Archive for April, 2015

Is the Answer to Lobbying More Lobbying?

Great thinkpiece by Lee Drutman over at the Washington Post blog, Monkey Cage.

The conventional wisdom about political influence is often summed up in the familiar three-word mantra: “follow the money.” It’s a mantra that assumes politics is a high-dollar vending machine with politicians and policies for sale. It suggests an obvious solution: get all the money out of politics. And while we’re at it, let’s also get rid of all the lobbyists, and all the “special interests.” Let’s make it so that Congress is “dependent upon the People alone,” as Larry Lessig put it, channeling James Madison.

I suspect this how many people want democracy to work. But it’s simply the wrong way to think about it, and it points to the wrong solution too. If we are concerned about the influence of special interests and lobbyists, we need to embrace a seemingly counterintuitive solution: more lobbying. But also different lobbying – lobbying that offsets the power of concentrated interests, not simply reinforces it.

The concept espoused is simple: people don’t really think special interests are per se bad, since, your and my viewpoints are…the views of special interests. What I think people mean when they say they want to get rid of lobbyists and special interests is that they want to get rid of the imbalance of power implied in the notion of lobbyists and special interests today. Democracy is about hearing all sides of a particular debate and ensuring that democratic principles play out.

I’ve been thinking a lot about the issue of money in politics since first hearing of the “Tullock Paradox” in scholarly work from Tyler Cowen. The Tullock Paradox describes a concept seen in lobbying.

The term Tullock paradox refers to the apparent paradox first observed by the public choice economist Gordon Tullock on the low costs of rent-seeking relative to the gains from rent-seeking. The paradox is basically that rent-seekers seeking political favors can usually bribe politicians to give them the favors at a cost much lower than the value of the favor to the rent-seeker. For instance, a rent seeker who hopes to gain a billion dollars from a particular political policy may need to bribe politicians only to the tune of ten million dollars, which is about 1% of the gain to the rent-seeker.

Put simply, the Tullock Paradox demonstrates the incentive for corporate entities (mostly) to engage in lobbying, because the cost to them is typically orders of magnitude lower than possible benefits received if successful.

Tyler Cowen links to a perfect example of this on his blog.

According to statistics United Republic assembled, the prescription drug industry spent $116 million lobbying for legislation to prevent Medicare from bargaining down drug prices — legislation that enabled drug companies to make an additional $90 billion annually. That amounts to an extraordinary 77,500 percent return on investment. Oil companies, in turn, had a return on investment of 5,900 percent, and multinational companies, 22,000 percent….

For example, the Carmen Group, a Washington lobbying firm, boasted on its Web site that for every dollar it collected in fees, clients got $100 in benefits.

There’s a Constitutional law concept espoused in equal protection and due process jurisprudence popularized by John Stuart Mill, referred to as the “Tyranny of the Majority”. The basic concept is that one of democracy’s central flaws is the ability of a perceived majority to place its own interests above a minority group. Particularly in the post-Citizens United world, I think the metaphor of this concept can be extended to the problem many see as a significant challenge currently facing our political democracy.

Lee Drutman continues,

The types of organized interests we might expect to provide a countervailing force to business — labor unions, groups representing diffuse publics like consumers or taxpayers – now spend $1 for every $34 business spends on lobbying, by my count. That’s up from a 1-to-22 ratio in 1998. Of the 100 organizations that spend the most on lobbying annually, consistently 95 represent business.

Those are some astounding statistics and underscore the Tyranny of the Majority concept, the majority here, being related to the central tenet of Citizens United, that money is speech. Controlling a majority of the money, it would seem, means controlling a majority of the speech.

The solution posed by Drutman is a fascinating one, which I need to give significantly more thought to. Much in the same way the U.S. Justice system is premised upon the right to a trial by peers, which, in turn, creates the need for a public defender’s office to defend qualifying defendants, Drutman proposes the idea of public lobbyists, either done through public matching of funds or direct subsidy. His rationale is that certain voices aren’t fully represented, and this would ensure certain aspects of democracy can be protected.

The idea to create any new government agency should always be served with a large dose of skepticism, particularly when purposeful underfunding of that entity would create intentional ineffectiveness. But the idea is novel and appears to address one of the most complicated challenges facing our democracy today.