FOLLOW THE MONEY : Why campaigns should be publicly financed.

What would happen if the United States funded the Defense Department through private contributions? Would those sections of the country that contribute more to defense be better protected than those that gave less? If the interstate highway system were paid for by the donations of private citizens, how likely is it that the nation's transportation system would serve the entire country and not just those who foot the bill?

The answers to such questions are obvious. Few would doubt that if these services were privately financed, their benefits would be biased toward the funders. The interests of the rest of the population would at best be an afterthought. Damaging as such a system would be, what then is to be said about a political system in which the wealthy provide the bulk of campaign financing? Certainly it would not be a stretch to say that a political system paid for by the affluent is one that will be disproportionately responsive to the well-off and less attentive to the needs of the rest of the population.

Funding for elections in a democracy should not depend on an economic elite. When the rich pay for electoral campaigns, the substance of politics is confined to the issues and policies that wealthy funders approve of. To be sure, the electorate gets to vote. But the choices presented to voters are, at best, those that are acceptable to the wealthy. At worst, of course, such a system is simply corrupt.

Almost all economically developed democracies have tried to reduce the importance of private money in elections. A study by the Center for a New Democracy and the Center for Responsive Politics showed that only the United States, Ireland, and Switzerland do not either provide public financing for candidates to the national legislature, or restrict the expenditures of such candidates. Further, the United States is alone in not providing free media time to office seekers. Presidential candidates in this country do have the option of funding their campaigns with public money (Albert Gore chose public funding, while George W. Bush relied exclusively on private donations). In addition, four states offer significant public financing for state offices and several cities do the same for local races. Nevertheless, the United States lags behind virtually all of the developed world in the effort to democratize elections.

The dominance of the rich is now so blatant that even politicians who benefit from it are ashamed. The McCain-Feingold Bill (Shays-Meehan in the House of Representatives) is a well-intentioned effort at reform. This legislation imposes a ban on "soft money" payments to national parties, and restricts "issue advocacy" by unions, corporations, and other interest groups. It is not hard to understand what motivates these limitations. Unregulated donations made for "party building" easily find their way into electoral campaigns. Similarly, issue-advocacy ads have become an only slightly disguised means of circumventing current campaign contribution limits.

There are elements of McCain-Feingold, however, that raise concerns. The first and most obvious is that, as passed by the Senate, the legislation doubles the permitted level of "hard money" contributions. Obviously this provision--perhaps necessary to secure Senate passage--is a concession that chips away at the principle that private money in elections should be curtailed. Two other aspects of the legislation are also worrisome. First, its passage is likely to result in increased, not decreased, public cynicism because, in the end, the legislation's restrictions will not do very much to rid the system of its pro-wealth bias. News reports have already appeared detailing how the major political parties plan to circumvent the law's intent. The prevailing view is that with the banning of soft money, political action committees (PACs) will once again serve as the conduit of choice for the wealthy. Finding other loopholes in the law has already begun.

The second matter of concern is the impact of McCain-Feingold on the political parties. Parties are vehicles for political mobilization and expression. Depriving them of funds tends to weaken an important mechanism by which opinion is expressed. The banning of issue-advocacy advertisements does the same. It narrows the scope of political discussion without creating an alternative outlet for public debate.

This argument is used by critics of campaign finance reform, such as Bradley A. Smith who, in his recent book, Unfree Speech (Princeton), plausibly maintains that legislation such as McCain-Feingold will reduce political debate. Smith, a member of the Federal Elections Commission, also contends, in this case unconvincingly, that campaign contributions play only a minimal role in shaping policies and legislation. But even he does not totally deny the problems associated with privately financed campaigns. Rather, Smith argues that the unintended consequence of limiting private financing will do more harm than good.

What about a reform that does not limit contributions, instead making public money available to candidates? Public financing would provide funds directly to viable candidates, enabling them to present their ideas and policies without considering the effect on potential contributors. With public financing, there would be no need to be concerned with the inevitable loopholes that will be found in any effort to regulate political contributions.

In this case Smith reverses course and argues against reform not on principle, but because of political expediency. Smith concedes the advantages associated with public financing of elections: increased electoral competitiveness and accountability; a better flow of information to voters; and an increase in the number of well-qualified candidates. Nevertheless Smith opposes this kind of reform. In this case, however, it is not because of a lack of intrinsic merit, but because it is an approach that is "off the charts politically."

