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Why Is the Cost of Running for Office Exploding?

The original text of the opinion piece on intraelite competition that I sent to Bloomberg Opinion grew to almost twice the length when it was finally published. The two editors kept asking me to expand on some points and to provide supplementary evidence on others. Not all of this ended up in the article. One thing they asked was whether it was literally true that competition for political office has intensified. It is, and since it did not get included in the Bloomberg article, I think it’s worth a separate blog to discuss it.

To remind you of the argument, something happened in the late 1970s in the USA (to be more specific, it was structural-demographic trend reversal; see the previous blog for a table of contents of blog posts, which explain various aspects of it). As a result, intraelite competition began increasing. A number of proxies support this conclusion (as was discussed in the Bloomberg article, see also the Aeon article). In particular, the number of wealthy individuals began increasing (to put it somewhat paradoxically, the 1 percent became the 3 percent). Second, more and more advanced degrees were granted, eventually many more than there were positions for. I focused on the law degrees, because obtaining a JD is one of the most common routes to the political office. But the same dynamic affected MBAs.

 

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And even MDs (despite the AMA’s efforts to limit the supply of MDs).

At the same time that the numbers of politically ambitious wealth-holders and politically ambitious JD-holders increased several-fold, the supply of top political positions has not changed. There are only 100 Senators and 435 Representatives in the US Congress. So the competition for these offices had to intensify.

And it did. There are several indicators that support this point of view. Let’s take a look at the following chart:

campaign

The Cost of Winning an Election to the House, 1986–2012; in thousands of inflation-adjusted 2012 dollars (Red Curve). The purple curve shows the total amount (in millions of 2012 dollars) spent by major party candidates. Source of data:  the Campaign Finance Institute.

Between 1990 and 2012 the amount spent by the winning candidate in House elections more than doubled (in real terms). The same trend held in the Senate.

This trend, of course, is widely known. Usually, however, it is just stated as given, without delving into causes driving this increase. One article I recently read suggested that this is due “to the 2010 landmark United States Supreme Court Case, Citizens United vs. The Federal Election Commission, in which the Court ruled that corporations could spend unlimited amounts of money to influence federal elections.”

But the trend, as we can see in the chart, precedes the 2010 ruling by decades. To me the explanation is obvious. As the demand for a commodity increases, while the supply stayes fixed, the price of the commodity has to go up. This logic is implicit in the writings of Kevin Phillips, e.g. Wealth and Democracy.

Here are more data, this time from OpenSecrets.org. It shows the number of candidates (including the primaries) that ran for House and Senate seats:

year house senate both chambers millionaires
2000 1233 191 1424 ??
2002 1299 146 1445 32
2004 1212 189 1401 30
2006 1317 166 1483 42
2008 1377 168 1545 51
2010 1897 308 2205 58
2012 1711 251 1962 48

The elections of 2010 were particularly crowded. Between 2000 and 2010 the number of contenders for House grew by 54 percent, and for Senate by 61 percent.

Beginning in 2002 OpenSecrets.org also started keeping track of how many “millionaires” run for Congress (adding together the Senate and the House). They define millionaire candidates as those who spend at least half a million dollars of their own money on the campaign. According to their definition, betweem 2004 and 2010 the number of such millionaire candidates nearly doubled. (They use nominal dollars, but even if we adjust for inflation, the trend is hardly diminished. For example, if we use 2000 dollars, then the number of ‘millionaire candidates’ in 2012 would decrease from 48 to 45 – not nearly enough to explain the overall trend).

Note also that the number of candidates who actually run is an underestimate of demand for political office. As its price increases, a larger proportion of potential candidates are deterred from running.

In summary, the data trends are entirely consistent with the structural-demographic explanation. The growing cost of running for office is reflecting intensifying intraelite competition.

10 Comments

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10 Comments

  1. john Lillburne says:

    The paradoxical effect of globalisation is that even while world wide inequality is decreasing, within each country inequality is increasing dramatically. As you have pointed out so often the rich mans glorification leads to the working mans immerisation. Didnt somebody famous once say workers of the world unite ?
    link to telegraph.co.uk

    • Peter Turchin says:

      I saw the article you reference. There are too many problems there to deal with in a comment. But I don’t see a revolution in China any time soon – they are at least 30-40 years away from a structural-demographic crisis.

      • Richard says:

        Why would you say 30-40 years?

        Relatively little inter-elite competition (compared to previously)? Strong nationalism? Few crazies killing people?

        • Peter Turchin says:

          It’s just a guess – no scientific basis for it. Unlike the case of the US, I haven’t done a systematic study of China. So take it with a grain of salt.

          • Richard says:

            In that case, I would say that China is close to due for revolt/revolution. In recent history, the most traumatizing periods have been the Taiping Rebellion (1850-1864), the period after the 1911 Revolution (peaking in the Chinese Civil War (that started in 1927 and would have ended in the extermination of the Communists after 1936 if the Japanese had not invaded Manchuria but instead went on until 1949 and ended in a Communist victory), and the Cultural Revolution (1966-1976). Roughly every 55-60 years. So China could convulse again around 2020 as well. I certainly don’t think that we have to wait 30-40 years for a crisis. China is already at the point where something like 90% of the young people have no hope in their country and everybody is trying to escape.

          • Richard says:

            Oh, and the number of college grads has exploded in China in one generation.

      • Mark Sloan says:

        Peter, I am intrigued by your comment about China. Have you yet publically gone beyond justifying the provisional truth of your hypotheses based largely on explanatory power for what has been and ‘is’ (a sensible and conservative approach) to making explicit predictions about the future of specific countries? Making such predictions and recommendations for ameliorating policies might be beneficial for publicizing your work. But it obviously would be risky if your predictions prove to be wrong.

  2. john Lillburne says:

    I was writing somewhat tongue in cheek given the prof’s background. A full revolution is 30-40 years off(its fits with the k cycle) . What we are likely to experience is increased social fragmentation and some high polarisation situations that will lead to some nasty situations that the elite will handle fairly easily but resulting in an increasingly totalitarian governmental policies all in the name of freedom and democracy. The elite have all the advantages at the moment, money, power, control of arms,media control, control of the police, lack of external enemies. internal conflict between the elites is yet at an early stage. enough to cause locking of the system , but not enough yet to cause revolution

  3. john Lillburne says:

    some recent articles on the causes of the top/ bottom split

    link to businessspectator.com.au

    link to economist.com

    link to economist.com