100 million anonymous fat cats; the next phase of campaign finance reform.

• Author: Rauch, Jonathan
• Position: VOTING WITH DOLLARS: A New Paradigm for Campaign Finance

VOTING WITH DOLLARS: A New Paradigm for Campaign Finance by Bruce Ackerman and Ian Ayres Yale University Press, $29.95

THE SOVIET SYSTEM IS BASICALLY senseless," the Russian dissident Andrei Amalrik once wrote. "Like a paranoiac, it behaves logically; but since its premises are senseless, the same is true of the results." He might just as well have been describing the American system of campaign-finance regulation. It, too, goes through all the motions of being rational, even hyperrational; yet it too is senseless, because its premises are incurably wrong.

The system assumes that private money is evil, that elaborate rules can squeeze out the money, and that the squeezing can be done without infringing on core political freedoms, notably freedom of speech. Wrong, wrong, and wrong. Private money is not an intrusion into politics, it is a part of politics. It can be channeled but not eliminated, nor even reduced more than a little. The attempt to regulate money out of politics mainly pays for the vacation homes of lawyers, while restricting and, increasingly, even criminalizing ordinary political activity.

Washington framed the current campaign-finance laws in the 1970s, around the time it was also trying wage-and-price controls and energy rationing. The latter two policies are long gone and gratefully forgotten, but the dysfunctional 1970s campaign-finance system remains, and continues to command the intense and often dogmatic loyalty of the generation that saddled us with it. True, Washington just "reformed" it. I use the quotation marks because the newly enacted McCain-Feingold-Shays-Meehan bill is no more a real reform than was Mikhail Gorbachev's perestroika. The new law contains one provision--its unprecedented crackdown on political advertising by advocacy groups--that is blatantly unconstitutional, but the Supreme Court will probably knock that out. What will remain is a law that will do some sensible things, on the margins, and also maybe a few not-so-sensible things. But mostly it just piles new 1970s-style rules on top of the old 1970s-style rules, which means it won't work. In the long run, the McCain-Feingold-Shays-Meehan bill's most useful contribution will be to help demonstrate the futility, of patching the 1970s system.

A growing number of reformers--no quotation marks, this time--understand as much. Several states are experimenting, so far pretty successfully, with "clean money" options that publicly finance candidates who...