Court of St...

...Very little effort, however, has been devoted to a search for the new industrial state...

...The average citizen can, at present, give money to a Candidate...

...Ultimately, it is probably true that, as then-Representative Gerald Ford put it, an impeachable offense is whatever the House says it is...

...But Cralbraith's views are not completely immune to study, and this is a report of an attempt to verify empirically two important characteristics of the new industrial state.* There does exist in Galbraith's work one concisely stated hypothesis...

...It need only reject his appointment...

...Anyone attempting to validate Galbraith's discovery is forced in the main to deal with vague propositions such as the claim that the techn~tructure seeks nothing less than the "panoply of organization interests---security and autonomy of organization, growth . . . . . technical achievement, public prestige, as well as profits" (J.K...

...Once the safety of the technostructure is insured by a minimum level of earnings, there is then a treasure of choice as to goals...

...Nothing is so compelling as the need to survive...

...the powerful will be able to buy what they want, while the less wealthy will be gulled into electing those who have the most money with which to purchase their votes...

...And he is told, ultimately, that dernocracy will simply not work if left to the citizens...

...The absence of any serious attempt to document the existence of the new industrial state partly is attributable to Galbraith' s lively prose which seldom tol(rates a cleanly stated testable hypothesis...

...Moreover, the abuses [that do exist] may (in fact, do) yield to remedies considerably narrower than the proposals now being made...

...And Watergate, so highly touted as the major reason for reform, is ironically enough the scandal least related to private financing of campaigns...

...He cangot he trusted to discern when a party or candidate has become the creature of special interests, and hence the nation cannot rely on his ability to vote the corrupt out of office...

...but other powerful elements of the society, whose influence does not depend on direct contributious to candidates, will step into the vacuum...

...And the image of "fat cats" bidding for political favors at the expense of the ~'public interest" is hardly a popular one, even in less hysterical times...

...While conceding that money has an impact, their research led them to conclude that 'tin matters of great moment, when the varied interests in our society are in contention, it is doubtful whether control over money goes very far with a President...

...A J. K. GALBm~JTH'S views have been examined in various aspects, particularly in regard to the consistency and epistemology of his views and the soundness of the social prescriptions that he offers...

...Several responses are in order...

...or the supposed milk-pricing scandal...

...Control of prices is for a purpose--for the security of the technostructure and to allow it to plan...

...James involves a serious distortion of whatever the public interest is supposed to be in such matters, the Senate can change such results without imposing 12 The Alternative June-September 1974 public campaign financing...

...The problem that instability creates for the fulfillment of plans is discussed .several times in The New Industrial State...

...Finally, consider the position of the individual citizen...

...In the current atmosphere, however, one fears that the latter viewpoint will determine public policy...

...In fairness, it is hardly surprising that this legislation is being pushed in the wake of what even Republican apologists concede to be a serious election scandal...

...Rather than take up the difficult task of reasserting its proper role in the constitutional system, will Congress indemnify itself for the emergence of-an "imperial presidency" by dreaming of the Long Parliament, which, as the staff notes in wonderment and admiration, "alone impeached 98 persons...

...But, one may ask, what about heavy contributors becoming ambassadors...

...Winter backs this view with the research conclusions of some highly prominent political scientists...

...The potential efficacy of public financing is suspect for two reasons...

...The answers, I submit, are first, "not really," and second, "a great deal...

...Security, growth and effective planning would be jeopardized by erratic or unpredictable price behavior...

...The proponents of this idea are already well on the way towards achieving their objective...

...it will also seriously erode both the system's potential to respond to the electorate and the personal political freedom of the individual...

...and in that case, if additional protection be warranted, the more logical way to curtail the impetus for corruption would be to end governmental authority~ to dispense such important favors in the private sector of the economy...

...While Ford was referring specifically to judges, whose tenure "during good behavior" might require impeachment as a more important safeguard than does the limited term of an elected official, it would seem that procedurally, at least, his dictum applies to other impeachments as well...

...Indeed, the President himself has on occasion made appropriate noises about the evils of campaign financing (perhaps figuring that any explanation of Watergate which places responsibility beyond the confines of the Oval Office can't do him any harm...

...But to believe that this corruption is so pervasive that it is responsible for most, if not all, of the nation's serious problerr~s, or that setting up the government in the campaign.funding business ~vill solve such problems, is another and more dangerous form of na'iveth...

...In this regard, it, is interesting to note that unions and the media, particularly the latter, are among the biggest advocates of public financing...

...But in a government with a complicated constitutional structure, there are bound to be disagreements among the branches of government concerning their respective powers...

...On Subsidizing Hot Air THIS SPRING, as Richard Nixon continues his struggle to stay in the White House, Congress is busily engaged in producing a bill designed to radically alter the process which elevated that worthy to the nation's highest office...

...I leave it to your own political judgment to determine the number of viable options available to Richard Nixon when a bill entitled The Campaign Reform Act, or some such thing, is presented to him for signature...

...Like most salvationist measures, this one is being advanced with cries of '~urgency" that g r e a t l y overestimate the problem it purports to "solve," but with little serious reflection on its probable impact in practice...

...Once a candidate knows that his campaign will receive a set amount of funds from the government, an important l~u'ometer of his appeal to the voters is immediately removed...

...A two-way split up of the public fund would of course destroy all but Republicans and Democrats...

...In Puerto Rico, where public financing was tried, evidence indicated that political parties, after exhausting the allotted subsidy, resorted to extorting money from governnmnt employees and other happy activities in an effort to get the edge on the opposition...

