The Free Market

Corruption in Government?

The Free Market

Tags Big GovernmentPolitical Theory

04/01/1997Llewellyn H. Rockwell Jr.

The Free Market 15, no. 4 (April 1997)


Washington's sudden fixation on campaign finance won't bring about honesty in government, and it won't increase anyone's liberty. But it does give the public a real-world civics lesson. For it shows that government is no neutral arbiter of justice, but a corrupt scheme by which the politically powerful enrich themselves at the expense of everyone else.

As each political party accuses the other of corruption, here's the rule of thumb: believe every word. The more at stake, the higher the price people will pay for access to power. When interest groups have to compete for access, the price is bid ever higher.

Thus corruption and graft must characterize any system that loots some 40 percent of the national income, blows $1.7 trillion of other peoples money every year, plays central banker to the world, and assumes godlike powers over every aspect of our lives.

In a free market, big isn't the same as corrupt or inefficient. Bigness is the reward of market success. If you give the consumers a good product or service at a price better than the competition, your business tends to grow. No matter how large the firm, its managers are always accountable to the public. Moreover, no market position, however exalted, is permanent. Private business must earn its keep every day, or suffer losses and even bankruptcy. This is what makes market institutions accountable; the watchdogs of the system are investors and consumers with their own property at stake.

In government, the opposite is true. Big and corrupt go hand in hand. The worse the government is, the more it grows at public expense. So long as the coerced revenue pours in, government can disregard the public interest, and go about its usual business of rewarding its friends and punishing its enemies. Rules, regs, and whistle-blowing that attempt to keep conflicts of interest at bay work about as well as prison bars of thread. For mankind has never discovered a method for keeping the robber state from acting according to its nature.

Campaign corruption is only one aspect of the general problem, but it is a particularly interesting aspect. For now we are only hearing about the kinds of political favoritism that skirt the law. Yet the vast majority of corruption in Washington is perfectly legal. Indeed, whole agencies exist only for the purpose of guaranteeing special favors. There's a revolving door between them and the industries they regulate, yet they are rarely hauled before Congressional committees to give an accounting.

The solution of the "good-government" types is campaign finance reform, which is what everyone in Washington now claims to favor. But the term "reform" masks a threatening agenda. They want to have the taxpayers, as opposed to private parties, pay for the high costs of running political campaigns. As bad as the present system is, this would be worse.

At least under the present system, average people can make a difference at the margin. From time to time, a Ron Paul can come along to upset the bipartisan balance. He can change the terms of debate and prevent the power elite from gaining complete control over the largely rigged democratic process.

The effect of campaign finance reform would be to bar outsiders from getting elected, or from contributing money to anyone who might threaten the system. The more government money that pours into campaigns, the more the system will be fixed on behalf of the power elite.

After all, private campaign contributions--even those that directly influence what a legislator or a president does--are not good or bad in themselves. It all depends on whether the special interest being advanced accords with the public interest.

Lets say an anti-tax group bankrolls a Senator into office. The group then demands that he pay them back by passing deep tax cuts. This is not corruption, since the result is to make people freer, and allow them to keep more of their own money.

But let's say a pro-tax group gives another Senator big bucks to raise taxes. Then the group demands that he vote for a new tax and the Senator complies. This is corruption, not because he is doing the funder's bidding, but because he has increased the amount of plundering and wealth destruction in society. And that would be evil regardless of whether he received any campaign contributions or not.

Is there a double standard here? Not at all. In politics, as in markets, money and influence are bound up with each other. When that combination is used to the detriment of the free society, it should be condemned. When it promotes the common good--as when it backs the cause of liberty--it deserves praise.

The same goes for the tricky area of foreign contributions. Evidence suggests that the Indonesian Lippo Group had a hand in the Clinton administration's vicious decision to lock up a million acres in Utah, preventing its clean-burning coal from being mined. The reason? The Lippo Group has an interest in a competitive stock of this very coal. In this criminal exchange of political favors, we see the height of moral bankruptcy.

However, let's say a foreign company wants to sell cheap cars to willing American consumers. It is prevented from doing so by high import barriers passed on behalf of the domestic auto cartel. The politician who takes foreign money and battles against trade quotas is doing exactly what he should be doing. For there is no basis, economic or moral, for any legal restrictions on what consumers can buy and sell.

Vast sums now finance elections. With a smaller government and a freer people, the amount spent would fall. If that is our goal, the only way to achieve it is by reducing the stakes in election outcomes by gutting the power of government. Until we reach that point, the only campaign finance reform worth pursuing is to remove all limits on individual and corporate contributions. Preventing conflicts of interest is as easy as abolishing all government privileges, payments, and contracts--that is, the welfare/warfare state itself. Legal favors that come at other people's expense should be unavailable at any price. Liberty, which should be guaranteed as a matter of right, should never be put up for sale.

What should we do when the Congress and White House feign shock at influence peddling, and hold endless hearings on who's the most corrupt? Rejoice that they are distracted from their usual activities.


Llewellyn H. Rockwell, Jr. is president and founder of the Ludwig von Mises Institute


Contact Llewellyn H. Rockwell Jr.

Llewellyn H. Rockwell, Jr., is founder and chairman of the Mises Institute in Auburn, Alabama, and editor of

Cite This Article

Rockwell, Llewellyn H. "Corruption in Government?" The Free Market 15, no. 4 (April 1997).

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