Picking losers

Thanks to James Paterson’s piece last week in the Australian part of The Spectator, I am no longer the lone classical liberal publicly against campaign finance reform.* He notes of the terrible NSW reforms of 2010:

particular industries were singled out for bans, including tobacco, alcohol and gaming. This is in addition to bans on property developers. The list appears to have been drawn up to target businesses the Greens hate the most, so no one should be surprised if logging companies, miners and anyone selling fatty fast foods are added to the list in the future.

Instead of government picking winners, this is a case of government picking losers. The law is even worse than James says, since not all alcohol and gaming interests are banned from donations to political and third parties for NSW elections. It is just the for-profit alcohol and gaming sector, leaving Clubs NSW – long-term big donors – to carry on as before without pesky contrary influence from their commercial competitors. All campaign finance reform redistributes influence within the political class, but rarely is the playing favourites as blatant as this.

The O’Farrell goverment plans to ban all organisational donations – no companies, no unions, no NGOs. Essentially, this is a strike at the capacity of others to finance opposition to the government of the day. Any supporter of liberal democracy should be horrified.

* I temporarily forgot Chris Berg’s criticisms of campaign finance laws. Three people against the rest of the political class.

9 Responses to “Picking losers

  • 1
    May 13th, 2011 08:39

    Well, organisations don’t get the vote, either. Unions and companies can still encourage their members and shareholders to make individual donations, right (with the money saved through lower union fees / higher dividends)?

  • 2
    Andrew Norton
    May 13th, 2011 09:41

    That’s O’Farrell’s argument, though he does not extend his logic to political parties. I don’t find it persuasive – organisations have legitimate interests of their own and as representatives of the interests of their staff, customers, members or shareholders.

    It’s a classic authoritarian strategy – crush or control intermediate groups, leaving only atomised masses more easily controlled by the state. While I don’t think this is what O’Farrell really intends (I hope not!) – I think he is caught up in the groupthink on this issue – this is where campaign finance law is going.

    There are gaps in the regime – within the spending caps, unions and business can still campaign in their own right, it is only their donations to other organisations that are prohibited or restricted.

    Ironically, it means that controls on public-spirited donor-reliant organisations are more severe than on the traditional vested interests these laws are ostensibly designed to curb.

  • 3
    May 13th, 2011 16:44

    “Three people against the rest of the political class”? What rubbish. There are probably thousands. You’re going to have to come up with a better argument.

  • 4
    Andrew Norton
    May 13th, 2011 17:38

    Probably. Just that silent opposition is not much help.

  • 5
    May 13th, 2011 19:57

    Opposition silenced is more common in Australia than silent opposition, in my view. But outside, the elite media, I do wonder how many classical liberals and other sympathetic tribes have written letters or spoken out. Perhaps you should work on ginning up a few more souls. Scare campaigns are always fun.

  • 6
    May 16th, 2011 12:55

    The interests of a corporation are supposed to be aligned with that of their shareholders (and likewise for a union and their members).

    The implicit argument against all such donations being individual is the free-rider argument – if my fellow shareholders / members are going to donate to further our cause, I can withhold my own donation and still gain the benefits. Permit me at least a tiny smile when I see an avowed classic liberal relying on the free-rider argument 😉

    Could an organisation perform an end-run around these laws by, for example, providing a $10 discount on your annual fee if you can provide a receipt for a $10 donation to a particular political party?

  • 7
    Andrew Norton
    May 16th, 2011 14:12

    Caf – These laws create a collective action problem, but one that is otherwise solved through freedom of association.

    I think that solution would be legal. But what you get here is that because people don’t like having their freedoms taken away they look for loopholes, and governments try to close those loopholes, and we end up with a regulatory cascade of ever-more bureaucratic restrictions that stifle all political activity – and not just the supposed sources of ‘undue influence’.

  • 8
    Andrew Norton » Blog Archive » Strangling political activity with red tape
    May 17th, 2011 11:19

    […] Queensland has largely avoided the particularly appalling NSW complete bans on donors. There is no singling out of disfavoured industries for bans, and while foreign-sourced donations are banned (as they already were), they have not […]

  • 9
    Andrew Norton » Blog Archive » Cracking down on dissent
    May 25th, 2011 05:47

    […] said that he will move to ban donations from tobacco companies. It’s a continuation of the ‘picking losers’ approach adopted in NSW. My nearly done campaign finance paper says of NSW: It sets a dangerous precedent: […]