...One might well argue, however, that even if the problem is overstated, would not public financing end wh~itever corruption does result from giving the wealthy an opportunity to buy influence...

...Neither he nor his party has the same incentive, or the same opportunity, to learn, prior to election day, which issues are most important to the electorate...

...A second hypothesis about the behavior of technostructure-oriented firms is the desire of variousechelons of management to prevent the disruption of the firm's plans...

...Rather, he says, "Big givers show up importantly in both parties and on behalf of many opposing candidates"--as anyone who is familiar with the activities of Stewart Mott, Howard Stein, or Martin Peretz can attest...

...In the first place, it is hardly true, as so many seem to assume, that private contributions to political campaigns have resulted in wholesale prostitution of the democratic process...

...But price control does little to advance these goals unless there is also control over the amounts that are bought and sold at these prices...

...Edward Kennedy, who (rather ironically) is in the forefront of this particular battle, attaches even more cosmic significance to the results of the crusade...

...He is told either that he can no longer contribute to the candidate or party of his choice, or that his right to do so must he limited...

...The pack is on the prowl for public campaign financing, and in such situations, its wishes are seldom denied...

...And Spiro Agnew, in his farewell to the nation, laid part of the blame for his troubles on the cruel necessities of political fund raising...

...he can hardly hope, however, to own a netwoi'k or run a labor uniom .The second argument against the potential effectiveness of public financing is that, surprisingly enough, it may actually encourage corruption...

...This hypothesis states that technostructureoriented firms sacrifice profits in order to accelerate growth of sales...

...Under the doctrine proposed by the staff, it would seem that Congress could determine, on the basis of its own interpretation of the boundary between legislative and judicial functions, that the President had failed to comply with the constitutional limitations of his office, and impeach him...

...This hypothesis is mere purely GalbraithJan and also considerably less concise...

...And besides, what harm would be done...

...He is told that the reason his freedom must be thus curtailed is that he 5s a gullible sort...

...However, there is little doubt as to how, overwhelmingly, this choice is exercised: It is to achieve the greatest pos,~ible rate of cor*The complete study on which this summary report is based can be found in Economic Inquiry, March, 1974...

...Does this fabled and well-advertised land actually exist...

...In other words, Walter Annenberg may no longer he able to buy his ambassadorship...

...or (shudder) Watergate itself...

...This "sales maximization" hypothesis is accepted quite explicitly by Galbraith...

...Nevertheless, it matters greatly in what spirit the House goes about its task of defining what constitutes an impeachable offense...

...Galbraith, "Economics as a System of Belief," Amer/can Economic Review [Vol: 60, No...

...But the problem is not merely that public financing will fail to achieve its stated objectives...

...A percentage division based on past electoral performance would not only freeze out new political movements, but would tend to preserve a particulm' division of influence among existing parties...

...An equal division among all who wisked to run for office would be completely unworkable...

...Professor Ralph K. Winter, Jr., of Yale Law School, who made a study of campaign financing for (of all people) the Senate Select Committee on Presidential Campaign Activities, argues convincingly that this perception of American politics is largely a misconception...

...Perhaps this exception to Cralbraith's style is due to the origin of the hypothesis, which, as Gal, braith acknowledges, is attributable to others, such as William J. Baumol...

...Since Congress is seldom shy to deal with such problems, it is quite likely that by the time you read this article, public campaign financing will be the law of the land...

...And the idea that Watergate occurred because some wealthy contributor insisted on a burglary as t h e price for his check to the campaign is, while highly colorful, patently absurd...

...Moreover, public financing threatens the continued vitality of third parties and other minority political organizations...

...Galbraith, The New Industrial Industrial State [Boston: Houghton Mi~in Company, 1967], p. 171...

...As for Fir, even assuming that the settlement was a sell-out (Archibald Cox, among others, happens, to think the government got a pretty gobd deal), whatever corporate contributions I T r made were a/ready illegal, The same is true of corporate contributions from major milk producers...

...Conversely, he can no longer refrain from-contributing, for he is told that his earnings will he used to sponsor the campaigns of those with whom he may violently disagree...

...or the ITF antitrust settlement...

...The John Chancellors and Walter Cronkites have set the mood, speaking in sonorous tones of how Watergate indicates the "corrosive influence of private money on public elections...

...Public financing, in short, would eliminate a major source of citizen feedback, limit the number of options presented to the voters, and lead to general stagnation among the options that remained...

...Otherwise, it will feel free to consider impeachable any behavior which it regards as infringing on its, or anyone else's, constitutional rights or privileges...

...Horror stories," as he puts it, '~are effective because they horrify, not because they illuminate...

...First, as Winter suggests, "restrictions on private campaign financing will not increase the political power of the people generally but will further concentrate it in already powerful segments of the community...

...porate growth as measured in sales" (J.K...

...The so-called excess cash explanation is faulty in that all the testimony to date indicates that the operation was p l a ~ before most of the money began rolling in...

...Nevertheless, this particular spinoff from the 1972 campaign break-in may well prove the most significant in terms of its lasting impact on the American political system...

...Similarly, Nelson Polsby and Aaron Wildavsky reject, in Presidential Elections, the idea that those who do contribute, to whichever side, thereby gain significant undue influence...

...For Congress, spurred on by the media and by the always seductive and currently irresistible cry of "reform," is about to put the government in the business of financing federal election campaigns...

...2, May, 1970], p. 473...