Lawrence Lessig illustrates problems with the current campaign funding system for Congressional elections, discusses the history behind it, and offers his solution for a better funding system. October 9, 2012.
>> Well good afternoon everybody. I'm Susan Collins, the Joan and Sanford Weill Dean of the Gerald Ford School of Public Policy. And it's wonderful to have all of you here with us this afternoon. On behalf of the Ford School community, I'd like to welcome everybody for another in our series of distinguished lectures called Policy Talks at the Ford School. Today's event is cosponsored by the Michigan Campaign Finance Network and I would also like to thank the Director of that group who is one of our own alumni, we're very proud of that, Rich Robinson. And so thank you Rich. It's great to partner with you. We're so pleased to be joined today by one of America's influential academics, Professor Lawrence Lessig, the Roy L. Furman Professor of Law and Leadership at Harvard Law School and Director of the Edmond J. Safra Center for Ethics at Harvard. We've included a more detailed biography in the program and so I will encourage you to read that instead of reading it for you. But as you take a look at it you'll see how incredibly broad his impact has been. Just to highlight a couple of points, he's been at the forefront of research and advocacy on critical information age issues such as copyright enforcement, intellectual property regulation and [inaudible]. More recently his work has explored the themes that he's going to talk about today in particular ways in which democracy is threatened by the flood of money into American Electoral Colleges. And for all of his intellectual achievements he's also achieved, I would say an uncommon level of pop culture fame for an academic. I suspect that while we have a very distinguished list of speakers who we have invited to the campus this term, I suspect that he is the only one who will have appeared as a character in the West Wing or has been depicted in a popular Web comic. And so again, that breath is really, really quite impressive. Professor Lessig has agreed to take questions after his formal remarks and so they'll be members of our staff who will be coming down the aisles at around 4:30 to take question cards. Those of you who are watching online are invited to tweet your questions into us and please use fordschoollessig as the hashtag. We have Professor John Chamberlain, a member of our faculty and Rich Robinson who will select questions along with one of our undergraduate students, Lydia Austin, and they will also then read the questions to Professor Lessig. And so again please have your questions ready. We will be coming around the aisles at around 4:30 to collect them. And with that it is a great honor and pleasure to invite Professor Lessig to the podium. Welcome. [Applause]
>> Thank you very much. Thank you. It's a pleasure and an honor to be here. It's the first time I've had a chance to visit the Ford School. I've been to the law school many times. Indeed I was first admitted to law school at the Michigan Law School. I then went to Cambridge to study philosophy and the Dean of the law school wrote me a letter after I told him I wasn't going to come and he said, it's a very good thing for me to go study philosophy in Cambridge. It would teach me many things, most importantly it might teach me not to write letters using a dot matrix printer which I had sent my letter to the Dean in law school. I didn't come back to the Michigan Law School. So I want to start by remarking on the incredible reverence that we at least in the legal culture have for the collection of essays that are referred to as the Federalist Papers. It's possible lawyers are attracted to the Federalist Papers because these were basically the brief, actually the successful brief that made the case for why the constitution should be the constitution. But the Federalist Papers were extraordinarily important in the history of our constitutions interpretation. And in particular at the core is Federalist number 10 which sets out of theory of government, Madison's theory of government, which has been used to guide our understanding of our tradition in many different context. As Larry Kramer described in the Harvard Law Review, it's difficult to overstate the importance of this theory to today's understanding of the constitution in American government. Now at the core of Federalist 10 is a concern about faction. And as Madison describes it, by a faction I understand a number of citizens whether amounting to a majority or minority of the whole who are united and actuated by some common impulse of passion or of interest adverse to the rights of other citizens or to the permanent and aggregate interests of the community. And his aim in this essay is to describe how a political system might remove the dangers of faction. So he describes two possible ways. One is by removing its causes and he quickly throws that option out. And the other is by removing its effects or by regulating its effects. And so to understand its effects Madison points to the two kinds of factions that must be dealt with, a majority or a minority faction. And he first very quickly deals with the minority faction. He writes, if a faction consists of less than a majority, relief is supplied by the republican principle which enables the majority to defeat its sinister views by regular vote. It may well clog the administration, it may convulse the society but it will be unable to execute and mask its violence under the forms of the constitution. And from this one gets the sense Madison thinks minority faction is in fact not very dangerous in a republican democracy. But it's the majority faction that is his focus. When a majority is included in a faction the forum of popular government on the other hand enables it to sacrifice to its ruling passion or interest both the public good and the rights of other citizens. To secure the public good and private rights against the danger of such a faction and at the same time to preserve the spirit and the forum of popular government is then the great object to which our inquiries are directed. This is the problem Madison sets himself to solve. And in the next couple pages there's a bunch of hand waving to suggest indeed how our constitution solves that problem. And it turns out that if you point to every one of the vices in our constitutional problem, namely that we are a large republic and we have a democracy, it turns out these vices are our virtues. It is the shifting coalitions of factions across large republic that would never be able to reach common unison and purpose enough to create the dangerous majority faction. And it's this vision which throughout our history for example, [inaudible] Briar in Clinton versus the United States that is referred to as the genus of the framers pragmatic vision. Okay, here's the problem. This theory is totally wrong. About majority faction, indeed it wasn't the hand waving that sold the problem of majority faction, it was a Bill of Rights, Bill of Rights in which Madison himself didn't think was necessary but was eventually forced to put into the constitution. And with respect to minority faction our system indeed does just not solve the problem of minority faction. Indeed it's a total bust. We could say it deserves an F. Yet this document remains the ortext [phonetic] as the Harvard Law Review described of our constitutional tradition. And my question today is is there a way to recover a bit more? Is there a way to seize something in the Madison text that helps us understand this problem of minority faction better? Because I too come from the tradition that looks to these papers as founding documents in our tradition deserving the respect they have received. So, I want to show it some respect by working a little harder to understand what it might teach. And my view is that if we take this idea of the minority faction and focus less on the hand waving around shifting coalitions across a large republic and more on the sense of a republican principle, this republican principle will reveal something about how money corrupts in our tradition today and something about how that corruption might be removed. Okay, so here's the argument. I want to begin by introducing you to a place called Lesterland. It wasn't part of the introduction because this is state secret nobody knows. My first name is Lester, well the Michigan Law School knows that but nobody else. My name is Lester and so I'm going to take advantage of the fact that my name is Lester by making fun of some Lester's here by introducing this concept of Lesterland. So here's Lesterland. Lesterland looks a lot like the United States. Like the United States it has about 311 million people. And like the United States, 144 thousand of those people are named Lester. The internet told me that so it must be true. So 144 thousand which works out to about point 05 percent of Lesterland is named Lester. Now here's the thing about Lesterland, Lesters in Lesterland have a certain kind of power. There are two elections every election cycle in Lesterland. There's a general election where all citizens over the 18, in some states if you an ID get to vote. And there is a Lester election. And in the Lester election only Lester's get to vote. So Lester's get to vote, in the Lester election citizens get to vote in the general election. But here's the catch. To run in the general election you must do extremely well in the Lester election. You don't necessarily have to win but you must do extremely well. So here's the picture of democracy in Lesterland. What can we say about that picture? Well I think we can say three things. Number one, we can say as the Supreme Court said in Citizens United, the people have the ultimate influence over elected officials in Lesterland because after all there are two elections. There's a general election and all the people get to vote in that, that's the ultimate influence, so the people have ultimate influence. But only after the Lester's have had their way with the candidates who eventually get to run in the general election. Number two and obviously we could say this dependence upon this Lester's will produce a subtle and understated and camouflaged bending to keep the Lester's happy. Candidates can't be too obvious about their sucking up to the Lester's of the Lesterland but they have to keep the Lester's happy if they're to get the support of the Lester's. And number three, reform in Lesterland that angers the Lester's is we could say unlikely. All right, that's Lesterland. Now there are three things I want you to recognize about Lesterland. First, the United States is Lesterland, right. The United States also looks like this. The United States also has two elections, one election is called the general election, the other election is called the money election. In the general election all citizens over 18, in some states if you have an ID get to vote. In the money election, the funders get to vote, the funders of the campaigns. And as in Lesterland the trick in this democracy is to run in the general election you must do extremely well in the money election. You don't necessarily have to win, but you must do extremely well. Now that's the picture of democracy and here's the important point. There are just as few relevant funders in our democracy as there are Lester's in Lesterland. And you say really? Point 05 percent? Well here are the numbers. Two thousand and ten point 26 percent of America, I know you're thinking as a lawyer doesn't know how to do fractions, but I really mean point 26 percent, one quarter of one percent of America contributed $200 or more in a congressional election. Point 05 contributed the maximum amount to any congressional candidate. Point 01, the one percent of the one percent gave $10,000 or more. And my favorite statistic from this election cycle, point 000015 percent, for those of you doing the numbers you'll know that's 47 Americans, have contributed 42 percent of the super pack money that has been spent by the presidential candidates so far. So you look at this range. I think you should agree it's fair for me to point to point 05 as a relevant funder amount. And point 05 then I think is fair to call our funders the Lester's, all right, now. Like we can say about Lesterland, this is what we can say about USA land as the Supreme Court said in Citizens United is perfectly true. The people have the ultimate influence over the elected officials. But again, only after the funders have had their way with the elected officials. Number two, obviously dependents upon these funders produces subtle understated camouflaged bending to keep the funders happy. Candidates for congress spend between 30 and 70 percent of their time raising money to get back to congress to get their party back into power. And as they do that they develop as any of us would a sixth sense, a constant awareness about how what they do might defect their ability to raise money. They become in the words of the X-Files shape shifters. As they constantly adjust their view in light of what they know will help them to raise money, not on issues one to ten, but on issues eleven to one thousand. Leslie Byrne, a democrat from Virginia, describes that when she went to congress she was told by a colleague, quote, always lean to the green. And to clarify she went on he was not an environmentalist. [Laughter] And that points number three, reform that angers the funders is in this democracy highly unlikely. Okay, so that's the sense in which the United States is Lesterland. That's point one. Here's point two. The United States is worse than Lesterland, worse than Lesterland. Because you can imagine in Lesterland, if we Lester's got a letter from the government that said okay, you guys now have a very important power, you've got to pick the candidates that the rest of the country will vote on. You know, because we are pretty evenly distributed across the society, a little bit of a higher concentration among African Americans today than the rest then whites, but we're pretty evenly distributed. You can imagine we would begin to think it's possible we would begin to develop a kind of aristocratic attitude. We need to choose in the interest of Lesterland as a whole, that's our place, that's our purpose. It's at least possible that the Lester's would act for the good of Lesterland. But in our land, in this land, in USA land, the Lester's act for the Lester's because the shifting coalitions that Madison spoke of that comprise the point 05 percent are shifting coalitions that change in light of what issues are on the horizon for public policy. So if it's global warming legislation you know coal companies are among the Lester's. If