Happiness – Part 2

I had intended to do a detailed follow-up to my earlier post about happiness research.  However, I think the reasons for my scepticism of the work by Derek Bok and others have already been expressed far more cogently by Steven Landsberg, Will Wilkinson, and Richard Epstein.

Recall that Bok thinks there is a troubling disconnect between the following facts: (1) society has grown much more prosperous in the past three decades but (2) self-reported levels of happiness have remained largely constant during the same period.  Bok asks, “what is the point of working such long hours and risking environmental disaster in order to keep on doubling and redoubling our Gross Domestic Product?”  In my earlier post, I suggested that subjectively reported happiness seemed to be a thin basis on which to make recommendations about public policy settings, let alone radically reshaping public policy.

Landsburg points out a flaw in Bok’s approach, which I find reasonably compelling:

Wait a minute, now. Self-reported happiness has been flat for fifty years despite rising incomes. Self-reported happiness has also been flat for fifty years despite dramatic increases in leisure and environmental quality. (Since 1965, the average American has gained about six hours a week of leisure—the equivalent of seven vacation weeks a year.)  So why aren’t Bok and Kolbert asking why we bother to come home from the office, take vacations, and clean our air and water?

Will Wilkinson piles on:

Landsburg asks an excellent question. Income inequality has skyrocketed, but that hasn’t made Americans less happy. So why care?

I essentially agree with Wilkinson’s conclusion: 

The fact of stable U.S. levels of self-reported happiness is an ideological Rorschach test; the way it is used tells you more about the person using it than anything else.

Anyway, the answer to Bok’s question is pretty easy. There are many, many other benefits of economic growth.

Finally, there is a very good discussion between Richard Epstein and Russ Roberts, which you can download here.  Epstein discusses some of the false assumptions of the happiness researchers and argues convincingly that envy is a terrible motivation for public policy.

If you’re happy and you know it, clap your hands

Under the heading “Too much wealth can make us worse off: study”, the New Zealand Herald reported on Monday about an article published by two Canadian academics:

Using mathematical modelling, the economists advance the theory that once a country reaches a reasonable standard of living there is little further benefit to be had from increasing the wealth of its population. Indeed, it could make people feel worse off. They believe their work shows that as a nation becomes wealthier, consumption shifts increasingly to buying status symbols with no intrinsic value – such as lavish jewellery, designer clothes and luxury cars.

This month’s New Yorker magazine reviews three books on the same subject, asking “What can policymakers learn from happiness research?”

I’m a little sceptical of the research and very sceptical of some of the authors’ policy prescriptions. Given the scope of the topic, I plan to break my comments into at least a couple of posts.  (I also acknowledge that I have not read the books, though I’ve looked at a couple of the publicly available working papers discussed below).

Here’s the New Yorker’s description of Professor Bok’s book, The Politics of Happiness: What Government Can Learn from the New Research on Well-Being:

Bok, who served two stints as president of Harvard, begins with a discussion of prosperity and its discontents. Over the past three and a half decades, real per-capita income in the United States has risen from just over seventeen thousand dollars to almost twenty-seven thousand dollars. During that same period, the average new home in the U.S. grew in size by almost fifty per cent; the number of cars in the country increased by more than a hundred and twenty million; the proportion of families owning personal computers rose from zero to seventy per cent; and so on.

The New Yorker continues:

Yet, since the early seventies, the percentage of Americans who describe themselves as either “very happy” or “pretty happy” has remained virtually unchanged. Indeed, the average level of self-reported happiness, or “subjective well-being,” appears to have been flat going all the way back to the nineteen-fifties, when real per-capita income was less than half what it is today.

The New Yorker reports that, for Bok, this consistency in the level of self-reported happiness raises a profound critique of economic growth:

To suggest that the U.S. abandon economic growth as a policy goal is a fairly far-reaching proposal. Bok concedes as much—“The implications of this critique are profound”—but he insists that all he’s doing is attending to the data.

The two economists whose work is reported by the New Zealand Herald share a similar consternation about economic growth:

Nevertheless, Professor Eaton and Professor Eswaran […] do not believe the developed world’s obsession with wealth shows any signs of abating. They predict that “it is likely that conspicuous consumption will become worse as time progresses”.

