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Factions in Madison’s System: Theory and Reality

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In 2007 the presidential candidate Barack Obama pledged that his campaign would not accept lobbyist donations, going so far as to return more than $50,000 of contributions from known registered federal lobbyists. Then in January 2009 the freshly sworn-in President Obama reiterated his commitment to lobbying reform by issuing an executive order forbidding members of his administration from lobbying while in office. Finally in 2012 the reelection-seeking President Obama softened his anti-lobbyist stance and backed unlimited contributions to his super PAC – a move that, according to Fredreka Schouten of USA Today, would “open[] the door to donations by lobbyists to support [Obama’s] re-election.” (In fact, Priorities USA Action, an Obama-supporting super PAC, raised more than $64 million from lobbyists and others during the 2012 campaign.).

Surprisingly, popular reactions to Mr. Obama’s supposed flip-flop on his no-lobbyist pledge were mute. Perhaps this is because Americans had come to accept, resignedly, that their constitutional government was in some way intended to make strange bedfellows of politicians and lobbyists.

Such relationship is not always productive because it encourages misallocation of finite resource to rent-seeking activities that would add little or no value to the economy. Although James Madison believed that the frequent collision of self-interests in a faction-ridden republic was necessary to prevent power from being concentrated in any one person or group, surely he did not intend for the constitutional system he so ardently championed to be hijacked for the benefit of the few and at the expense of the many.

In The Federalist Madison located economic self-interest at the center of factional politics. For him, “the most common and most durable source of factions has been the verious [sic] and unequal distribution of property” (Federalist 10). Such factions are destructive and constructive to the civil society in which they are expected to flourish—destructive because factions are “adverse to…the permanent and aggregate self-interests of the community”, constructive because factions represent “so many parts, interests and classes of citizens that the rights of individuals, or of the minority, will be in little danger from interested combinations of the majority” (Federalist 51).

The genius of Madison lay in the paradox of his argument: because self-interest was the problem, it was also the solution. In the Madisonian worldview, self-interest produces representation, and representation generates factional conflict in institutions, ensuring that the power to make mischief or to oppress is regulated, checked and dispersed.
Unfortunately, the theory that Madison developed in Federalist 10 and expounded in Federalist 51 assumed that organized factions were equal in resource. But as pointed out by the economist Gary Becker, benefits are rarely distributed equally to different interest groups. Some interests gain more than others because they are better financed, more organized, and less susceptible to free riding. George Stigler, another American economist, made a similar argument: government regulations conferred benefits to groups who were “prepared to pay with the two things a party need[ed]: votes and resources.”

It appears, then, that Madison’s theory on protecting minority interests is seriously undermined when resource bias has come to figure so prominently in today’s political process.

An example will suffice. In 2012 the country experienced two of the worst mass shootings in its history – the first occurred in July at a community theatre in Aurora, Colorado; the second in December at Sandy Hook Elementary School in Newtown, Connecticut. In all 38 people were killed, 20 of whom were children.

According to the 2013 NBC/WSJ poll, 55% of Americans favored stricter gun control. Despite this, gun control legislations stalled in Congress at the same time that NRA lobbyists were raising a record $2.7 million to fight new gun laws.

This is indeed very telling. When more than half of the country could not have their interest represented the same way that the NRA’s interest was represented in Congress, Madison’s theory is in deep trouble.

Strangely, lobbyists and politicians do make intimate bedfellows. Mr. Obama’s about-face on lobbying reform in 2012 illustrates this point. In arguing that the “mischiefs of faction” could be overcome when “[a]mbition [was]…made to counteract ambition,” Madison failed to anticipate the problem of resource bias in political representation. Though sound in theory, Madison’s system is, in the final analysis, untenable in practice.

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