it's healthcare you know insurance companies and pharmaceutical companies and doctors are among the Lester's. And this shifting coalition of point 05 percent is acting to drive public policy not in a way that aims at the public interest but aims at their private interest. In this sense, the USA is worse than Lesterland. Okay, that's point two, here's point three. Whatever is true about the traditions of Lesterland in our land, in our Lesterland, in our USA land this conflicting dependence between the people and the funders is corruption, corruption. It's not brown paper bag corruption. I'm not talking about cash secreted illegally among members of congress, it's not Rod Blagojevich corruption, I'm not talking about the violation of any criminal rule. Instead, it is corruption relative to the framers baseline. It's corruption relative to what Madison intended the constitution to create. For in addition to Federalist 10, there's Federalist 52. And in Federalist 52, Madison helps us understand the meaning the republican principle in the context of the democratic branch of government. Of course our constitution gives us what the framers called a republic. But as the Federalist and other documents demonstrate, what they meant by a republic was a representative democracy. And as Federalist 52 describes, what they meant by a representative democracy was a government that would have a branch that would be quote dependent upon the people alone. So here's the model of government. They have the people, they have the government. I do my own slides, it's cool the way that bounces like that, right, okay. The people and the government producing an exclusive dependency and through that exclusive dependency so would the public good be found. That's their model. Here's the problem. Congress has evolved a different dependence. It's no longer a dependence exclusively upon the people, it is increasingly a dependence upon the funders. This is a dependence too. But it's a dependence that is contrary to the republican principle because it is different and conflicting with a dependence upon the people alone at least so long as the funders are not the people. Now this is a corruption. And this corruption has an effect. And its effect is how money corrupts in this context I want to argue and we'll see others as well. But to get you to this place I need to brainwash you a little bit about exactly how to think about this intersection between money and policy. So let me give you some examples that will suggest what I mean. For many years as you heard in the introduction, I worked in the area of copyright reform. I became an activist around copyright. On October 27, 1998 when the President signed into law a statute in honor of this great American, the Sonny Bono Copyright Term Extension Act. Now what the Sonny Bono Act did was extend the term of existing copyrights by 20 years. And the question congress was to ask when it passed that statute was did it advance the public good to extend the term of an existing copyright by 20 years? Now what we know about copyrights is that they're an essential monopoly given out by the government to create the incentives for artists to produce great new work. But the thing we know about incentives, in this universe at least, put aside Star Trek, incentives in this universe are prospective only. Not even the United States congress can get George Gershwin to produce anything more. So when you ask the question, could it advance the public good by extending the term of an existing copyright? It's a pretty easy answer, the answer is no. And when we challenged this statute by getting 13 economists including five Nobel Prize winners including this liberal left wing, oh I'm sorry, right, this is Milton Friedman, right wing Nobel Prize winning economists to join the brief. Friedman said he would only join the brief if the word no brainer was somewhere in the brief. So obvious was it to him that you couldn't advance the public good by extending the term of an existing copyright. But apparently there were no brains in this place when congress unanimously extended the term of existing copyrights. What there was was more than 6 million dollars in campaign contributions from Disney and related companies eager to have their copyright term extended, the public good be damned. Here's another example. This is a picture of a 13 year old boy. It's a picture of a certain epidemic that is sweeping the United States, childhood obesity epidemic. As the Center for American Progress estimates since 1980 we have tripled the number of young children who are technically obese. Now for kids over 2, 1/3 are obese. Now this epidemic has costs. One of the most tragic is the rise in Type 2 Diabetes, the kind of diabetes that used to afflict old people only. Now in some communities half of the new cases are cases from kids. As the Center estimates there's 147 billion dollar annual direct care cost that flows from this explosion in childhood obesity. So why is we have this epidemic? Well of course it's related to what we eat. There's a consensus that we eat too much of this stuff, not enough of this stuff. Actually not technically sugar, instead it's the consensus that we're eating way too much of this stuff, high fructose corn syrup. A chemical mixture which in 1980 not a single person had consumed, now more than 40 percent of the products in your supermarket have high fructose corn syrup in it. So what explains that change? Well one thing there's a pretty significant different in the relative cost of sugar versus high fructose corn syrup leading some who love the market to say, well if that's what the market demands this is what efficiency requires. If in fact that's a better way to allocate resources we should embrace the allocation and learn to live with it. But it's not quite so simple. Sugar in the United States is expensive because tariffs protect the domestic sugar industry giving them about a billion dollars in extra profit every year and costing the American economy more than 3 billion dollars in inefficiency because sugar is 2 to 3 times as expensive in the United States as it is anywhere else in the world. And corn is so cheap in the United States because it's subsidized. Seventy four billion dollars in the last 15 years leading some economists to say that it's actually cost negative money to produce corn. Now you take that high cost of sugar and the low cost of corn and add it together, you begin to understand the radical shift then in the cost of foods. So between 1997 and 2003 the cost of vegetables went up by 17 percent, cost of a Big Mac went down by 5.4 percent, cost of a bottle of Coke went down by 35 percent. But you can also begin to understand the radical shift in how food gets made. I'm sure some of you saw this fantastic documentary about the industry that produces our food. And in this documentary described the way in which because corn is so cheap, it's actually profitable for farms to raise cattle feeding them corn rather than having them graze on grass. It's not so profitable for the cattle because their stomachs don't actually digest corn well so it stews in their stomachs breeding all sorts of bacteria requiring the farmers to feed to them tons of antibiotics which of course begin to breed their own plentiful source of antibiotic resistant bacteria which of course begins to get into the food chain. And if this were