I find the basic approach of Professors Bok, Eaton, and Eswaran misguided for at least four reasons.

First, subjectively reported happiness seems to me a thin basis on which to make recommendations about public policy settings.  Bok apparently regards the fact that the percentage of people who say that they are “pretty happy” is largely unchanged over the decades as a rationale for radically reshaping public policy.  I would tend to regard it as a feature of asking people to categorise their levels of “happiness”.  (Try this at home: are you “pretty happy” at the moment and were you “pretty happy” three years ago?)

Second, as John Stuart Mill wrote in Utilitarianism, it is “better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied.”  Mill’s point was not to dismiss the pursuit of happiness.  Quite to the contrary, he was explaining that happiness and the pursuit of the good life is a broader concept than mere contentment; it extends to a sense of dignity and accomplishment.  I wonder if some of the recent “happiness research” — which focuses on the avoidance of rivalry or dissatisfaction — fails to appreciate Mill’s insight.  For example, Oliver James’ book Affluenza makes the goofy suggestion of “a total ban … on the use of exceptionally attractive models in all forms of advertisement, closely policed by the Advertising Standards Authority” and Professor Lord Richard Layard of LSE has suggested that work should be taxed as a form of “pollution” on the basis that the increase in one employee’s income causes other people to be jealous and therefore unhappy.  It is not clear what to make of the type of contentment that requires an adult to be coddled from the sight of an attractive person.  However, as Mill explained in On Liberty, such a narrow, illiberal approach to life (i.e., alleviating people from the need for firmness, maturity, and toleration of other people’s choices) would be prejudicial to their development as individuals, rendering their character “inert and torpid”.

Third, there is good reason to doubt theories about what people should want that differ markedly from what people actually do.  Most people work hard to improve their lives and the lives of people they care about.  People respond to financial incentives because they want to use the money to pursue their own goals (which may mean a better car, a larger house, a more secure retirement, the opportunity to travel, or providing for their children, collecting art, and so on).  It seems dubious to second guess those revealed preferences on the basis of limited survey data about whether people say they are “happier.”

Fourth, the anti-growth policy conclusions drawn by the authors seem deeply misguided.  A prosperous and free society creates opportunities for people to follow their own idea of the good life.  However, Bok says that, ““People do not always know what will give them lasting satisfaction.”  The New Yorker continues:

Bok, for his part, argues that lawmakers should act on the findings of happiness research, even when doing so goes against the wishes of their constituents. “Most voters would probably prefer to be happy rather than have their representative mechanically accept their mistaken impressions of how to reach this goal,” he writes.

OK, so: economic growth makes people more prosperous and allows them to enjoy better living standards and buy things they want (larger houses, better cars) but Bok thinks this doesn’t make them happier.  Accordingly, he thinks policymakers should prefer his recommendations over those of the people concerned.  The New York Times’ review explains how he thinks this might be accomplished:

Government has the potential to produce happiness, but Americans dislike government.  Ever logical, Bok concludes that the state should therefore do more to encourage trust in it. Believing that the public’s attitude toward government is too “extreme” and its judgments of politicians too “harsh,” he also calls for the news media to balance their frequent stories of corruption and inefficiency “with accounts of success and accomplishment in order to give an accurate picture of the government’s performance.”

By this stage, the lessons that we’re told we need to learn from Bok’s happiness research seem not only illberal but downright weird.  I think happiness research may have some interesting things to say, but I’ll address that in a separate post.

Spending in the New Jersey gubernatorial race

Jono has previously posted on the uncertain relationship between election spending and election outcomes (noting that other factors such as national partisan swings and candidate attributes mean that election spending is not strongly determinative of election outcomes).

Spending reports from last year’s governor’s race in New Jersey, in which the Republican challenger Chris Christie beat the incumbent Democratic governor Jon Corzine, provide an interesting data point.  Reports indicate that Corzine outspent Christie by 2-1. 

