James Madison understood corruption from this perspective—as including but not limited to illegal and venal activity. In Federalist 10 Madison warned about the threat of factions, or “a number of citizens . . . united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community.” As a young legislator in the 1780s, under the Articles of Confederation, he saw unchecked factionalism nearly tear the country to pieces, creditor against debtor, farmer against merchant, revolutionary against loyalist, state against state. Just a few short years after the nation had freed itself from British colonialism, it was destroying itself. Hence the evocative phrase that opens the famous tenth Federalist Paper: the violence of faction.
Prior theorists had advocated virtue as the tonic for factionalism: Educate the people about their self-interest, rightly understood, and you can sustain a republic. Others thought a small republic, with homogeneous interests, could keep factionalism to a minimum. Madison rejected these alternatives. He argued instead that selfish interests can eventually yield public-spirited policy provided the government is properly designed. Per Madison, “ambition must be made to counteract ambition.” In his view, a republican government allows a vast array of factions into the political sphere, then forces them to deal with one another through carefully designed institutions. The eventual compromises will be in the public interest, even if all of the participants are out for themselves.
That is the theory, at any rate. In practice, we have fallen short of this ideal. Yet Madison was not wrong. The problem is that we have failed to follow in his footsteps. We have not taken care to maintain the carefully balanced design that he sought. And as a result, public policy has tilted inexorably toward “honest graft.”