Campaign Finance

Complexity Without Conspiracy: Politics Harder to Produce Than a Pencil

Get in the weeds, not the sensationalism


What's more difficult to make: a pencil, or a political campaign?

In the classic 1958 essay "I, Pencil," Leonard Read makes the provocative claim that nobody in the world knows how to make a standard #2 pencil. At first this seems impossible, but as Read outlines the process, it becomes more and more believable. Here's a small sample:

"My family tree begins with what in fact is a tree, a cedar of straight grain that grows in Northern California and Oregon. Now contemplate all the saws and trucks and rope and the countless other gear used in harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into their fabrication: the mining of ore, the making of steel and its refinement into saws, axes, motors; the growing of hemp and bringing it through all the stages to heavy and strong rope; the logging camps with their beds and mess halls, the cookery and the raising of all the foods. Why, untold thousands of persons had a hand in every cup of coffee the loggers drink!"

By the time Read goes through the shipping and millwork of the wood, the metal end of the pencil, the graphite core, and the eraser, millions of people all around the globe are involved in the creation of just one pencil. This is incredible, and not just because it's astounding that an object as simple as a pencil requires labor and resources from millions of people all over the planet. Even more impressive is that all of this activity is coordinated to useful ends without anyone being in charge. We don't have to fret over shortages or surpluses even though no one is responsible for ensuring the right quantity is produced.

The point Read illustrates – that production is a complicated, decentralized, and global process – is one many activists and reporters apparently haven't learned, judging from this year's trend of articles "exposing" groups working together towards common policy goals. See, for example, "Inside the Vast Liberal Conspiracy" at Politico, "A National Strategy Funds State Political Monopolies" in the New York Times, or "Koch-backed political network, built to shield donors, raised $400 million in 2012 elections" in the Washington Post, all of which present cooperation between groups and their contributors as evidence of elaborate conspiracies masterminded by shadowy megadonors like the Koch brothers (David Koch sits on the Board of the Reason Foundation) on the Right and George Soros on the Left.

If only these reporters read "I, Pencil," they would understand that high levels of coordination are possible without a conspiracy. Instead, they fall in the trap of "following the money," without considering the context. A list of contributors is easy to find, but if all you do to understand an organization is identify the richest donor in the room, you won't understand much at all. Advocacy groups and the relationships between them develop through countless, repeated interactions of people with varying interests, abilities, resources, and priorities. The grey reality of political relationships can't be mapped onto the black-and-white, paper-thin (or thick, as it may be) world of campaign finance disclosure.

The limited insight into political relationships offered by disclosure information may do as much harm as good. After all, where you look determines what you see. The public overestimates the role of money in politics compared to scholarly research, "horse race" media coverage of polling and fundraising is elevated above coverage of candidates' policy views, and the perception perpetuated by some in the media and others who wish to further regulate political speech that votes are for sale is widespread.

Citizens generally do not consult disclosure information on their own, allowing activists to spin the contents of reports. Much, if not most, of the spin and reporting purports to show links between donations and votes on legislation. Yet scholarly research suggests those types of exchanges are exceedingly rare. In a review (PDF) of over forty scholarly articles examining the relationship between PAC contributions and congressional voting behavior, university professors Stephen Ansolabehere, John de Figueiredo, and James Snyder, Jr. concluded "[i]n three out of four instances, campaign contributions had no statistically significant effects on legislation or had the wrong sign (suggesting that more contributions lead to less support)."

If votes on legislation could be bought, there would be a lot more money in politics. Consider that in 2012, Americans spent $17.6 billion on Valentine's Day (according to the National Retail Federation), $37.34 billion on gambling (according to the American Gaming Association), and $99 billion on beer (according to the Brewers Association). Compare that to the 2012 election cycle, in which just $7.3 billion was spent on all federal elections over two years, including the presidential election, according to the Federal Election Commission. Add in the fact that the Investor Responsibility Research Center Institute (IRRC) reported in 2011 that one third of S&P 500 companies do not even have a PAC, and it becomes clear that most money in politics is contributed to support candidates that donors agree with – not to buy favors.

In the hands of activists who place a surprising number of news stories, however, the theme of the 2012 elections was that it was "the most expensive election in history." Press releases and reporting get away with this because few people have the time or inclination to examine the scholarly research themselves, and our cynicism makes it easy to believe salacious stories of deep-pocketed donors bending the political process to their liking from smoke-filled back rooms.

