Incorruptible Legislatures

How to Create an Incorruptible
Legislature
By
James L. Gamble III, M.D., M.P.H., M.S.

Before you read this article, you must abandon all preconceptions of government, because what you are about to read will be as radically different from your current understanding of politics as Einstein’s Theory of Relativity was 100 years ago compared to the then current understanding of space, time and matter.

First, we must define what is “corrupt” and must understand the difference between honest payments and corrupt bribes.“Corrupt,” according to Webster’s, means “to cause to be dishonest, disloyal, etc., esp. by bribery.” As a result, if someone or something does something to make another person lie, steal or become disloyal, corruption has occurred. The most important word in that definition, when considering legislatures, is “disloyal,” because constituents are hurt when their legislator is disloyal, but we might not consider that a legislator, who lies occasionally to protect the interests of his or her constituents as corrupt. As a result, if a sufficient number of small donors under Campaign Finance reform, who were not constituents like East Coast environmentalists, encouraged a legislator from an Oregon timber district to abandon the interests of his or her constituents, we could still have corruption under Campaign Finance Reform. If, however, a constituent from that district made a contribution to a legislator’s campaign to support legislation that protected the timber or environment interests of other fellow constituents of the same legislator and, thereby, creating greater legislator loyalty to his or her constituents, that payment would be a legitimate. As a result, money in politics is not necessarily corrupting, if it fosters greater legislator loyalty to their constituents.

Corruption in legislatures becomes possible, when a special interest group can focus their financial and political resources in a relatively small area, when their sponsored legislation will cause relatively large returns for that special interest group with relatively small implementation costs like lobbying fees, campaign contributions, etc., and when the costs for the effected consumers are so thinly distributed that the costs to fight the corruption are higher than the costs of the corruption to each consumer. For example, the multimedia companies obtained $60 billion in radio wave rights in the 1990’s for their lobbying costs, but it would have cost constituents $800 to fight these costs. These costs were too small to organize citizens, when many citizens could become free riders and benefit from the effort and finances of citizens, who fought the multimedia companies.

To measure corruption, it is necessary to have a parameter that is relatively free of political bias, because one person’s cause might be seen as another’s corruption. It is, also, necessary to have parameter that is relatively easy to estimate. For example, equality is a parameter for which its value would probably be extremely difficult, if not impossible, to measure. Since economists’ use “efficiency” as a measure of “good” and since corruption like the current security trading scandal results in the waste of resources, “efficiency” from the perspective of consumers should serve as a useful way to determine corruption. Efficiency has an added advantage, because it would allow reformers to pursue inefficiencies like unemployment, drug and alcohol addiction, and even war and terrorism. In addition, productivity might also serve as another useful parameter, if efficiency is maintained. If, however, productivity worsened efficiency as might occur with an increased productivity of cigarettes, productivity would not be a good parameter by itself. If, however, one reduced productivity by the monetized health and morbidity costs, if might be appropriate. Another alternative might be to use net consumer and producer surplus, when feasible.

To define efficiency, we need to have an organization that is separate from the government like a nonprofit foundation. This foundation would need representatives from various groups to ensure transparency. Two might come from the federal government with one representative from the Senate and the other from the House of Representative. Two might come from “good” government nonprofits like Common Cause, Transparency International etc. Other representatives should come from members of a developing industry, whose members will receive legitimate payments for their successful efforts to fight corruption and improve public policy. These members might include representatives of innovators of more efficient policies and representatives of lobbying constituents, who support those policies. These stakeholders are necessary, because they will want to defend and broaden the definition of efficiency. In addition, the foundation might include representatives from professional organizations like associations of economists and accountants.

Since money is the mother’s milk of politics and since candidates need money for their campaigns, anticorruption forces must be able to find sources of money to fight corruption. Unfortunately, it is difficult to prevent non-contributing, free riders from the benefits of successful fights against corruption, because the law usually applies to everyone. As a result, the fight against corruption is usually what economists would call a non-exclusive good. A non-exclusive good is a good from which you cannot exclude people from its benefits. For example, if John Jones did not pay his taxes in Seattle, you could not tell Kim Jong Il, the dictator of North Korea, to only drop nuclear weapons on only John Jones. Since John Jones can not be excluded, defense is a non-exclusive service. If people don’t have to pay for defense or the fight against corruption in a pure market environment and they can not be excluded, many people will become free riders and the market will not be supply enough military defense or defense against corruption without government intervention. The result will be a market failure. When the market fails, the alternative is to have the government correct the situation in an attempt to ensure that the enough anti-corruption is produced. As a result, government must pay to fight corruption. These payments should include campaign and lobbying costs.

