Professor Adam Winkler on Limitless Political Spending

To understand how political spending spiraled out of control—projections estimate $9.7 billion spent on ads alone during the 2022 election cycle—I spoke to Professor Adam Winkler, a professor at the UCLA School of Law. His book We the Corporations: How American Businesses Won Their Civil Rights was a finalist for the National Book Award.

We chatted about changes to election processes in the 1880s and 1890s, and how a political operative named Mark Hanna introduced corporate spending into politics. Professor Winkler connects Hanna’s innovations to the political campaigns we know and don’t love today.

A condensed transcript edited for clarity is below. Paying subscribers can access audio of the full conversation here.

Ben: It’s a pleasure to have you with us, Professor Winkler.

AW: Thanks for having me on.

Ben: Absolutely. In We, the Corporations, you trace the growth of corporate spending in politics, but how did candidates finance elections before corporations came into play?

AW: Well, back in the 1800s, campaigns were generally funded by the wealth of the personal candidate or the personal candidate’s family, or sometimes by very wealthy individuals in the community who supported a particular candidate.

But election funding was much less important then than it is today because you didn't have these mass market campaigns where you had to spend a lot of money to get people to support a candidate. Often in fact elections were really determined by patronage and by local machine politics.

Ben: An example of a political machine being something like Tammany Hall, is that right?

AW: Tammany Hall is a good example. And when a machine like Tammany Hall wanted to get its candidates elected it would often distribute ballots out to members of local communities for that particular candidate.

At the time, the government didn’t issue ballots. Voters would appear at the polls with their own ballot that they would then cast. 

Ben: Does that mean you could bedazzle your own ballot?

AW: Sort of. You came and you took a piece of paper with the name of your candidate and you put it in a box. Political machines printed out their own ballots for their own candidates and distributed them among people who lived nearby. Those voters were expected to go to the ballot booth and cast the ballot that had been given to them by the machine.

Ben: So the machine in some ways is literally just a printing machine. Assuming that the federal government begins issuing ballots, when does that change take place?

AW: The government started printing its own ballots around the 1880s. Prior to then, we didn't have a secret ballot. You would just go into a room and drop your vote into a large box.

But in the 1880s, we saw a real reform of how elections were managed, and one of the developments was the rise of secret voting. So you could vote in private behind a booth and you had a government-printed ballot that had all of the candidates on it. You could always write in your vote for another candidate, but instead of relying on self-printed ballots, the government decided to rely on government-printed ballots, for ease of counting and for administration.

Ben: Am I right in assuming that the government official who devised the secret ballot was always picked last for his kickball team in PE?

AW: No, I think it's more likely that the government official who devised this reform was modeling the electoral reforms of the laws of Australia. This was known as the Australian ballot and the goal was to clean up the electoral process, prevent corruption, and make elections more meaningful as a reflection of the popular will.

Ben: Interesting. Moving forward to the 1890s, is there someone in particular who takes advantage of the new reforms?

AW: No one understood the implications of the transformation in the political process more than Marcus Alonzo Hanna, kind of the Karl Rove of his day. He was the political mastermind behind a twice-successful Republican presidential candidate: in Hanna's case, William McKinley, who won the White House in 1896 and was reelected in 1900. 

Hanna was raised in Cleveland, where he was a high school classmate of John D. Rockefeller, and Hanna had enjoyed a successful career in the coal and steel industries, but his true passion was politics. In 1895, he handed off his company to his brother and turned his full attention to electing William McKinley, a fellow Ohioan, to the presidency.

Hanna used his businessman's instinct for innovation and marketing to revolutionize how election campaigns raised and spent money, and for the first time brought significant amounts of corporate cash into the electoral process. 

Ben: Hanna’s nickname becomes Dollar Mark, is that right?

AW: That's right.

Ben: How did Dollar Mark change the way that campaigns were run at the time?