Realclearpolitics reports: 

The final tallies are in for the Gubernatorial race in New Jersey last year. Jon Corzine outspent Chris Christie two-to-one the primary and general election campaigns, $31.5 million to $15.5 million. Even those numbers are a bit misleading since Corzine was essentially unopposed in the primary while Christie had a legitimate race on his hands.

Additionally, the Republican Governor’s Association spent another $7.3 million on Christie’s behalf, which was offset by $7.1 million in spending by Democratic groups on Corzine’s behalf.

Despite the $15 million spending advantage, however, Corzine lost by four points.

So when politicians say that they need to impose restrictions on advertising to control the influence of “big money”, it’s worth asking whether there is any cogent evidence that the relationship between election spending and election outcomes is as direct as they claim or whether they are just making assumptions.

Supreme Court grants cert. in funeral picketing case

Today the Supreme Court of the United States agreed to hear an appeal from the decision of the United States Court of Appeals for the Fourth Circuit in Snyder v Phelps, which raises difficult and controversial issues about the extent to which tort liability can arise from speech by funeral picketers.

Marine Lance Corporal Matthew Snyder died in the line of duty in Iraq in 2006.  He was buried in his home town of Westminster, Maryland on 10 March 2006.  A fringe religious group called the Westboro Baptist Church picketed the funeral carrying signs such as “Thank God for IEDs”, “God hates you,” and “Semper fi fags.”  The group has picketed other funerals and appears to regard the occurrence of military casualties as some type of supernatural retribution for the United States’ tolerance of homosexuality.  The group kept at a distance of 1,000 yards ordered by local police.

The marine’s father brought civil proceedings against the family who led the picket on the grounds that it constituted an intrusion into a secluded event, intentional infliction of emotional distress, and civil conspiracy.  The jury ruled in his favour and awarded $10.9 million damages, which the trial judge reduced to $5 million.  The Phelps (the family who runs the religious group) appealed to the Fourth Circuit, which reversed the judgment.

The Fourth Circuit concluded that a reasonable bystander would not interpret the group’s signs as indicating actual facts about the deceased but instead as signalling the group’s hostility towards the country and armed forces in general.  Accordingly, the court concluded that the signs constituted statements of opinion which were therefore subject to First Amendment protection and “[b]ecause the [trial court] judgment attaches tort liability to constitutionally protected speech” it should be reversed.

However, the Court made two contextual points.  First:

To paraphrase our distinguished colleague Judge Hall, judges defending the Constitution “must sometimes share [their] foxhole with scoundrels of every sort, but to abandon the post because of the poor company is to sell freedom cheaply. It is a fair summary of history to say that the safeguards of liberty have often been forged in controversies involving not very nice people.”

Second, the Court noted the power of local authorities to keep such protesters at a distance:

Nonetheless, the various states and localities, as well as grieving families, may yet protect the sanctity of solemn occasions such as funerals and memorials. Indeed, governmental bodies are entitled to place reasonable and content-neutral time, place, and manner restrictions on activities that are otherwise constitutionally protected.

The marine’s father now has an opportunity to argue before the Supreme Court that the Fourth Circuit should be reversed.  I do not have a clear view on how the Supreme Court will rule (or ought to rule).  I think Professor Volokh and others raise a valid concern about the potential for the scope of tort liability for the intentional infliction of emotional distress to have a chilling effect.  While the religious group’s behaviour here is contemptible and deeply offensive, it is nonetheless important to tread carefully when the First Amendment is at stake.  As the Fourth Circuit points out, we sometimes need to uphold the rights of vile people in order to maintain important rights and freedoms.

Of course, from a New Zealand perspective, it is less clear to me that the case would directly raise freedom of expression issues.  In the United States, private tort claims can implicate the First Amendment.  New Zealand law does not generally regard private tort awards based on the content of the speech as involving any kind of state action so as to directly engage the New Zealand Bill of Rights Act (though the right to freedom of expression plays a role in the development of common law torts such as defamation).

It is relevant to note in this context, that the New Zealand Court of Appeal has recently upheld a conviction (on a charge of offensive behaviour in a public place) for burning a flag at an ANZAC memorial service (see, R v Morse, though the case raises different issues from those discussed in this post).