With "I, Pencil" in mind, however, we can begin to break out of this reflexive mindset, and acknowledge the existence of complexity without conspiracy. Of course there are many organizations working on the same issue. Of course there are ties across organizations. Of course there are factors outside your district or state affecting your local politics. After all, in a world where pencil production is a global endeavor, it's silly to expect politics to always be locally grown. Your politics, like your dinner, your religion, and your work, is influenced by people all over the world, transcending the lines that governments draw on maps.

This should not be cause for alarm. Like any competitive enterprise, if customers aren't happy—voters, in this case—change won't be far behind. Unfortunately, campaign finance laws restrict the ability of groups and candidates to organize and speak with voters. As a result, the competition we want is stifled and, sure enough, incumbents in Congress and elsewhere win re-election in droves.

Reading "I, Pencil" can perform for us what Friedrich Hayek famously described as the "curious task" of economics: demonstrating "how little we really know about what we imagine we can design." The campaign finance debate too often devolves into silly sloganeering and utopian rhetoric, from "reclaim democracy!" to "We the People, not We the corporations!" to #GetMoneyOut. It's a discourse in sore need of perspective, and there are not many better remedies for that than "I, Pencil."


NEXT: Did the Surgeon Leave His Scissors in Your Belly? The Feds Will Help Keep It Under Wraps.

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  1. Politicians, “Activists” (who are politicians who haven’t been elected), etc. who want to push one form of “Campaign Finance Reform” or another fairly transparently want to silence their opponents, while retaining their own funding. This is always going to be the case, or at least it should be the case we assume; a system should not be designed that will not work with (or at least in spite of) human flaws.

    The only real Campaign Finance Reform would be to void all limitations on donations, coupled with a demand for transparency. And a politician who violates the transparency provisions should be disqualified.

    1. The only real reform would not occur in a vacuum, but would involve changing entirely how elections are done to make it like jury duty. Choose the electorate by lot (no voir dire), put them and the candidates in a room with a temporary m.c. (they could elect another if they wish), and emerge with a victor when they decide to. Candidates would be disqualified if they announced their candidacy publicly in advance of the meeting.

      1. No, as long as government requires a coercive monopoly to function, there will be corruption to work around it and expansion to stifle competition. You cannot create honest politicians as long as you have a coercive monopolistic government.

    2. You betray yourself with that “coupled with a demand for transparency”, like all statists of whatever degree. As soon as you make something the government’s business, it will be warped out of recognition and expanded without limit.

      Transparency requires intrusive record keeping and lack of privacy, and penalties for non-compliance. Not only are my political donations, or donations of any kind, no one’s business, but it doesn’t take much imagination to see how that would morph into good and bad donations, limits, and nanny state nonsense.

  2. I wish that I were a pencil.

  3. $99 billion on beer (according to the Brewers Association). Compare that to the 2012 election cycle, in which just $7.3 billion was spent on all federal elections over two years, including the presidential election, according to the Federal Election Commission.

    Who says the American people are stupid? Sounds to me like we have our priorities straight.

    1. How much of the 99 billion was due to the results of the 7.3 billion I wonder..

  4. “If votes on legislation could be bought, there would be a lot more money in politics. ”

    LOL. i stopped reading at this sentence. It is not April 1st so i must assume this blogger is serious. How naive and clueless can one be?

    1. You seem to be a good standard that probably won’t be easily surpassed, so please do tell us, how naive and clueless can one be?

      1. i supposed all the “campaign contributions” are done with no strings attached? Right…I have some beach front property in Wyoming i am selling. Something tells me you will be very interested in it.

        1. It’s “ocean-front” property. There actually is beach-front property in Wyoming…

    2. If bribe contracts were legally enforceable, don’t you think there’d be a lot more spent?

    3. Most corruption occurs in writing legislation, adding amednments, etc, not out-and-out vote selling.

  5. where you look determines what you see.

    That’s the limiting factor is sooooo many things in the world these days. There’s so much information that people wind up evaluating things on the basis of a tiny fraction of it all, and make unwarranted assumptions about what they don’t see. And nobody has time to examine everything about anything except what they’re career experts on, so they leave the rest to sources they trust, and they decide which sources to trust on the basis of other sources they trust, and…it’s trust all the way down. And you don’t necessarily gain trust by being accurate.

    1. You may be right, but also the vast amount of information could be preferable to the past. Young people would never know who Milton Friedman (for example) is if this media market were even like the 90’s. They would have to wait for some executive to show a replay of his debates on TV, or someone to mention him so they might inquire at a library. Today his debates are available on YouTube. Certainly this is preferable to the alternative even though just as many Krugmans are available at the fingertips also.

  6. “[i]n three out of four instances, campaign contributions had no statistically significant effects on legislation or had the wrong sign”

    I agree with the general principle being argued here, but just to be a pain, 25% is not “exceedingly rare.”

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