Front Page Titles (by Subject) POWER CORRUPTS, SO LET 'S MAKE IT LESS ABSOLUTE * - Political Economy, Concisely
The Online Library of Liberty
A project of Liberty Fund, Inc.
Search this Title:
POWER CORRUPTS, SO LET ’S MAKE IT LESS ABSOLUTE * - Anthony de Jasay, Political Economy, Concisely 
Political Economy, Concisely: Essays on Policy that does not work and Markets that do. Edited and with an Introduction by Hartmut Kliemt (Indianapolis: Liberty Fund, 2009).
About Liberty Fund:
The copyright to this edition, in both print and electronic forms, is held by Liberty Fund, Inc.
Fair use statement:
POWER CORRUPTS, SO LET ’S MAKE IT LESS ABSOLUTE*
Party-financing scandals seem destined to be Europe’s new plague, cropping up here and there with increasing frequency and never really abating altogether. In the last ten years or so, illicit party funding has become the prime detonator of public scandals in Italy and France and has moved to center stage even in Germany. France now seems to be the country most shaken, with recurring allegations that President Jacques Chirac accepted millions in kickbacks for his Gaullist Party, though few of France’s neighbors have remained immune. Is any of this new?
Using dubious means to raise the money political parties need to keep themselves in the style to which they are accustomed is not a fresh invention. Former British prime minister Lloyd George sold peer-ages the way a grocer sells pound packets of sugar; across the Atlantic, “Boss” Richard Daley of Chicago and the legendary chiefs of New York’s “Tammany Hall” were masters at fortifying their power bases by “judiciously directed” public spending. Across much of continental Europe, professional politicians have seldom missed opportunities to enrich themselves or their parties. As democracy spread and mandates to govern came to depend on electoral swings, competitive vote-getting has come to depend on often-ruthless fund-finding tactics, involving anything from legitimate fund-raising to outright graft.
So why pay attention to the current incarnation of this old phenomenon? The difference this time is that this established practice is, unusually, prompting indignation and disgust from the population. The scandals, spun out by the media in teasing detail, are generating contempt for politicians and increasing a popular refusal to be led by the “chattering classes.” The Danish rejection of the euro in a referendum last month, despite the near consensus for it among mainline politicians and editorial pages, was more than anything an example of people no longer willing to be led by the political class. Europe seems to be fed up with politics as usual.
It would be nice to believe that this newfound indignation has come about because our standards of public morality have suddenly risen. But in the absence of any visible evidence that they have, we should look for an explanation elsewhere. I would suggest that the sudden backlash has to do more with the size of the corruption than with its nature. As government has steadily grown in recent years, so has politics, and so has corruption.
To see why, we should analyze the three broad ways of financing politics. The first is the Anglo-American one. In Britain and in the United States, substantial differences notwithstanding, individuals, businesses, labor unions, and other associations make voluntary contributions to parties and candidates. The amounts and their disclosure may be regulated, but as long as the system remains transparent, it appears fair enough. It involves no theft of public funds; the donors give their own money.
While the front end may look honest, however, the back end is not always so. While some donors no doubt act out of a sense of public duty, many expect to be noticed and remembered by the party or candidate they have supported. Once elected, the politician must pay for the support one way or another, on pain of getting no support the next time round. There is no more tangible manner of saying thanks than the diversion of public spending or the twisting of the regulatory framework in favor of the benefactor. The bargain may most often be tacit but is no less immoral for that.
In countries where voluntary donations are not the custom, outright graft is the unpalatable alternative. Here, the party controlling a city, regional, or national budget will award public works or supply contracts, issue building permits or licenses for new supermarkets to the enterprise that offers the right kickback in the right manner. Public payrolls will be padded with party stalwarts, this being the carrot; the stick will often be tax audits.
The broad public has long suspected that these exchanges were taking place, but they had seldom seen them come to light, due to the complicity of politicians and the subjection of magistrates and the press to the powers-that-be. Things began to change in the 1990s, when first Italian judges and then their French counterparts staged a veritable insurrection. Their dogged investigations uncovered scandals of Byzantine complexity. Ironically, the culprits were often surprisingly innocent, in that they had stolen millions for their party without much, if any, of the money sticking to their hands.
The third way (growing in political acceptance on the Continent) attempts to solve the moral dilemmas of the first two. The only way to stop parties from working out tacit or explicit exchanges with donors in their search for funding is to give it to them openly and publicly, subsidizing parties subject to some threshold of electoral support, reimbursing campaign expense subject to some ceiling, and so forth.
Advocates of this approach argue that it removes the need to sin. But they fail to notice that it is, if anything, more immoral than the corruption it attempts to stamp out because it forces taxpayers to subsidize the cost of gaining and holding on to power. Not only are taxpayers made to pay for parties whose programs they may abhor, but worse, it makes the whole political class—not just elected politicians, but unelected ones too, as well as a whole host of campaign advisors, party workers, and general hangers-on—a ward of the state.
ALL ARE IMMORAL
Anyone reviewing the three methods could easily conclude that all manners of financing democratic politics are corrupt in some vital aspect. All are immoral, and it is hard to say which is more so. The despair itself suggests a solution, however.
All three flawed formulas would be tolerable, and tolerated the way fleabites or other minor irritants are suffered, if only politics had not assumed such an overwhelming, absolutely dominant role in recent decades. Roughly half of what the average European country produces is consumed in ways decided by national and local governments. A supranational government is starting to take a rising share, too. It is no use saying that all these governments are, in turn, elected by the same individuals who work to create the national product. The connection, tenuous at the best of times, no longer functions. The share of gross domestic product taken by the stewards of the collectivity has simply become too large, while the individual’s influence on the collective’s choice has become too remote, too hypothetical.
The trouble with politics is not that it is corrupt, but that it is too big. Its essentially competitive nature pushes it to expand, to preempt for itself more and more of the space individual choice used to fill, until it reaches the limit of tolerance fixed by each society’s history and state of mind. In most parts of Europe, we are now probably straddling that limit. The disgust with politics is one symptom that we’ve gotten there. The remedy, if there is one, must lie in reversing the expansionary drive of the democratic state. Government must be put in its place. We are paying too dearly for the collective “benefits” the modern state professes to shower upon us.
Economics, True and False
[* ]First published in the Wall Street Journal Europe, October 17, 2000. Reprinted by permission.