a film we'd cut to a scene about a 5 year old boy who had a hamburger and died because of the poison in his food. All of this because of the fact corn is so cheap and sugar is so dear. Now what free marketers should say is what explains this anti-free market silliness at the core of our food production system. And there are lots of possible reasons, presidential campaigns begin in Iowa, maybe it's impossible to get over this kind of craziness. But the one thing we can be sure of is the endless campaign cash that is spewed into the system supporting these two crazy results. ADM has spent millions of dollars to protect the subsidy to corn and the sugar industry has also been supported by ADM and others to keep the high price of sugar. All of this driven by the money which returns profits to them but not so much to the society. For indeed if it's because of campaign money, we can say campaign money here is distorting the market which is distorting food production which in the end is distorting our children. Well here's another example. Wall Street Journal was puzzled at the end of last year about the explosion of what they call extenders in our tax code. So our tax code is a complicated mess, that's a technical legal term, complicated mess filled with all sorts of exceptions. And these exceptions expire after a limited period of time. And when they expire the question congress has got to answer is whether they will extend that exception and when they extend it it's called an extender. And what the Wall Street Journal was puzzled about is what explains the explosion in the number of extenders. Well turns out the first of these tax, temporary tax provisions was given to us by Ronald Reagan in 1981, the research and development tax credit was put into our tax code but it was made temporary to test whether it would work or not. The democrats said it wouldn't work, the republicans said it would work. After a number of years they asked the economists on the republican and democratic side whether it worked. Economists said it did work. It was a great tax idea, absolutely made sense to be part of our tax code. But here's the puzzle. It is still temporary to this day temporary. So what explains that? Well Rebecca Kysar in this piece in the Georgia Law Review has an account that begins to fill in some of the details here. She writes, the principle recipients of the research credit are large U.S. manufacturing corporations. These business entities are more than willing to invest in lobbying activities and campaign donations to insure continuance of this large tax savings which was the queue for the Institute for Policy Innovation to write this cycle has repeated itself for years. Congress allows the credit to lapse until another short extension is given preceded of course by a series of fundraisers and speeches about the importance of nurturing innovation. Congress essentially uses this cycle to raise money for reelection promising industry more predictability the next time around. You begin to recognize the way this dynamic is central to how Washington works. We architect tax policy, of course in part to raise money for the federal treasury, but also to make it easier to raise money for campaign treasuries and not just tax policy. I'm sure most of you recognize this is the first page of the Communications Act of 1934. That Act regulates the communications infrastructure that we haven't inherited. It has six titles right now. Title two regulates what we used to call telephones, telecom. Title six regulates cable. Shortly after he invented the internet, I'm sorry that's very cheap, okay, but shortly after he became Vice President Al Gore decided he would launch a proposal to reorganize the way that this scheme was regulated to put the broadband related components of telecom and cable under a new Title seven. But the key of Title, this Title seven was that it would fundamentally deregulate providers of broadband service. So it would be deregulated rather than the relatively heavy regulation that existed for cable and for telecom and slightly less heavy regulation for cable. His Chief of Policy took this idea to Capitol Hill and as the Chief of Policy reported it back to me, the answer he got from Capitol Hill was hell no. How are we going to raise money from the telecoms if we deregulate them? Now ordinary people understand this as extortion. It's not what they call it in Washington but you begin to get the pattern clear, right. We architect tax policy, we architect regulatory policy to make it easier to raise money for campaigns. Well here's one final example here. I'm sure many of you when you saw this image of the Deepwater Horizon had the question which I had, which was exactly how was it that we could have such extensive experimental drilling technologies without lots of environmental impact and risk studies. After all where I come from we spent about 9 years and 10,000 pages to be allowed to build this clean energy, green energy project in the Bay. So when they drilled the Deepwater Horizon, how much analysis was engaged in before that was permitted by the government? The answer is 17 pages before they were exempted from any further requirement of demonstrating the safety of the technology. Now congress of course was shocked when it heard about this, sorry, it was supposed to have some, great this is two, right, this is again, right so we don't have audio. All right, well you know the scene. This is the great scene where he says, I'm shocked, shocked to find that gambling is going here. And the other guy comes along and says you're winning sir. And he says, oh thank you very much. Right, okay. So congress was shocked yet of course congress had required fast track approval process in the context of these technology. You ask the question why would congress have required such fast track approval process? Well there's lots of possible reasons. One thing we know is the endless campaign cash that was in the middle of this decision to make fast track the norm for these deepwater drilling platforms. Now here's the point. No respectable liberal, libertarian or conservative could defend these cases. Each of them is an abomination from the perspective of any of these political philosophies. So how is it they become core to public policy decisions by our government? Political scientists are uncertain. They said the story is complex. But here's the thing I'm quite certain of, you believe you know, you believe you know, all I have to do is point to the money and you believe you know the root cause behind this craziness. And that's the root to my claim. Number one, it's because of cases like this that Americans believe and I think Americans are right to believe but that's a separate question. Let's just focus on what Americans believe, money buys results in congress. Seventy five percent of Americans according to a study we did for the book that I published last fall, a little bit higher democrats than republicans but I guarantee you before the republicans took control of the House it was just as many republicans as democrats. So whether it's 2/3 or 3/4, here's the one thing we as Americans all believe. Money buys results in congress. Leading to point number two, that belief erodes trust in the institution of congress. So ABC News, the New York Times did a poll last year that found that 9 percent of Americans have confidence in