Taken at face value, Smith's argument constitutes a case for grass-roots organizing. Polls show that the American people overwhelmingly support reforming the electoral system but shy away from full public financing as a remedy. What is at issue here is the antipathy of the American people to government social programs. The criticism made by opponents of reform that public financing presents "welfare for politicians" brilliantly taps into this hostility. Therefore, this attitude must change if we are to democratize our electoral system.

To persuade the American people to support the public financing of elections it will be necessary to convince them that elections are a "public good." Public goods are services that by their nature tend to be shared not only by those who pay but also by those who do not pay. Their use by one person generally does not preclude their use by others. Because of the collective way they are consumed, it is logical that they be purchased socially. If there is an attempt to have public goods privately funded, their availability becomes inadequate and their use distorted. If we tried to have our roads paid for privately we would wind up with a patchwork of toll roads located where users dictate instead of a network that links the whole society together. The same is true of policing. If based on private consumption, police would work to ensure the safety of those willing to pay, while the rest would go unprotected. As a consequence the society would be deprived of any hope of a consistent and fair administration of justice.

Many of the same attributes that make the nation's defense or highway system public goods are present in the electoral system. The outcome of elections affects all the people of the country, whether or not they contribute financially to campaigns. In politics, of course, the problem is not that campaigns are underfinanced--the deep pockets of wealthy special interests ensure that that is not the case. But the generosity of private funders does corrupt and distort the electoral process. Just as we would not want the highway system to serve private, as opposed to public, needs, or the police to protect one group of citizens but not another, we should not be satisfied when every election is little more than an exercise in which the wealthy seek access and influence by contributing to the campaign war chests of politicians. The solution is for the community as a whole to foot the bill.

Voters have to be persuaded that the electoral system is just as important to the health--in this case the democratic health--of the nation as the defense budget, airports, highways, schools, and law enforcement. The costs of electoral campaigns should be paid for out of tax revenues. Doing so would ensure that each outcome reflects the interests of all, not just the privileged few.

Obviously it will take much educational and political work to persuade voters to look at elections in this way. But until that is done, we will not be able to alter the reality that the private funding of electoral campaigns is the means by which the affluent set the political agenda. For reform to happen, grass-roots pressure is required. In its absence not much will change. Politicians have too great a stake in the current system. In short, campaign finance reform is a cause in need of a social movement.

There is reason for hope in this regard. Recent experience has convinced at least some activists that solving global economic and environmental problems must begin with domestic U.S. politics. For example, the Kyoto global environmental accord has been subverted by the refusal of the United States to accede to its terms. The United States has also failed to ratify the International Labor Organization's core labor standards, thus providing a license to anti-union efforts in poor countries. And the International Monetary Fund's notorious structural adjustment programs, depriving the poor of assistance and education, are in place because the United States, the country with the single largest influence in that organization, insists that what poor countries need is minimalist government. In all of this there is encouragement to be drawn from the fact that people in the movements addressing these issues increasingly recognize that the roadblock to progress is the role of private wealth in our politics.

A second source of hope has been the democratizing of the electoral process in cities and states around the country. In Maine, Arizona, and Massachusetts "clean money, clean elections" campaigns have won, and the option of full public funding of elections has been implemented. In cities such as New York and Long Beach and Oakland in California, partial public funding of elections has been adopted. These initiatives are the result of dedicated local organizers working far outside the glare of national publicity. Organizers know that triumphs at the state and local levels are critical in the struggle for national reform. Indeed, the history of progressive politics in the United States suggests that the momentum for federal legislation must bubble up from the grass roots. There would be no national civil rights, women's rights, or environmental legislation if it were not for such local groundwork.

The campaign-finance reform movement desperately needs an infusion of energy and enthusiasm. Advocates of reform have not been well served by the "Beltway" mentality. There are far too many lobbyists and lawyers tinkering with the details of reform legislation, and not nearly enough student and community activists holding politicians' feet to the fire. Democracy Matters, a campus-based organization with which I am associated, is attempting to reorient campaign-finance reform efforts. Our strategy anticipates that students working with diverse communities will find an outlet with a real possibility for political success. At the same time, community activists working with students will gain much-needed help in carrying out their efforts. Such a coalition can stimulate a rethinking of the way political campaigns should be financed.

Success will ultimately depend on whether these two wings of activism--students and local communities--join together. United States global and domestic policy will remain a private preserve of the rich and corporate interests as long as politics remain in thrall to the wealthy. Those who advocate change in America--and the world--cannot win until our elections are publicly financed.

Jay Mandle is the W. Branford Wiley Professor of Economics at Colgate University. He is also director of development for Democracy Matters (www.democracymatters.org).