January 23, 2010

What we have here is a failure to coordinate

Posted in Miscellaneous tagged at 1:15 am by Eamon Aghdasi

Why does the recent ruling by the US Supreme Court on corporations and political influence strike us as so potentially dangerous? The answer lies not in the legal side of the issue, but rather the economics of how individuals consolidate to influence decisionmaking.

This past Thursday’s ruling by the US Supreme Court — to reduce limits on political campaign contributions from corporations, labor unions, and other organizations — has ignited a frenzy of debate over the original intention and the appropriate modern interpretation of free speech in America. As someone who is concerned about the influence of corporate interests in politics in general, my initial reaction was one of alarm. I personally have felt that this is maybe the biggest problem facing our country today, and it is hard to argue that the Supreme Court’s decision won’t exacerbate the situation.

Source: bendib.com

It’s clear to me that from a legal perspective, both arguments on this issue have validity. The point argued by a slight majority (five of nine justices) — that corporations are entitled to First Amendment protections and thus can not be differently restricted in their political contributions — is hard to refute, if one focuses on the language of the Constitution itself. Nonetheless, one could easily respond that this was never the intention of the authors of the Constitution, and that the ruling would have destructive effects on democratic institutions. The complexity of the issue is summed up by the words of Justice John Paul Stevens, who sided against the court’s decision. Stevens conceded that “we have long since held that corporations are protected by the First Amendment”, but ultimately concluded that “the court’s ruling threatens to undermine the integrity of elected institutions around the nation”.

But regardless of the legal correctness of the ruling, there is the issue of ruling’s actual effects, and this is where many of us feel a chill down our spines. We imagine a world where corporate interests have even more sway in legislation than they have now, and the voices of individuals are drowned in a sea of lobbies and interest groups. But is this really what will happen? Wouldn’t a free market for information produce the best possible political decisions, just as it does in goods markets? The argument is that if the market for information and political influence are free, then the elements with the most to gain will push and spend the hardest to get their policy choices to the front in Washington. Just like people vote with ballots, the free market allows the nation to vote with dollars. At least that’s how the narrative reads.

Most people with sense, however, take a look at American politics and realize that this narrative doesn’t quite play out in real life. There seems to be something getting in the way of this neat and just market scenario, and skewing the distribution of influence towards the big players. But most of us can’t really put our finger on what that something is.

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