In Defense of Lobbying

Good post from the Spectator’s Alex Massie:

"If it’s easy to pick on politicians, it’s easier still to pick on lobbyists. This is true on either side of the Atlantic. As Peter says, today’s allegations in the Sunday Times that Labour peers are trading cash for legislative amendments are unlikely to increase the esteem in which parliament is held. While members of the House of Lords are first in the firing line, I suspect we’ll also probably hear calls for a further clampdown on lobbying. All, of course, in the name of removing temptation from what Guido Fawkes calls our “parliament of whores”.

In the United States, Barack Obama spent most of last year railing against the perceived corruption of the political process by “lobbyists” and “special interests” and pledged to have nothing to do with such rogues in his administration. Except, of course, for when he wants to appoint a lobbyist or two to key positions. Cue accusations of hypocrisy and all the rest of it.

But 'twas ever thus and, more importantly, it needs to be thus. The ancient Athenians insisted upon the right of third parties to petition the state; Magna Carta similarly granted the nobility permission to lobby the Crown.

Lobbying is not the problem. Nor for that matter are the “special interests”. In the first place this hackneyed phrase applies to the people and organisations to whom legislation is going to apply, so of course they have a right to make their interests known and to lobby parliamentarians. Indeed, in the US, the right to petition the government is enshrined in the First Amendment, just like freedom of speech and association. Secondly, of course, there’s a double standard: Big Tobacco is a filthy special interest; the anti-smoking campaigners, lavishly funded themselves, are merely trying to improve everyone’s life…

I suppose I should say at this point that some of my best friends are lobbyists. The problem is not lobbying, it is the size and complexity of government. As a former Democratic lobbyist put it to me, "If you want to reduce the number of lobbyists, reduce the size of government. Or simplify it. Imagine how many lobbyists a flat tax would put out of business! Thousands of

lobbyists exist solely to promote, keep, or expand a tax break that only adds three more pages to an already incomprehensible tax code. Blaming the lobbyists for what’s wrong with Washington is like blaming the spoon for obesity."

Or, as another lobbyist on K St says: “If lobbyists have outsized influence its only because Members of Congress aren’t doing their jobs. If a member knew the facts, did their homework, met with constituents in the industry/academy/activity they shouldn’t be so easily influenced. The question shouldn’t be why do special interests have so much influence, but rather why are members of Congress so easily persuaded?”

Quite so. The problem is not the lobbying, it’s the complexity of regulation that makes it so advantageous to lobby in the first place.The more regulation - that is, interference in the market place - the more lobbying there will be since the rewards for shifting regulations in your favour so vastly outweigh the cost of maintaining a permanent presence in Washington or at Westminster.

So, to repeat, the lobbyists are not the bad guys. The bad guys are the ones we elect and, in another sense, ourselves too since we like to pretend that there was once a golden age in which parliamentarians were sturdily independent souls whose favour could never be bought or traded. There never was such a golden age, no matter how much the newspapers might try and persuade us that we inhabit some uniquely fallen age. The reverse is more probably true and, in fact, one could even argue that the remarkable feature of our politics is how honest most parliamentarians are, not how corrupt some of them may be.

Disgusted by lobbying and the purchasing of legislative advantage? Well, vote for smaller, simpler, leaner government. But don’t blame lobbyists or corporations who look after their own interests no more keenly or disreputably than parents guard the interests of their own children."

By building a $100 million trolley, the company stands to make several millions of dollars in profit. So it makes sense for the lobbyists to spend immense amounts of money?hundreds of thousands of dollars, at least?to help you convince your fellow legislators to appropriate money for the trolley. Contrary to popular imagination, very little of this money will actually be spent on direct bribes. Most will go to expensive environmental impact studies, site visits for Congressional staffers, and for the activities of the lobbyists themselves, who must be paid to spend an immense amount of time with Congressmen who are reluctant to sign on to the trolley project.

Now, let us go back to the peasants. There are 300 million of them, but the reality is that the poorest half, 150 million, do not actually pay any net federal taxes (and hence have no immediate material interest in fighting the trolley project). To keep the math easy, let us assume that the cost is split equally between 150 million taxpaying Americans. So the cost of the trolley is two dollars per taxpayer. If you gave each of those taxpayers a choice between keeping the two dollars and paying for a wasteful trolley, a large majority would opt to keep the two dollars. But no taxpayer ever gets that choice. The money is already gone, and there is no chance for a refund.

The best the taxpaying peasant could hope for would be to somehow lobby Congress to not spend the two dollars on the trolley, and to ask for a tax cut the following year. But it takes time to research the issues, compose letters to the relevant Congressmen, and send them off (this last part has been made quicker thanks to email). But even a very smart peasant would take an hour to complete the process. Meanwhile, that peasant taxpayer is probably making at least twenty dollars an hour at his job. So, do the math. The peasant spends one hour of his time (worth twenty dollars) in order to have a tiny chance of saving himself two dollars. It does not make any sense. If he does his research and writes his letter during working hours, he is wasting his employer?s money and risks being fired. If he does his lobbying after hours, he is wasting time that he could be working in hopes of getting a raise, or resting so as to be more productive during his working hours.

In short, I agree- either you keep government small or you are overrun by special interest.