congress, 9 percent. Let's put this in some context. It's certainly the case at the time of the American Revolution that a higher percentage of Americans had confidence in the British Crown than who have confidence in our congress today. And leads to point number three, that erosion erodes participation in this system. Rock the Vote which organizes and turns out young voters and organized the largest number of young voters to vote, 2008 found in 2010 a significant number of their voters were simply not going to show up. So they polled them to find out why. And the largest answer by far, 2 to 1 over the second highest reason was no matter who wins corporate interest will still have too much power and prevent real change. And it's not just kids. The vast majority of people who could have voted in 2010 did not vote in part at least because of this belief. Now that is the effect of money on the attitudes of people as it relates to politics. But not just politics. This idea of how money corrupts in the context of politics begins to suggest something about how money corrupts more generally. My colleagues and I at Harvard conducted this study in the concept of what we call institutional corruption at the decision lab we began to run a series of vignettes with students to present them with different scenarios about medical research, consumer products and politics. And in these different scenarios we would just change whether we surfaced a financial relationship between the decision maker and the ultimate decision that was being reported. And as you might expect, for example in medicine, where we go from a high confidence position where nothing is said about financial relationship to a medium confidence position where we identify a low conflict to a low confidence position where we identify a high conflict. Same thing in the context of consumer products. There's no statistical difference between the first two but then a quick drop off when there's a high conflict. It was interesting. It took some work to interpret politics originally and what we discovered is that the initial no mentioning of any conflict, there was no confidence already. When we mentioned a low conflict, people assumed oh geez, that's much better than most politicians in general. So they thought high conflict, confidence and then it went back down to no confidence when in fact we went back to high conflict. So these are the relative standings of these different professions and confidence as these, this study reports. And but the most interesting was in all of these cases the mere suggestion of a financial incentive significantly influenced participants trust and confidence. And more importantly, these subtle variations and hypothetical vignettes also significantly influenced participants judgments of their own doctors, politicians and consumer goods unrelated to the facts that we had described in the scenarios we were reviewing. Similarly in this New England Journal of Medicine study, which the center that I write at Stanford helped support, there was a randomized study about how doctors, clinical physicians interpret research about different medical products. And they had a very extensive study which asked them to read these summaries and the summaries would describe the methodology so high quality methodology, medium quality methodology, poor methodology and it would also mention the funding, NIH funding or pharmaceutical company funding. And what they found was the physicians discriminate among trials of varying degrees of rigor but industry sponsorship negatively influences their perception of methodologic quality and reduces their willingness to believe and act upon trial findings independently of the trial's quality. And that they say may affect the influence of the translation of clinical research into practice. The near presence of money in the mix leads doctors to have less confidence in the claims being made. Okay, that's the suggestion about how the appearance has the affect but is it right in the context of politics? Are the people right? Remember I said they were right to believe money was affecting results. So am I right that they are right? Well the research here is actually controversial about the substance of what congress does. A little bit overstated by advocates in this field so in my book I describe an exchange I had with Brad Smith. Brad Smith used to be the Chairman of the Federal Election Commission. So Brad Smith in the exchange on the radio said this about money and politics. He said, the evidence is pretty overwhelming that the money does not play much of a role in what goes on in terms of legislative voting patterns and legislative behavior. As he went on, the consensus about that among people who have studied it is roughly the same as the consensus among scientists that global warming is taking place. Now, Brad Smith is not a global warming denier, he is a corruption denier. And so shocked was I by this that I had to tweet it in the middle of the event. And I got a lot of trouble for this hashtag but that just means Brad Smith, that's all that stood for there. So but what is the evidence about whether results of what congress does is driven by the money? Well there's recent work that has begun to tease out much more effectively the statistically significant contributor influence in what in fact congress does. This study by Clayton Peeples finding that influence in 7 of 8 houses. But I think the more interesting work is by Professor Gilens of Princeton. What Gilens did is take about 1,780 surveys of public attitude which could reveal because of the way the demographics of the surveys were taken, the difference in attitudes of the very rich and the rest of America. And of the 780 surveys, 1,780 surveys he narrowed it down to about 880 where the attitudes of the very rich about what American policy should be differed from the attitudes of the middle class and poor. And he asked the question where the rich think we should go one way and the poor think we should go the other way, middle class and poor think we should go the other way, which way did America go? So he examined the actual changes in policy in light of these differences in attitude as related to wealth. And what he found was that when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear virtually no relationship to the preferences of the poor or middle income Americans. The vast discrepancy he describes between what policy makers do and what they would be doing if indeed they were following what the majority of the people would want. Now he's extended his analysis in this fantastic book just published this fall, but across a range of context he's able to say that there is absolutely a direct connection to the wealth and policy outcomes. And in the way I've described it, the wealth as it correlates with the influence of the Lester's in contributions is explaining the gap between what policy makers do and what they would do if they followed the will of the people. Now that's substance. On agenda I think the issue's actually much simpler. So remember because Brad Smith said that legislative behavior is also not affected by contributions. Well if you looked at 2011, the first quarter or the first third of 2011, and asked the question what was the number one policy issue that the United States congress spent its time focused upon? All right, we're in the middle of two