UPDATE: The Fourth Circuit’s decision has quite a useful footnote summarising the litigation and legislation that has arisen from this group’s activities:

The Defendants have a substantial history of protesting at venues other than soldiers’ funerals. For example, on the day of Matthew Snyder’s funeral, they also protested in Annapolis at the Maryland State House and at the Naval Academy. The Defendants have also been involved in litigation throughout the country relating to their protests. See, e.g., Phelps-Roper v. Nixon, 545 F.3d 685 (8th Cir. 2008); Phelps-Roper v. Strickland, 539 F.3d 356 (6th Cir. 2008). As a result of such activities, approximately forty states and the federal government have enacted legislation addressing funeral picketing. See Stephen R. McAllister, Funeral Picketing Laws and Free Speech, 55 U. Kan. L. Rev. 575, 576 (2007).

VSM: the non-conscientious objector

The Education Act 1989 provides that a “students association may exempt any student from membership of the association on the grounds of conscientious objection.”  If the association is satisfied of the conscientiousness of the student’s objection, it gives the student’s money to a charity of its own choosing.

Jono’s post ably summarises why this procedure does not save the regime from inconsistency with the New Zealand Bill of Rights Act 1990.

I’d like to focus on a different aspect: namely, the implausible premise that only “conscientious” objectors may not be compelled to join a students association.  In doing so, I’d like to defend the rights of non-conscientious or unconscientious students to decide whether or not they want to be a member of a student union based on whatever considerations seem salient to them.  Not least among those considerations: whether the student thinks she can spend her money better than the student union (in some cases, this may not be an implausible assumption).

So how did it come to pass that a student should be required to plead her case before an association pursuant to section 229A(6) of the Education Act and, even if successful, should be required to give up her money to charity as the price of relinquishing a membership she never asked for?

The conscientious objection ground to union membership is a throwback to provisions, which used to be relatively widespread in the Western world, providing for unionised “closed shops”.  The closed shop arrangements considered by the European Court of Human Rights from the United Kingdom and Denmark included grounds for an employee to seek an exemption from union membership on conscientious grounds. Similar arrangements existed in Australia.

The rationale of these procedures was to provide narrow grounds (usually invoked for religious reasons) to avoid union membership while locking other workers into the closed union shop arrangements.  As such, the procedure has its basis in a previous legislative era that was hostile to the idea that union membership was a decision for each employee to make.  The requirement to “conscientiously object” from union membership is therefore based on principles that now find little support in New Zealand law and which no longer reflect the practices of modern New Zealand workplaces.

The right to freedom of association entails more than the right to plead one’s case for an exemption to the group which you didn’t want to join in the first place.  As one of the leading New Zealand textbooks says,  “The starting point unquestionably is that no one can be compelled to join an association.”  As the other leading New Zealand Bill of Rights textbook explains, “The right to freedom of association belongs to individuals, not groups; everyone has the right.”  Just like the AA, the local tennis club, or Greenpeace, the decision is yours — and “no thanks” is a perfectly adequate answer.

Accordingly, there is no reason for students to accept the sad sack procedure under section 229A(6) as a substitute for their rights under section 17 of the New Zealand Bill of Rights Act.  The non-conscientious objector should support legislation that puts her back in charge of deciding which associations to join.

VSM: Go your own way

Jono’s post on the Education (Freedom of Association) Bill looks at why the right to freedom of association under the New Zealand Bill of Rights Act 1990 includes the right not to be compelled to join an association.

I agree and have made a submission to the Select Committee supporting the Bill and recommending some drafting changes.

Assuming that compulsory student unionism restricts freedom of association, the next question is whether those restrictions can be justified in terms of section 5 of the Bill of Rights (which provides: “subject to section 4 of this Bill of Rights, the rights and freedoms contained in this Bill of Rights may be subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society”).

As far as I can tell, the New Zealand government does not appear to have formally set out a justification for compulsory membership of students associations in terms of section 5 of the Bill of Rights. (Sections 223 – 229 of the Education Act were inserted with effect from 1 January 1991.  No report under section 7 of the Bill of Rights appears to have been made by the Attorney-General in relation to the Education Amendment Act 1990 or the Education Amendment Act 2000.)

