Campaign Finance Reform:
It Won't Work

Jude Wanniski
April 29, 1998


Memo To: Representative J.D.Hayworth [R-AZ]
From: Jude Wanniski
Re: Campaign Finance

Saw you on "Crossfire" and had to write this note of applause. Your position on campaign finance fits exactly with the nation’s problem with current practice. I’ve argued for many years that as long as the tax and regulatory environment puts so much power in the hands of members of Congress and the Executive Branch, the American people have to defend themselves by bidding for representatives in these branches of government who will represent them against Uncle Sam. The enormous amount of money spent on political campaigns is for defense, not offense. Only a small part of the money is aimed at persuading the federal government to give positive handouts to the favored few.

It is up to people like Jack Kemp and Dick Armey and Trent and Newt and Bill Archer to press ahead with legislative ideas that will simplify and clarify the tax and regulatory apparatus of the government. This will take several years to accomplish, barring a small miracle. Meanwhile, you and your colleagues who are engaged in the critical issues involving raw political power have to hold off the so-called finance reformers. The more “reform” we have of the kind John McCain and Chris Shays have in mind, the longer it will take to simplify and downsize government.

What I mean to say is that as long as there are 8 million words in the federal tax code and millions of words added annually to the regulatory register there is absolutely no point in trying to prevent the universe from protecting itself with campaign cash. This is not political science. It is chemistry, physics and integral calculus. If you provide an incentive in the tax code and regulatory register for individuals, corporations and entire industries to get a deal or protect themselves from those who have bought a better deal, you cannot stop the cash from seeking the line of least resistance. There will always be “rent seekers,” as economists call special interest lobbyists, but when the system is simple, simple, simple, the number is reduced to a minimum. We’ll get there, but in the process we can’t discourage every possible form of expression, including the financing of political campaigns. The kind of legislation you are talking about will help us get from here to there. Count me a fan.

P.S. It is a mistake to look at the rest of the world for guidance on campaign financing. We often hear how wonderful it is in England or Canada, where the campaign periods are short and the financing much, much smaller. These are parliamentary systems, where you really vote for one party or the other, as there is near-perfect discipline. Here, every candidate represents a different bundle of opinions on myriad issues. It is much more chaotic, but this is one of the reasons we are the Superpower, and the sun has set on the British Empire.