wars, huge unemployment problem, the Tea Party was threatening a government shutdown if we tried to raise the debt limit again, debt ceiling again, we had lots to address in the context of healthcare, there was lots to address in the context of global warming, there is many, many pressing issues that congress might be spending its time on. What was the number one issue though that they spent most of their time on on the floor of congress and committee meetings? And the answer according to the Huffington Post was the bank swipe fee controversy. The bank swipe fee controversy dominated the agenda. Now what's the swipe fee controversy? Well when you use you debit card the retailers have to pay the bank a certain amount of money. And the controversy was should they pay the banks more or should they be allowed to pay the banks less? And that's a huge controversy for them because it's a lot of money for them. But the question is, why was it the central issue congress focused on? And as they described in this paragraph in their article, the clock never ticks down to zero in Washington. One year's law is the next year's repeal targets. Politicians showered with cash from card companies and giant retailers alike have been moving back and forth between camps pay it handsomely for their shifting allegiances. And you begin to recognize here the way in which the very agenda of congress is being driven by the question, which issues will help us to raise money in campaigns? So why isn't unemployment on the top of their agenda considerations? Well it turns out unemployment doesn't pay so well in this dimension at least. Okay, now this is in effect of money inside our system. It is among the effects that corruption has inside our system and therefore I think we should say absolutely this corruption has an effect in our politics. An effect which drives us to beg the next question which obviously is what could we do about that effect? Okay, well if there's a systemic problem here, the systemic problem is this. The funders are not the people. The systemic solution follows from that problem to make it so that the funders are the people. To give congress away, well I don't, nobody would take congress so I don't mean actually give them away but I mean give congress one way to fund their campaigns without Faust, without selling their soul and thereby alienating America. And in my view one way increasingly I think the only way is to embrace what I want to call citizen funded campaigns. Now what could that mean? First thing you have to accept is that the internet notwithstanding for a long time campaigns have to be funded, they're going to be expensive. So the question's funded by who? Citizens or noncitizens? So noncitizens like the Chinese or the French or whether or not corporations are persons? Nobody has ever suggested corporations are United States citizens. So when presented with this choice between citizens and noncitizens, most Americans say of course, citizens should be funding campaigns. But that just begs the question which citizens? Some citizens or all citizens? Because the current system for funding campaigns right now is a system where some citizens fund campaigns, that's a large dollar funded campaigns funded by the small percentage of Lester's, the point 26, the point 05, the point 01, funded by the tiniest slice of the 1 percent evoking this progressive era image as a fair description of the system we have allowed to evolve. So when I mean citizen funded campaigns I obviously don't mean that. But this leads people to the opposite extreme what we refer to as public funding of campaigns. Like the Presidential public funding system which is now bizarrely hated by most Americans. And I say bizarrely because it's weird to reflect upon the fact that since Richard Nixon for 32 years every single president except one has been elected using public funding as the means by which they fund their campaigns. The one was Barack Obama who when he did this we pleaded with him saying, this is the end of public funding for presidential elections. And he said no, no, no. I'll introduce a Bill and we'll get a better system before the next presidential election. So one, ends the system. And we should just remember the biggest beneficiary of the public funding system, Ronald Reagan, who ran three times using the public funding system. His first time of course against President Ford and the primary in 1976, three times and when he ran in 1984 what's the total number of fund raisers Ronald Reagan held? Zero fundraisers because he was running for president, why would he waste his time raising money at the same time he should be raising votes. Okay, but many people look at this system and say it's arbitrary, conservatives think there's something wrong with my money subsidizing your speech, Ronald Reagan apparently didn't think there was any problem with that. But most other conservatives raised this as a principle objection. And of course the system is become bloated and bureaucratic not evoking confidence or passion in anybody. So when I talk about citizen funded campaigns, I don't mean that either. Instead, fortunately for me I mean to this space in the middle, all citizens funding campaigns but funded through a system that's a kind of bottom up system of funding. So I'm talking about voluntary small dollar funded campaigns. Where candidates opt into a system where they except small contributions only but the system amplifies those contributions making it possible for them to run winning campaigns without ever taking large contributions from anybody. Now there are many versions of this. We don't remember this, we don't focus on it but I want to focus on it. There are many versions out there right now. There's a matching fund system which Arizona and Maine and Connecticut have where you give a small contribution and that contribution gets matched by the government 2 to 1, 3 to 1. In New York City it's a 6 to 1 match that people use to fund their campaigns. There a tax credit system like Oregon where you get to take a tax credit for small dollar contributions given to fund campaigns. Bruce Ackerman and Ian Ayres mapped out a system, a voucher system which I've tried to extend in my book, Republic Lost, to answer the objection that a system should not use my money to subsidize other people's speech. My voucher system I call the Grant and Franklin system. Okay so here's how the Grant and Franklin works. So we start with the assumption, stipulate with me, we could go into the numbers but it would be really boring, that everybody who's a voter in America contributes at least $50 in taxes to the federal treasury, contributes in quotes, I'm talking about taxes. But $50 from cigarette taxes or gasoline taxes or social security taxes or income taxes or payroll taxes, whatever, all of us send at least $50 to Washington. So the Grant and Franklin project says let's take the first $50 we all send in and rebate it in the form of a democracy voucher. And the candidate gets to take a voucher, we can give the candidate a voucher and they can take it if they agree to fund their campaigns with vouchers only plus with contributions limited to $100 per citizen. So $50 voucher Grant, $100 contribution Franklin. All right, now $50 a voter is 7 billion dollars. Seven billion dollars is about three times the total amount raised and spent in 2010. So this is real money