Nevertheless, you can get a sense of the basic justifications put forward for compulsory student unionism from the arguments made in opposition to the first reading of the Bill, the arguments identified by the Select Committee’s report on the Tertiary Students Association Voluntary Membership Bill 1998 (during the previous round of reforms), and the public statements by student unions in opposition to the Bill.

The justifications seem to come down to a “representation” rationale and a “services” rationale.  I find them pretty unpersuasive for the reasons set out in my submission:

(a) First, there is a representation rationale. The argument appears to run that students associations provide representation to students and, therefore, membership should be compulsory. The problems with this rationale are:

(i) Some students may not wish to be represented by the students association. It is unlikely that mandating unwanted representation of students who are compelled to join an association “relates to concerns which are pressing and substantial in a free and democratic society.” Indeed, to the extent that students associations engage in advocacy on matters of public policy, unwanted representation aggravates the interference with the rights of students who are compelled to be members of those associations. Accordingly, a statutory regime under which people can choose whether to join an association may significantly reduce the frictions caused by students association taking positions on public policy or engaging in controversial activity.

(ii) Compulsory membership is not necessary to provide for the representation of students on the Council of a tertiary institution. Section 171(2)(e)(ii) of the Education Act provides for the election of student representatives by the students at that institution. Accordingly, it is not clear how compulsory membership can be supported as “the least possible impairment” of an affirmed right consistent with the pursuit of the objective of representation.

(iii) The representation rationale could presumably be advanced in respect of any number of different associations (e.g., all workers in the X industry should be compelled join the Y union because they need to be represented by Y). It is not clear why students associations have a special exemption (and, correspondingly, students bear a special burden) from the principle that no one should be forced to join a union.

(iv) One would immediately recognise the absurdity of assertions that all businesses should be required to join a business lobby group to ensure they are “represented” (whether they wish to be so represented or not) or that every person over a certain age should be forced to join a local affiliate of Grey Power. Notwithstanding the absence of compulsion, countless such voluntary associations across all aspects of New Zealand life provide useful representation for their members. The notion that like-minded individuals are somehow unable to pool their energies towards common goals in the absence of compulsion is plainly unfounded. It is not clear why the law should treat students in a different way.

(b) Second, there is a services rationale. The argument appears to run that students associations provide useful services to students and, therefore, membership should be compulsory. There are numerous problems with this rationale:

(i) It is not clear how the view of compulsory membership proponents that students associations provide services so valuable that no student should be free to decline them satisfies the first limb of the tests under Chaulk (i.e., “The objective of the impugned provision must be of sufficient importance to warrant overriding a constitutionally protected right or freedom; it must relate to concerns which are pressing and substantial in a free and democratic society before it can be characterized as sufficiently important”).

(ii) The services rationale fails the “rational connection”, “minimal impairment”, and “proportionality” limbs of the tests under Oakes and Hansen. There is no obvious reason to think that services provided by students associations could not be obtained by students from the university, other associations, or third party providers. The fact that many universities around the world (including some in New Zealand) operate without compulsory membership seems to expose the flaw in the services rationale. (Of course, compulsory membership proponents might still maintain that they simply believe that it would be better if a union provided those services. The short answer is that section 17 of the Bill of Rights protects the right of individual students to demur to the union’s assessment of its own importance.)

(iii) As with the representation rationale, the services rationale could presumably be advanced in respect of any number of different associations (e.g., all workers in the X industry should be compelled join the Y union because they need the services that only Y can provide well). Again, there is no obvious reason to think that students associations should be specially privileged (and students should be specially disadvantaged) by an exemption from the principle that no one should be forced to join a union.

So I think that the sky won’t fall if the provisions of the Education Act are amended to vindicate the right of each student to freedom of association.  In fact, as in other sectors in which compulsory unionism has been disestablished, I think it likely that student choice will lead to better outcomes for students.  Submissions are due on 31 March (and you can make one here).

Update: Lobbyists

In a comment on the earlier post about political donations, Eric Crampton points to an interesting article about political lobbyists: “Lobbying as Legislative Subsidy” (2006) American Political Science Review 69 by Professors Hall and Deardorff.

