Mises Wire

Get Rid of Campaign Finance Laws — Decentralize to Make Campaigns Cheaper

Candidates in this year’s elections are raising record amounts of money for their campaigns. Democrats are out-raising Republicans, but on both sides, the numbers are huge. According to Reuters:

Senate candidates — who have six years to raise funds due to their longer terms — have raised more than $950 million, surpassing the $844 million raised during the same period ahead of the 2010 election.

While it’s certainly true that campaign funding is not always the deciding factor of who wins an election, the fact remains access to large amounts of cash helps quite a bit.

When such large sums of money are involved, though, this greatly limits who can plausibly run a serious campaign, and also how many interest groups must be promised many favors in order to raise the necessary sums.

In other words, to run a campaign, a candidate must curry favor with specific groups and wealthy individuals who can write big checks. The exception, of course, is candidates who are already very wealthy themselves and can self-finance their campaigns.

But, with such enormous amounts of money being necessary to run a campaign, how could an ordinary person ever hope to compete without having to first sell out to numerous powerful groups and individuals?

Lawmakers have attempted to address these issues in a number of ways, including limitations on various types of donations, and the use of taxpayer funds for campaigns. Both are objectionable since the former limits the freedom of individuals to give their money to whom they wish, while the latter is just yet another tax-and-spend scheme. Both favor the established political parties and powerful incumbents —  both of which already possess the wealth and power necessary to navigate the costly and legally intricate campaign-finance world. This further allows powerful incumbents to exclude other groups by upping the financial ante necessary to mount any meaningful opposition.

In spite of this, the mainstream debate over campaign finance rarely admits of any other possibilities. The debate continually centers around either limiting donations by regular people, or by efforts to fund more campaigns with taxpayer money.

There is one reform, however, that would respect the freedom of donors while not requiring any new tax-funded programs.

If reformers really wanted to reduce the role of money in politics, and reduce the need to raise huge sums to challenge incumbents, reformers would call for political jurisdictions to be made smaller and more localized.

Big State Require Lots of Campaign Spending

We know, for example, that US senators in large states must raise more money and must spend more time raising money in order to remain viable candidates.

In their study on the US Senate, Sizing Up the Senate: The Unequal Consequences of Equal Representation, Frances Lee and Bruce Oppenheimer found:

[S]enators representing more populous states must devote more of their time in office to raising funds than those from smaller states ... senators representing large states must raise more campaign funds than those from small states. ... Differences in constituency size in the Senate create great variation in a senator’s need for campaign funds.

Senators, from small states, in contrast, report no such problem. When surveyed by Lee and Oppenheimer, one small-state senator remarked “I don’t ever remember working hard at raising funds,” while a staffer for another small-state senator suggested “fund-raising ... takes less time than people think.” Meanwhile, for large-state senators, fundraising is essentially “continuous,” requiring in many cases that the senator begin raising funds as soon as his or her six-year term begins. Small-state senators, meanwhile, report doing little fundraising in the first four years of the term.

The High Cost of Television

The reason for this is primarily connected to the need for media buys in large states, where television and radio provide the primary means of a candidate getting support from a large population. In Congress and its Members, Roger Davidson, Walter Oleszek, Frances Lee, and Eric Schickler write:

As a rule, statewide Senate races are mass-media contests, with messages conveyed mainly through radio and television. Costs are especially high in densely populated states with large metropolitan media markets. Senate candidates typically spend far more on media advertising and fund-raising than do their House counterparts, who spend more on traditional means of voter contact.

Despite its astronomical costs, television advertising is popular because candidates believe it works. Almost all households in the United States own at least one television, and the average adult watches five hours of television a day.

For a large state with multiple media markets, of course, this presents a very high expense for even a single candidate.

Davidson, et al. also conclude “constituency size is also a crucial variable in elections.”

Thus, in smaller states, the picture is quite different and “[c]ompared with their large-state colleagues, [candidates] are more visible and accessible to constituents and have less difficulty raising the campaign money they need to run for reelection. But they are not electorally safer, as their challengers, too, have an easier time mounting their campaigns and gaining visibility.”

In other words, the bar to challenging a US senator in a small state is lower — at least financially.

Candidates in smaller states can engage in less-expensive forms of campaigning, as Lee and Oppenheimer note:

Senators representing small states may even choose to rely less on “wholesale” expensive mass media in their campaigns, preferring to meet voters at lower expense in face-to-face “retail” settings such as festivals, fairs, and factory gates.

Senators from large states, by contrast, have little choice in the matter. They simply must raise enough funds to mount a media-intensive campaign.

Naturally, these same issues apply to political campaigns outside the US Senate.

Races for seats in the House of Representatives, not surprisingly, tend to involve considerably smaller sums of money than Senate races. State legislature races are cheaper still.

This isn’t just due to what’s at stake in each race. In state-level and House-level races, it becomes less economical to rely primarily on the mass-media approach for the same reasons small-state senators rely less on mass media: it’s easier and cheaper — and often just as effective — to rely on more “retail” types of campaigns.

Over time, though, it shouldn’t be surprising that the cost of running a campaign has risen substantially as the size of constituencies have risen.

Districts Used To Be Much Smaller

Once upon a time, the number of members of Congress rose as the overall size of the population increased. This was clearly in line with the intent of the people who wrote the US Constitution, and who imagined political districts much, much smaller than we have today. Since 1929, though, the size of Congress has remained fixed, and the number of people in each Congressional district has more than doubled in nearly every state. And with this change, comes a need to reach more people with more strategies that allow a candidate to reach a mass audience. The price of doing this has increased substantially.

State legislative districts have seen similar changes, too, and some of the worst cases are found in Western states that have seen enormous population increases over the past century.

Colorado’s General Assembly, for example, has always had 100 members. It had 100 members in 1876 when Colorado became a state, meaning that the average constituency size was about 1,900 people in 1880. Today, that has increased to around 53,000 — for an increase of more than 2,600 percent.

Some places, though, are worse than others. To this day, state legislative districts in Vermont and New Hampshire contain fewer than 4,000 people.

US lawmakers, however, have long since abandoned any idea of making sure that political districts are sized in such a way as to enable candidates to advertise themselves in ways other than costly mass media. In small states like North Dakota or New Hampshire, of course, constituencies continue at moderately manageable scales.

States like Texas, California, or Virginia, are an entirely different matter.

Thanks to the way the United States is constructed, of course, changing the size of states — and thus the constituency sizes for US senators — is a long and arduous process. But politicians aren’t even interested in the far-easier process of shrinking constituencies for House members or state legislators. Changing the size of congress would require nothing more than legislation. Many states would need to change their constitutions, but state constitutions are changed all the time.

Some people who think they are clever dismiss these reforms and say “the last thing we need is more members of Congress, the fewer of those lousy people the better!” What these people are really saying, though, is “I think it’s perfectly fine that members of Congress spend most of their time begging for money from powerful donors and interest groups. It’s fine that districts are so large as to render the single vote or campaign donation of any citizen as essentially meaningless.”

In the real world, however, these things do matter, and the fact that the American political system now makes it exceedingly difficult to challenge incumbents like Dianne Feinstein isn’t a good thing. If politicians spend all their time begging for money from the rich and powerful — and we’re fine with that — then we have little room to complain the next time the Congress votes in favor of a huge bailout package for Wall Street. The cost of campaigning makes it inevitable.

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