but unlike the current Lesterland system that we have, this would be money that is representative coming from people across the political and income perspective kind of substituting a one person one vote for a one person one voucher idea. So you could have matching funds, you could have tax credit, you could have vouchers or you can actually get all three in one. One low price given to you by this man, John Sarbanes whose Bill that he's just introduced in congress called the Grassroots Democracy Act has each of these as a component with the voucher being a pilot project to support small dollar funded federal campaigns. So there are many versions here but my point is, that any of these versions would give us what I'm talking about as citizen funded campaigns. All citizens would be participating or at least much more than the point 05 percent who are relevant today and are participating. But it would come from the bottom up rather than the top down. And if we had this as the system, if we could imagine a congress the majority of which was elected as this as the system where they took small dollar contributions only, then we all could believe as we all desperately want to believe that whenever congress does something stupid, it's either because there are too many democrats or because there are too many republicans but not because of the money because we would have negated this essential presumption to how money corrupts in the system. Okay, so the question people then ask is is it possible to imagine congress enacting a change like this, the Sarbane's Bill or any of these other small dollar funded systems? And in the cold calculating moments that I have to approach this just as an academic, I have to conclude that it may indeed be impossible to imagine congress enacting a system like this. And what convinced me the most of this, about this was testimony from this man, Jim Cooper, democrat from Tennessee who's been in congress for as long as about 20 other members of congress. And he said in explaining congress to me he said, you've got to understand that Capitol Hill is a kind a farm league for K Street, K Street where the lobbyists work. What he meant is members and staffers and bureaucrats on Capitol Hill have an increasingly common business model. A business model focused on their life after government, their life as lobbyists. Public citizen calculated between 1998 and 2004, 50 percent of the senate left to become lobbyists, 42 percent of the house. And as United Republic calculated in April of this year, the average salary increase for members leaving to become lobbyists was 1,452 percent. So in a world where everyone depends upon this system surviving how could we ever imagine changing this system? And I think the key is to turn to this republican principle, republican principle buried in Federalist 52. And to begin to think of this as our own democratic civil right and to begin to demand that we build this republican principle and make it real in this constitutional republic again. And if we can, if we can do that I think it begins with a certain recognition. A recognition that evokes Henry David Thoreau's words in On Walden from 1846 when he wrote, there are 1,000 hacking at the branches of evil to 1 who was striking at the root. So call the 1 a root striker. And what a root striker sees is if you step back from the issues that we all think about and connect the dots, whether it's healthcare reform for people on the left or government bailouts for people on right, whether it's global warming for people on the left or complex tax system for people on the right, whether it's financial reform for people on the left or financial reform for people on the right, what we see is that there will be no sensible change in any of these areas until we change this corruption. This corruption caused by the gap that we have allowed to evolve between the funders and the people. We need a practice that would mind that gap, that would mend that gap if we're going to end that corruption. When Franklin was carried from the constitutional convention in September of 1787 he was stopped by a woman in the streets of Philadelphia and asked Mr. Franklin, what have you wrought? Franklin responded, a republic Madame. If you can keep it a republic, a representative democracy, a democracy dependent upon the people alone, we have lost that republic. And all of us have to act to get it back. Thank you very much. ^M00:55:00 [ applause ] ^M00:55:16 So I'm eager for this organized question system you've got.
>> Yes we do have a few questions.
>> My name is Lydia Austin, I'm a senior in the undergraduate program here at the Ford School. Thank you once again Professor Lessig for your presentation. And our first question is, the era, this era of politics is reminiscent of so called gilded age and the grip railroad coal and other corporations had on the political systems of that time. What if any lessons do we think we can take from the gilded age and its aftermath?
>> Yeah, so, so I think it's worse than the gilded age and it'll be harder to solve. Because the gilded age was good old fashion corruption, you know, bribery. And the thing about good old fashion corruption is that there is shame associated with it. You can't do too much. You can't be too much in the open. I mean, some places you can be completely in the open, some places were completely taken over, Montana for example taken over by that kind of corruption. But [inaudible] it's understated. And it's about benefiting financially directly the congress people and there's just a limit to how much they can be directly financially benefited. Our system has no shame because it's not illegal. It's perfectly legal. It's in plain sight. People are proud of it. So in my book I quote from, a fantastic book, So Damn Much Money, by Robert Kaiser, and Kaiser recounts a story from Senator John Stennis who in 1982 was the head of the armed services committee. You know, Stennis is southern, he was no choir boy but Stennis is asked by one of his colleagues to hold a fundraiser with defense contractors, head of the armed service committee, fundraiser for defense contractors, seems like an obvious thing to us. But Stennis says, would that be appropriate? I have life and death over these people, I don't think it's appropriate for me to try to raise money from them. [Inaudible] now that is literally incomprehensible statement to be uttered by a committee chairperson today because committee chairpersons today, committee chairmanships are auctions to the highest person who can raise money for it and nobody feels guilty about it, nobody feels embarrassed by it, that's just the system. So it is open notorious, everybody is proud of how successful they are inside of the system and it's also harder to rally people against it because there's no obvious criminal behavior going on. It's just the way the system works. So I think it's worse and it's harder to fight and I think that is the nature of the problem we face.
>> Thank you. The next question is with regard to the Citizens United ruling. First if you have any thoughts about the future of Citizens United and how likely it is to be overturned or modified. But secondly the Supreme Court Justices themselves are not elected, they don't run for office. So are they kind of in, are they privy to campaign finance corruption or kind of what role do they play in this?