The standard way of thinking about political lobbyists is that they attempt to sway wavering politicians on key votes (i.e., they are trying to change legislators’ preferences).  Hall and Deardorff acknowledge that this model is quite a good explanation of how lobbyists behave in the following situation:

“(i) The legislator is perceived to have a weak preference … (ii) a specific matter is likely to be decided by a public vote; and (iii) the outcome of that vote is thought to be in doubt.”

However, Hall and Deardorff think that this doesn’t explain a great deal of legislator-lobbyist interaction.  Why do legislators give access to think tanks, for example, that don’t have a large membership base and don’t make large monetary contributions?  They can’t offer the legislator much in the way of votes or money.  And why do lobbyists spend time working with legislators who already have strong pre-existing commitments to their causes – shouldn’t they concentrate primarily on trying to sway legislators who think differently?  Yet some studies show that lobbyists spend most of their time with “those whose views they least needed to change—–their already strong supporters.”

Hall and Deardorff suggest an alternative account, which is pretty interesting:

“The main idea is that lobbying is primarily a form of legislative subsidy—–a matching grant of costly policy information, political intelligence, and labor to the enterprises of strategically selected legislators. The proximate objective of this strategy is not to change legislators’ minds but to assist natural allies in achieving their own, coincident objectives.”

In other words, Hall and Deardorff argue that lobbyists give their expertise to political allies to improve their allies’ legislative resources.  Their model is based on five assumptions:

For a legislator to have much influence on policy, she must work at it. […]

Legislators’ resources are scarce. […]

For any given period, individual legislators care about influencing more than one policy at a time […]

Legislators care about some issues more than others […]

Relative to legislators, lobbyists are specialists.

In their view, lobbyists increase the amount that legislators can accomplish in relation to goals on which the legislators and lobbyists already agree.

What do political donors get for their money?

A reasonable concern about the potentially corrupting influence of campaign donations is one of the key rationales for campaign finance regulation.  As Professor Milyo of the University of Missouri puts it:

“Conventional wisdom holds that money plays a central and nefarious role in American politics. Underlying this belief are two fundamental assumptions: (1) elective offices are effectively sold to the highest bidder, and (2) campaign contributions are the functional equivalent of bribes.”

Stephen’s post below (“The Mischief Rule”) touches on the first of these assumptions, which he thinks – and I agree – is quite weak.  But the second assumption about the nature of campaign contributions is trickier.

Large donations (or cumulatively large series of donations from associated donors) create plausible corruption concerns.  Mandatory disclosure rules for large contributions respond to this concern.  The government’s approach in the latest round of reforms is to strengthen the disclosure regime by introducing a requirement for parties to disclose the total amount they receive “in bands, including donations that fall under the [current] threshold for disclosure.”  The government also plans to develop an “associated persons” test to try to prevent donors from circumventing the disclosure threshold by using related entities to make donations just under the disclosure threshold.  While the devil is often in the detail, these reforms seem sensible.

However, some countries (like the United States) go further by limiting the amount of money that a person can contribute to candidates.  The Ministry of Justice considered such limits in its Issues Paper but the idea was not adopted in the reform package.  A related but slightly different kind of concern probably motivates such limitations – i.e., public knowledge of large donations may not address the potential risk that politicians could become beholden to large donors and use the legislative process to confer legal advantages on them.

Stephen Ansolabehere, John de Figueiredo, and James Snyder have published an interesting article looking at this issue, “Why is There so Little Money in US Politics?” (2003) 17 Journal of Economic Perspectives 105.  They consider whether there is a “market for public policy” in which, “donations come from firms, associations and individuals that seek private benefits in the form of subsidies, favourable regulations and other policies set by the government” (109).  Their provocative title reflects their observation that, while a vast amount of money gets donated or spent on lobbying, the total sum donated is nonetheless small relative to total government spending.  For example, the Washington Post columnist, George Will, once contrasted the amount donated to presidential candidates with the amount of money spent each year on Easter eggs:

“Reformers desperate to resuscitate taxpayer funding cite the supposedly scandalous fact that each party’s 2008 presidential campaign may spend $500 million. If so, Americans volunteering to fund the dissemination of speech about candidates for the nation’s most consequential office will contribute $1 billion, which is about half the sum they spend annually on Easter candy. Some scandal.”

