Campaigns and Potato Chips; or Some Causes and Consequences of Political Spending

Before getting too upset about the initially eye-popping sums candidates spend to win elections, law professor (and current member of the Federal Election Commission) Bradley A. Smith advises us to put campaign costs in perspective. Americans, he notes, spent two or three times more on potato chips than on electing candidates in the mid-1990s. For Smith, the potato chip example is only one illustration that ought to settle fears about "obscene" and "runaway" campaign expenses. Perspective, however, is unlikely to move those convinced that big donors drive the political agenda. Convinced that money and politics is a far more nefarious combination than fat and salt, campaign finance reformers will no doubt carry on their search for new ways to limit spending and contributions, continuing the Progressive Era crusade to eliminate money's degrading influence on democracy. ¹

Commissioner Smith's comparison suggests a way of approaching the "problem" of money in politics that sets aside the matter of morality. What would we learn if we literally considered campaigns as a business, like snack foods, package delivery, or transportation? Campaigns face organizational problems that are common to industry. Like all businesses, they must raise capital, assemble a labor force, identify products, arrive at a marketing plan and pitch, determine which tasks to keep internally and which to purchase from the outside, maintain a flow of good information within the organization, and coordinate the work of various layers of the "firm." Like many businesses, campaigns have dealt with increasing levels of federal and state regulation. Like greeting cards, campaigns are largely seasonal businesses; the political calendar of issues and elections, however, can keep operations running much of the time. Like all purveyors of consumer goods and services, campaigns must grab the attention of a distracted public. Measuring how well they are doing that has changed with available technologies, but in contrast to most industries, political campaigns produce winners and losers on a date certain. But just as business school case studies pick apart firms' decisions, explaining election results can occupy strategists, pundits, and scholars who hope to avoid mistakes, to capitalize on successes, or simply to understand. ²

In business terms, political history has typically focused on the pitch and product--issues and candidates--as well as consumer, or voter, behavior. This essay is a pass at the business of campaigns as a whole, from raising capital and a workforce through measuring effectiveness and solving communication and coordination problems. It takes two Republican cases, widely separated in time: the presidential election of 1868 and the California gubernatorial election in 1954. ³ Each illustrates how parties and candidates overcame difficulties--in building a national organization in the first case, and in running campaigns without benefit of party coordination in the second. Each points to how innovations in raising funds and running campaigns would have significant political consequences that went well beyond the November result. Treating politics as an industry can help us see why reform of campaigns and spending has fallen well short on the promise of politics dedicated to the "public interest." ⁴

Republican prospects in 1868 were as good as any reasonable partisan might hope. Heading the ticket was General Ulysses S. Grant, nominated unanimously on the first ballot at the May convention. His brief acceptance letter opened a campaign in which he said even less. "Let us have peace," Grant wrote in closing his letter, and his supporters gladly filled in the meanings of his silence, his military fame, and his indifferent Democratic loyalties in the 1850s. Some imagined a president compliant with congressional plans for Reconstruction; others a strong, honest leader; others still a moderate peacemaker who could find the right formula for the defeated South. The electoral map, as well as the luster at the top of the ticket, made Republicans like their chances. No serious factional battles disturbed the party's base in New...