>> Yeah, so I think that Supreme Court is a useful institution to think about with respect to this question of institutional confidence. Because though I think they've demonstrated too much political influence, nobody credible can think that they're suffering from the kind of money influence that I'm talking about here. So when they make bad decisions, they make them just because they're wrong or they're politically sensitive, but not because they're corrupt in the sense that I'm talking about. So it might be political corruption, it's not financial corruption number one. Number two, yeah I only indirectly mentioned Citizens United because I think that this reform movement is too obsessed with Citizens United and too obsessed with the presidency. So success of Citizens United in a way that makes it sound like Citizens United broke our democracy but here's the fact. On January 20, 2010, the day before Citizens United was decided our democracy was already broken, right. Citizens United may have shocked the body but the body was already cold, right, so it's not as if going back to the days before Citizens United would somehow recover our republic because even then, 2010, the Lester's were still the dominant force in the context of our election. So I think we've got to think about a reform that's more fundamental than reversing Citizens United. I also don't think Citizens United is long for this world where at least the way it's understood. People understand Citizens United to stand for the principle that there's nothing congress can do to limit the influence of independent expenditures on our campaigns. I don't think that's what it's held. Now I'm literally the only Law Professor who believes this so it's likely wrong. But I believe the Supreme Court has left itself open to, for example, uphold a statute like one representative Dingell has introduced. Dingell has introduced a Bill that would, that says you can only give contributions of $5,000 up to $5,000 to an independent political action committee. And I think that statute is defensible under the theory of dependence corruption that I have advanced here, right. It's not defensible under quid pro quo corruption, the sort of corruption that the court is obsessed about, but it is defensible under dependence corruption because the independent political action committees are a perfect instance of the Lesterland dynamic that I'm talking about. And Lesterland is dependent corruption at large. So I think they could uphold it. I think they would uphold it because I think at least Justice Kennedy is sensitive to the harm that this decision has done. And so I don't want a movement that's focused on just reversing that when there's so much more to do if in fact we're going to have any effect here.
>> This next question is what role does the two party system play in the financial exploitation of our democracy and has the polarization of these parties and ideas been a boom to corporate lobbying and campaign finance?
>> Yeah, so the striking thing about polarization in American politics is it's inconsistently polarized, right. We don't have an ideological left and an ideological right. On some issues we have a very strong ideological left and ideological right. But on other issues both parties are basically the same. So when it comes to financial reform or when it comes to Wall Street regulation for all the 1990s and 2000s, there's no difference, real difference between the republicans and democrats, they're the same party. But when it comes to social issues there's a very big difference between republicans and democrats. And that pattern of polarization and non-polarization correlates with the best strategy for raising tons of money inside of the political system. Because in a world with safe seats, the best way to raise money is to be as extreme as you possibly can. So if you're in a democratic safe seat you want to be as far to the left as you can. If you're in a republican safe seat you want to be as far to the right as you can because the only threat you have is from primary challenges and the only way to rally the base is to be extreme in the way the base gets excited by. So my view is, the way we fund elections right now exacerbates the problem of polarization. Obviously polarization is driven by lots of factors but I think it exacerbates the factors. And it makes it easier for us to produce a world where relatively small percentage of us want to participate in the political system because the rest of us think the people participating are just crazy because of their extremism.
>> As a brief follow up to that question, do you think there are any political changes that we could make that would at least somewhat remedy this system that don't have to do with campaign finance, having open primaries for example?
>> So I'm a root striker. I'm inpatient with other efforts to reform the system that don't strike at that root. You know, it's like you recognize Uncle Sam as an alcoholic. He needs an intervention. I understand the easy thing is to say well maybe we should just lock up the Vodka or maybe we should just have somebody with him to make sure he doesn't do it. And my answer's no, we've got to get him to deal with the dependency here. So I think that there are other changes that would be great. I don't think this is the only problem our democracy has. But I think this problem if we solved it would be generative. We could begin to think of other issues and address them more sensibly if we thought, if we addressed this one sensibly first.
>> Speaking of root strikers, people are curious as to how we can actually participate this, in this in our everyday lives? What does it mean as a day to day citizen, how can we get involved?
>> Okay, ask the next question and I'm going to answer that question on the screen without even having to say anything about it, okay. So you can go next and I will pull something up. You can ask the next question right now.
>> Next question is what effect will if any will a mandatory voting law have on our political participation and if any effect on campaign spending?
>> Yeah, so I, I'm increasingly convinced that a mandatory voting law could do a lot of good. And the reason for that is, you know, as political scientists have remarked for a long time, we actually don't have a deeply polarized nation. We have a deeply polarized political class. People are active politically are polarized. The rest of America's not polarized. And so what the rest of America does is look at the polarized politically active class and gets turned off by it and doesn't want to participate in it. But the politically active polarized class drives fundraising and drives voting. Well if you begin to mandate the people vote, if you brought more people into the political system, it might be harder for candidates to speak to the politically polarized active class so they have to speak more into the middle of, into the middle of America. So that might be another reform that would make it easier to dampen down the polarization. But again, that has to happen after this first reform.
>> I think that concludes the question. You jumped ahead of me so I was unable to say that was our last question. But thank you so much again for your presentation and representing how we can get involved. We really appreciate it.
>> Great, thank you very much for the time. ^M01:06:13 [ Applause ] ^M01:06:23
>> Well thank you very much for an extremely engaging as well as important and timely presentation. After we are finished I invite everyone to join us in the Great Hall for a reception. Courtesy of Nicolette Books [assumed spelling] we also have copies of Professor Lessig's most recent book and there will be a signing. And so I hope that you will stay and join us to continue the conversation and perhaps talk about things that can be done in different context. So again, thank you very much for joining us whether here or online. Please join me in a final thank you to Professor Lessig.
>> Great, thank you. ^M01:07:00 [ Applause ] ^M01:07:06