AW: Hanna was the chairman of the Republican National Committee in the 1896 presidential election, and he understood that he needed to raise more money than any previous presidential campaign in history.

The Democrats had nominated a firey populist named William Jennings Bryan, who was an outspoken opponent of corporate power and who drew a lot of broad support from farmers and the working class. Early in the campaign, Bryan had a lot of momentum. To counter him, Hanna decided to undertake an exhaustive and systematic publicity campaign to educate voters.

Among Hanna's innovations was to centralize control of the presidential campaign. Traditionally, state-based party committees managed local campaigns, even for national candidates like the president, but Hanna centralized all of the state committees under his authority. He also created the first nationwide advertising campaign to market a presidential candidate and produced over a hundred million pieces of campaign literature printed in German, Spanish, French, Italian, Danish, Swedish, Norwegian, and even Hebrew to appeal to immigrants. 

He also promoted William McKinley through the creation of things like buttons, posters, billboards, cartoons, and leaflets that were manufactured by the carload. Hanna hired thousands of people to go out and distribute these buttons, post these posters, and promote McKinley in every competitive district.

It was the kind of campaign that today we take for granted but had really never before occurred in American history.

Ben: I suppose there were a few side effects to this campaign, though? 

AW: Right, so Hanna's new methods of electioneering required far more money than the campaigns of old. Hanna found a lot of that money in corporate America. Hanna was someone who perhaps more than most appreciated the role of money in politics. He once famously quipped “there are two things that are important in politics. The first is money. And I can't remember what the second one is.”

Ben: The obvious answer is lawn signs.

AW: Yeah, exactly. But you need money to make the lawn signs.

To raise the money for McKinley's campaign, Hanna thought the corporate giants of the era were the perfect contributors. 

Business leaders at the time were very fearful of the potential economic consequences of William Jennings Bryan being elected to the presidency. So Hanna went to those business leaders and said, it's time for you to put your money behind a business-friendly candidate like William McKinley. He went to banks and said, you should give one-quarter of 1% of your capital. He went to large industrial corporations and recommended that they give five- and six-figure amounts. Standard Oil, the economic giant run by Hanna's schoolmate, John D. Rockefeller, was asked to give $250,000 (at the time an enormous amount) to the McKinley campaign.

Hanna really systematized the fundraising for political campaigns the way no political operative had ever done, and the overall fundraising haul that Hanna generated for McKinley was estimated to be $7 million, more than ten times the amount that was spent by William Jennings Bryan. It was the most ever spent for a presidential candidate. 

Ben: Wow. To better understand the magnitude of that figure, could you please convert it into Bitcoin for our audience?

AW: Ha! The way to conceptualize how big it was is this: although election campaigns tend to cost more every single season, Hanna's haul in 1896 was so huge that no presidential campaign would equal it for nearly half a century. This was really an unprecedented effort to raise and spend money on an election campaign.

But no one really knew about it! There were no disclosure laws back in the 1890s. So today Americans worry about dark money, about money that comes from unidentified donors, but virtually all of the money in the 1896 election was dark money and we didn't get the first federal laws requiring campaigns to disclose funders until 1910.

To learn more about how the first campaign finance laws came to be, check out the episode of Skipped History on the Great Wall Street Scandal of 1905.

Ben: Ha! I appreciate the plug. On a concluding note, how should we consider Mark Hanna’s reforms when viewing today’s election cycles?

AW: Well, if we want to know why our election campaigns are so out of control, we have to go back to Mark Hanna and the 1896 campaign. We're still living in the world that Mark Hanna built where the wealthiest of Americans and big businesses are expected to support campaigns, and where campaigns use advertising techniques that business corporations were developing around the turn of the century to market political candidates. So many of the ills of our political system can be traced back to Marcus Alonso Hanna.

Ben: An important, discouraging, and illuminating connection to make. Thank you so much for being here and for this captivating history lesson. 

AW: Thanks so much for having me.