Sweeping aside a century-old understanding and overruling two important precedents, a bitterly divided Supreme Court on Thursday ruled that the government may not ban political spending by corporations in candidate elections.

The ruling was a vindication, the majority said, of the First Amendment’s most basic free speech principle — that the government has no business regulating political speech.

 
So, the Court's view is that campaign finance regulation (at least the part addressed in yesterday's decision) is not constitutional. I am not a lawyer, but that view sounds right to me.  Let's put aside the constitutional issue, however, and ask whether campaign finance regulation would be good policy if it were constitutional?

The standard argument for such regulation rests on four claims:

1. that spending by politicians affects their likelihood of election;

2. that contributions to political campaigns affect the policies a politician supports;

3. that these influences on political outcomes are undesirable;

4. and that regulation successfully limits money’s influence on these outcomes.

Claims 1 and 2 are oft-overstated, but they probably have some validity. 

Claim 3, however, is probably backwards. Money lines up on one side of an issue because a larger economic pie supports that side. Special interests do support bad policies, including corporate welfare, tariffs and quotas, agricultural subsidies, wasteful weapons programs, and pork pork-barrel spending, but money often causes better policies, not worse; free trade is an excellent example.

Claim 4 is even less convincing: politicians and special interests can circumvent most regulation.

So, campaign finance regulation's main goal is not compelling, and the regulation does not achieve that goal anyway.  Instead, the regulation protects incumbents and rewards politicians who exploit loopholes in the law.  The Court's decision is good economics, as well as good law.