In an op-ed promoting campaign finance reform, the Oracle of Omaha, Warren Buffett, proposed raising the limit on individual contributions from $1,000 to $5,000 and banning all other contributions. No corporate money, no union money, no soft money. It sounds great, except that it would never pass.
Campaign finance reform is so hard to pass because the incumbent legislators who have to approve it are the ones who have the most to lose. Their advantage in fundraising is what gives them job security. How do you get people to do something that is against their interest? Put them in what is known as the prisoners’ dilemma. According to Buffett:
Well, just suppose some eccentric billionaire (not me, not me!) made the following offer: If the bill was defeated, this person—the E.B.—would donate $1 billion in an allowable manner (soft money makes all possible) to the political party that had delivered the most votes to getting it passed. Given this diabolical application of game theory, the bill would sail through Congress and thus cost our E.B. nothing (establishing him as not so eccentric after all).
Consider your options as a Democratic legislator. If you think that the Republicans will support the bill and you work to defeat it, then if you are successful, you will have delivered $1 billion to the Republicans, thereby handing them the resources to dominate for the next decade. Thus there is no gain in opposing the bill if the Republicans are supporting it. Now, if the Republicans are against it and you support it, then you have the chance of making $1 billion.
Thus whatever the Republicans do, the Democrats should support the bill. Of course, the same logic applies to the Republicans. They should support the bill no matter what the Democrats do. In the end, both parties support the bill, and our billionaire gets his proposal for free. As a bonus, Buffett notes that the very effectiveness of his plan “would highlight the absurdity of claims that money doesn’t influence Congressional votes.”
This situation is called a prisoners’ dilemma because both sides are led to take an action that is against their mutual interest. In the classic version of the prisoners’ dilemma, the police are separately interrogating two suspects. Each is given an incentive to be the first to confess and a much harsher sentence if he holds out while the other confesses. Thus each finds it advantageous to confess, though they would both do better if each kept quiet.
From the book The Art of Strategy. Great book.