On the Profitable Nature of Public Service, and the Convenient Exemptions Thereof

The rules are for everyone. Almost everyone.

There is a peculiar alchemy at work in democratic governance, one that transforms the language of sacrifice into the machinery of accumulation. We are told, and have been told for generations, that those who enter public life do so at great personal cost — surrendering lucrative careers, enduring public scrutiny, accepting modest government salaries in exchange for the honor of service. This framing is not entirely false. It is, however, incomplete in ways that are not accidental.

The elected official who arrives in Washington, Brussels, or Westminster of modest means and departs a millionaire is not an anomaly. He is, statistically speaking, the norm. Studies of the U.S. Congress have consistently found that its members grow wealthier during their tenure at rates that outpace nearly any other profession — a remarkable feat for people nominally constrained to a fixed salary. The explanation is not mystery. It is access, information, and the architecture of exemption built quietly into the laws that govern everyone else.

For decades, members of Congress were legally permitted to trade individual stocks — including in industries directly affected by legislation they were drafting and voting on. The practice was not hidden. It was simply not discussed in polite company. When it finally became too visible to ignore, the STOCK Act of 2012 was passed with great fanfare, introducing disclosure requirements that were, in practice, routinely ignored, with fines so trivial — $200 — that they functioned less as deterrents than as administrative fees for a valuable service. Subsequent attempts at reform have stalled with a reliability that itself communicates something.

This is the tell: not the corruption, but the exemption. Insider trading laws exist. Conflict-of-interest regulations exist. Disclosure requirements exist. They exist for nearly everyone. The remarkable achievement of the political class, across party lines and across nations, has been to construct systems in which those who write the rules occupy a curious position just outside them. Not illegally — illegality would be too dangerous, too exposable. The exemptions are structural. They are procedural. They are features.

The defense, when offered, follows predictable lines. Public servants must be recruited from the capable, and the capable have options. Constrain compensation and disclosure too tightly, the argument goes, and you will be left only with those who cannot get jobs elsewhere, or those with independent wealth who need not worry about it. This argument deserves more credit than critics give it — there is a genuine tension between accountability and recruitment. It deserves considerably less credit than its proponents assign it, because it has historically been deployed not to solve that tension but to dissolve scrutiny of it.

What is most clarifying is not the behavior of bad actors but the behavior of good ones. Legislators who are, by all reasonable accounts, honest and conscientious, who entered public life for legitimate reasons, nonetheless participate in systems that permit stock trading in relevant sectors, that allow the revolving door between regulatory agencies and the industries they regulate, that let campaign finance create dependencies that need never be spoken aloud to be felt. The system does not require villains to produce villainous outcomes. It requires only rational actors responding to the incentives in front of them.

There is a word for the private-sector version of this arrangement: rent-seeking. It describes the extraction of wealth through the manipulation of the political or regulatory environment rather than through productive economic activity. It is considered, in most economic traditions, a drag on growth and an enemy of fair markets. It is, in the political environment that produces those markets, simply called governance.

This is not an argument for cynicism, though cynicism is the easiest conclusion. It is an argument for precision. The problem with most anti-corruption rhetoric is that it personalizes what is structural, demanding better people when the more tractable ask is for better rules. Better people are in irregular supply and cannot be reliably produced. Rules can be changed on a Tuesday afternoon — if the people whose behavior they would constrain can be persuaded to change them.

That persuasion is, it turns out, the difficulty. And there, neatly, is the circle.