If government must intervene and pay to fight corruption, then whom should they pay? The government can’t pay candidates, because candidates have a conflict of interest and because they may not support “good” legislation once elected into office. Such payments may, also, cause different type of bias against candidates, who have better ideas, better agendas or better personal qualities. Such payment may also cause other bias for or against different agendas. As a result, the government should not pay candidates.

The government can’t pay contributors before election, because contributors may not support the “good” legislation after the election. The government can not pay non constituents, because these non-constituents may encourage a legislator to act against the interests of the legislator’s constituents. As a result, if the government is going to support the fight against corruption, the government must pay contributing constituents of legislators, who support anti-corruption efforts, and must pay after the “good” law has been signed into law by the President, governor, mayor, etc.

Since government must pay campaign contributors after the passage of the “good” legislation, then the next question is, “How much should the government pay?” To determine how much the government should pay for anti-corruption efforts, the government must have a market like PoliticalSheepdog.com. In addition, it must have limits on these payments to ensure that the costs to pay for the anti-corruption spending never exceed the costs of the corruption.

This approach is likely to be successful for several reasons. First, when a commercial special interest group like a corporation tries to corrupt legislatures, they must usually pay for their lobbying efforts from the profits of the corporation, while the corruption fighters can be paid from the equivalent of the corporate revenues, derived from those “bad” activities related to the corruption, because the entire revenues would be an inefficient loss to consumers without the efforts of the corruption fighters. As a result, the corruption fighters are more likely to prevail, because revenues are usually larger than profits and thus corruption fights can spend more to fight corruption, than the corruptors would have to support it. If people can make more money when they de-corrupt legislatures, than they can make when they corrupt legislatures, then there will be almost no incentive to corrupt legislatures as long as the corruption costs are above equilibrium between the respective transaction costs of the corruptor and the de-corruptors. As a result, it will be possible to eliminate most corruption. In short, “If there is no slop in the trough, the pigs won’t come.” Second, if people can make money, when they stop corruption, then innovative citizens will be on guard to de-corrupt the system, whenever someone tries to corrupt it. Since they can respond quickly with PoliticalSheepdog.com, the system is self-correcting, further eliminating corruption.

Unfortunately, there are three main obstacles to develop incorruptible legislatures. Two obstacles consist of obsolete lottery laws and a 1910 Supreme Court precedent, probably Brooklyn Daily Eagle v. Voorhies, C.C.E.D.N.Y.1910, 181 F. 579, because this precedent and these laws would consider that a campaign contribution to enter an auction for a share of the savings from the destruction of corrupt laws would be the same as a payment for a lottery prize, obtained by chance, even though 1) the campaign contributions would not become part of the prize, 2) the total winnings could far exceed the total contributions (especially in states where there were no limits for contingent lobbying fees) and 3) winning is determined through an equilibrium of supply and demand for political support, instead of a random drawing.

The other main obstacle is the inertia of two inappropriate perceptions that 1) we can get good government for free and 2) all payments for political support are corrupt, even though some may help protect the interests of most constituents and encourage greater loyalty from a legislator for her or his constituents.

While the above laws would forbid campaign contributions to candidates to prevent corruption, it will still be legal for a limited time to use markets for lobbying constituents to encourage legislatures to have their governments pay to prevent corruption, but this window of opportunity has only opened for a brief time, because it depends on patent rights and depends on the timing of elections. Patent rights are necessary to provide intellectual property rights for policy innovators and signals to potential policy innovators, who will fight corruption and develop better policies to fight drugs, alcoholism, securities scandals, etc., etc. Once the patents expire, supporters, who want to implement the laws necessary to produce an incorruptible legislature, will not be able to receive incentives. Then, the fight to promote the necessary policies will take much longer or may not be possible at all. Then, citizens will be doomed to eternal victimization through legislative corruption.