When Special Interests Ate The Constitution

W. James Antle III Managing Editor
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Every conservative worth his salt has a theory of when the American Republic went to hell. The Weekly Standard’s Jay Cost is no exception.

Some conservatives grouse about this like the angry old man at the end of the bar. Instead Cost has written “A Republic No More: Big Government and the Rise of American Political Corruption,” a valuable book about how political corruption has become an integral feature of our overgrown government.

Cost spoke with The Daily Caller about his findings.

Everybody associates corruption with easily identifiable scandals, like Watergate and Abscam, or improprieties by individual politicians, like the Michael Grimm saga. You are writing about something more systematic. What do you mean?

Law-breaking is certainly a part of corruption, but I think that is a very narrow slice of it. I define corruption similar to the way James Madison described factionalism in Federalist #10 — government using public resources to favor groups with interests “adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.”

This definition includes law-breaking, but it also opens us up to a wider range of practices — all of which undermine the republican quality of our regime. A republic above all strives to use public resources for the public interest. Corruption happens when those resources are used for private purposes against the common good.

From this perspective, corruption becomes less about good guys versus bad guys, and more about: are the rules of the political game written properly, to encourage public-spirited policy?

You note that the Constitution was written to constrain both corruption and the federal government, yet you note there was corruption and unconstitutional overreach from the beginning of the Republic. Did the Constitution fail?

The Constitution was essentially a political compromise. James Madison wanted a more vigorous national government, and Alexander Hamilton wanted something even stronger — akin to a monarchical system. But those were unfeasible, given the political constraints of the day. The Constitution was the most centralized system that could have been produced, given the nature of the divide in 1787-89.

So, to claim that the Constitution “failed” is a bit unfair. It was not meant to be an instrument of government for all time. There is, after all, an amending process. And while we may view it as a high bar to clear, it roughly parallels the hurdles required to get the Constitution ratified in the first place.

I do think that the power originally vested in the national government — as understood by the delegates at the Convention and, more importantly, as sold to the delegates at the Virginia ratifying convention (which really was the make-or-break test) — was insufficient to deal with the problems the government initially faced, especially regarding the public credit. I think the Federalists compromised too much away to the Anti-Federalists. But to me, that is just politics. You make the best deal you can make in the first instance, then try to improve the deal in the second instance.

The “failure” comes in what they did in the second instance. They did not use the amending process to expand federal power. This approach would have required a difficult conversation about how and when that power should be exercised, as well as whether the existing institutions could exercise that power responsibly or whether they needed updating as well.

They just seized the power, through liberal interpretations of various clauses in the Constitution. That was the politically convenient tact, but it unbalanced the constitutional regime. The Constitution carefully blended institutional design with power distribution. If you modify one, you need to think carefully about whether you should modify the other.

And when politicians seize new federal powers, they tend to do so in an ad hoc manner, without due consideration for whether the existing institutions can handle the new power carefully.

This, I think, is how we get corruption — it comes from institutions that are simply incapable of exercising their power responsibly. Per Madison, responsibility requires a proper institutional design. And growing government without that tough conversation about how to do it right often means the government ends up behaving irresponsibly.

Is this all Alexander Hamilton’s fault?

No. Hamilton was a brilliant man. Arguably, he was the only one to see clearly the severe challenges the new nation faced, and undoubtedly the only one who put together a plan to deal with the problem. His three reports — Report on Public Credit, Report on a National Bank, and Report on Manfactures — more or less set the political-economic debate for the next century. And the spirit of the three reports — the promulgation of a disinterested, rational, pro-growth economic policy — remains foundational in our system.

That being said, I do believe Hamilton erred in believing that the government as designed could accomplish the tasks he set forth in his reports — even if he correctly argued that those tasks were essential. So, what ends up happening is high-toned Hamiltonianism is slowly transformed by our system into grubby pay-to-play.

The Second Bank of the United States is crooked, venal, and counterproductive for its first ten years in effect. Fannie Mae and Freddie Mac, which have a lot of parallels to Hamilton’s Bank, somehow manage to be worse. Protective tariffs, which he advocated in his Report on Manufactures, become a way to pay off the Gilded Age Trusts at the expense of poor farmers in the South and West.

More generally, Hamilton’s desire for the government to capture the interests of the well-to-do — tying their own personal fortune to the success of the government — becomes a double-edged sword. The government captures them, but they also capture the government. As Madison put it, they became the “pretorian band of the government, at once its tool and its tyrant; bribed by its largesses, and overawing it by clamours and combinations.”

It is not that his policies inevitably would have produced such ill-effects, it is that his policies as implemented by our system of government. So, in that regard he erred. But then so also did many others.

Did the Gilded Age ever really end?

In certain ways, it did. The political machines that dominated society in the late 19th century are gone. And so are the Trusts. But something important, and bad, from that regime remains.

During the Gilded Age, politicians struck upon a way to finance political campaigns — a terrible way that remains entrenched to this day. It basically boils down to the idea that private factions — be they business, labor, farmers, whatever — that have an interest in some public policy should contribute to political campaigns, so as to ensure that the end result of policy is good for them.Matt Quay — the boss of the Pennsylvania machine and arguably the best Gilded Age pol — called this “frying the fat.” That is still what is done today.

Now, this has obviously existed to some extent in all representative democracies. But the prior system — the spoils system — financed campaigns differently. The parties just raided the Treasury to pay for their campaigns after the fact. The winning party got to staff the whole government with their loyalists.

That was outlawed in the 1880s, which is when politicians start turning to business very aggressively. And in so doing, they institutionalized a conflict of interest: politicians accept campaign contributions, and various other subsidies, from the interests over whom they have legislative oversight. This continues to the present day.

W. James Antle III is managing editor of The Daily Caller and author of the book Devouring Freedom: Can Big Government Ever Be Stopped? Follow him on Twitter.