This raises the question of why interest groups don’t donate even more money to try to obtain rents from the government.

I can’t do justice to Ansolabehere, de Figueiredo, and Snyder’s full analysis – and I know Stephen has some ideas on why it’s sometimes harder than it might seem for a politician to directly reward a contributor.

But one of their suggestions is particularly interesting: “campaign contributions should be viewed primarily as a type of consumption good, rather than a market for buying political benefits” (105).  In other words, most “individuals give because they are ideologically motivated, because they are excited by the politics of particular elections, because they are asked by their friends and colleagues and because they have the resources to engage in this particular form of participation” (118).  They suggest that we should consider whether political fundraisers act more like people selling investment products or consumption products.  Political fundraisers often bring in celebrities and musicians and hold exciting events to entertain donors.  They encourage donors to feel that they are part of a community.  In other words, the motivations of many political donors might be similar to charitable donors – i.e., the individual donor’s payoff is the sense of satisfaction from helping the cause and attending events with other like-minded people.

Ansolabehere, de Figueiredo, and Snyder say that the “consumer contributors” unintentionally make it harder for the other “investment” donors to obtain returns.  The “consumer contributors” provide a source of campaign contributions motivated by personal and ideological considerations rather than the expectation that they will receive a concentrated policy benefit (like a subsidy or favourable regulation) for their money.  Their reward was shaking hands with the candidate, or the satisfaction of being part of the political cause, or seeing their favourite band play at the rally.  So, indirectly, “20 million individuals in the United States protect themselves and their fellow citizens from special interest power with their donations of about $100 dollars each” (at 127).  (Of course, this doesn’t suggest that the status quo is necessarily acceptable.  But it does suggest that additional restrictions on political donations might inadvertently make the situation worse.)

How I Learned to Stop Worrying and Love the Bomb

It seems quite common to describe political advertising as though it is a form of warfare against voters.   According to the Dominion Post, for example, the government’s decision not to reintroduce spending limits on independent political expenditure means that voters are “set to be bombarded by record levels of advertising during the next election.”  The Public Service Association warns of lobby groups “bombarding voters with advertising.”

This language reflects reasonably widespread pessimism about the social value of political advertisements.  But Nobel laureate economist Gary Becker argues cogently that this attitude towards political advertising is misguided:

“Part of the hostility to campaign contributions reflects a general hostility to advertising found among intellectuals in all spheres, including many economists. This hostility greatly underestimates the importance of advertising in providing information, in helping new products or candidates to compete against the establishment, and in entertaining and providing other satisfactions to those affected, be they consumers or voters.”

Some research suggests that political advertisements play a role in improving voter awareness.  Less political advertising probably wouldn’t mean that most voters engage in detailed research of candidates’ positions.  More likely, a reduction in political advertising would probably just make other factors more significant, like name recognition and pre-existing partisan allegiances.

Negative advertising (or “attack ads”) can play a helpful role too.  Graeme Edgeler explains this pretty well in a post over at Kiwiblog:

“Most parties campaign in platitudes: Vote for a Brighter Future; Vote for Freedom; Vote for a Fair Share for all NZers, Vote for Me etc. I actually quite like being told what their real policies are. If the Greens are planning on introducing high carbon taxes, and National is planning on cutting the minimum wage then I want to know. And if they’re not going to tell me in their advertising, I’d quite like someone else to.”

Finally, if we care about political participation – one of the stated purposes of the Electoral Finance Act 2007 and one of the Ministry of Justice’s guiding principles in the current project – then it’s important to consider the unintended consequences of restricting political advertising for public participation in the political process.  As Judge Posner explains, “It is odd to think that the fewer political advertisements there are, the greater the amount of political participation will be.  That is like thinking that curtailing commercial advertising would result in more consumption.” (2006) Yale Law Journal 1699 at 1705.

So perhaps we should be a whole lot more relaxed about political advertising (even when it involves the Demon Sheep ).