Well, this has taken a little longer than I expected, but here it is, the next part of my series on “micropolitics”. Be sure to read Part I if you need the context.
In the last installment of this feature, I wrote about a trend called “microjournalism” and the challenge it poses to traditional media power centers. However, this is hardly a unique observation, nor is it one of my own devising — lots of other folks have been talking about microjournalism in recent months. I do believe, however, that there is a complementary trend that is not nearly as fully developed that nonetheless demands our attention. That trend is too new to have a name, so I’ll take a shot at giving it one: I call it “microfinance”, and it poses the same challenges to the money men who keep our political system awash in cash that microjournalism does to Old Media.
To understand why, you first have to understand the way things currently are in American politics. Our modern system of political institutions (by which I mean parties, interest groups, and so forth) has evolved in response to one underlying issue: the need to raise large volumes of money. In an age of mass media, you’re simply not politically viable if you can’t afford to buy access to those media; and that access isn’t cheap.
(This dependence on a small number of media gatekeepers also provides great opportunities for those gatekeepers to profit by charging candidates and advocacy groups higher-than-market-rate prices. Unsurprisingly they have been taking advantage of those opportunities with gusto. That’s a subject for another day, however.)
The end result of this has been that just about every major political institution, over the past forty years, has transformed itself into an engine for raising and distributing money. This is true regardless of party; it’s just been an easier transition for the Republicans, whose institutions (Chambers of Commerce, industry organizations, etc.) have always been more cash-oriented than have the similar institutions on the Democratic side (unions, community groups, etc.). The parties themselves have almost ceased to exist except as vehicles for raising money — when was the last time you got invited to a meeting run by the party you’re registered as a member of? (Your answer will vary depending on whether or not you’ve recently contributed to that party.) And new institutions, mostly PACs, have sprung up explicitly to distribute money.
Think of this as “macrofinance” — institutions aggregating dollars and distributing them to candidates. It’s the way things are done today, and the results have been predictable: an explosion in the cost of campaigns as the parties entered into a financial arms race. The amounts of money required to be competitive have gotten so astronomical, in fact, that incumbents, who have huge intrinsic fundraising advantages, have in many ways become legislators-for-life — consider that in the 2000 election, according to data from Common Cause, 98% of incumbent members of the House of Representatives were re-elected, and those incumbents had a 4-to-1 advantage over their challengers in terms of total financial resources held by their campaigns. Indeed, American Congressional elections have become so predictable that one group has developed a model that can call with 99.9% certainty the winners of 1,200 races from 1996-2002, and they have used this model to already call the winners in 350 races due to be held in 2004 — an election that’s nearly eighteen months away!
The key fact about macrofinancial institutions is that they are resolutely not local. Instead of being organized on the basis of geography, they are primarily organized on the basis of interest. So, for example, a Congressperson might receive hundreds of thousands of dollars from the entertainment industry, even though they represent a Midwestern district far from Hollywood or New York. Why? Perhaps they occupy a key seat on a committee that writes regulations for the entertainment industry. The result of this scenario is that what’s supposed to be a local contest, run on issues relevant to that district, ends up getting swamped by a tidal wave of money from elsewhere in the country based on issues that mean nothing to that politician’s ostensible constituents — and the challenger to that incumbent, who has no such position of influence to use to attract contributions, ends up getting drowned.
What if there was a way for ordinary citizens to counteract this trend? What if there was a way for interest groups to spontaneously self-organize, raise money, finance campaigns, put their people into office, and then dissolve when their mission was accomplished, rather than turning into permanent fixtures on the D.C. meet-and-greet scene? And what if challengers could tap into these spontaneously organizing groups, just as incumbents tap into more established groups?
That, in a nutshell, would be microfinance. And it’s happening.
Don’t believe it? Many of the pieces are already in place. Consider the following:
Spontaneous interest-group mobilization is being practiced every day by MoveOn.org. Originally founded to allow people to express their wish for Congress to stop the impeachment of Bill Clinton, MoveOn has evolved into a kind of grass-roots action marketplace — a place where people can self-select into groups around issues, and then use tools provided by MoveOn to act on them. This can go far beyond the typical “sign our online petition” function other groups offer — they include a “viral” component, allowing users to easily pass the word about the campaign on to their friends, and a financial component, allowing users to contribute to advocacy campaigns on their issue. This approach has resulted in some powerful results: when they put out a call for contributions to support Oxfam America’s relief efforts for postwar Iraq, Oxfam got nearly half a million dollars in response — a sum equal to two-thirds of all the money the group has raised for Iraq relief so far.
Ridiculously easy group-forming is a concept that was born in the world of Weblogs (online journals, commonly referred to as “blogs”). The idea is that a single person’s blog is only so interesting — what’s more interesting is for people to be able to use their blogs as vehicles to join up with communities of like-minded individuals, with software doing the heavy lifting of matching people to each other and to groups. Because the barrier to entry in the Weblog software world is very low (the software is not technically challenging to write, and no major vendor like Microsoft has yet tried to muscle out the small fry), the pace of innovation has been fast and furious, resulting in an array of technologies designed to support linking people together online, including TrackBack, Easy News Topics, and FOAF (an RDF vocabulary for describing yourself and your relationships to other people online). Tools like the Internet Topic Exchange and K-Collector demonstrate in a crude way how these technologies can be wired together to seamlessly connect people to other people they had no idea they had something in common with. It may be crude now, but a year ago most of these technologies didn’t even exist, so the pace of their evolution should be evident. How long do you think it will take before they start to acquire polish and scale up?
An infrastructure to aggregate small payments is in place, courtesy of PayPal and similar services. It’s almost comically easy for anyone who wants to raise money, for any reason, to do so. How easy? Take a look at the original face of SaveKaryn.com — a Web site set up by a twentysomething New York woman who managed to rack up $20,000 in credit card debt. When collection agencies gave her a reality check on the limits of her purchasing power (“I just couldn’t stop buying things,” she wrote, “I wasn’t out saving the world. I was just at Bloomingdales.”), she put up a Web site describing her situation and asking people to help by giving a dollar via PayPal. Twenty weeks later she had put together $13,323 in contributions through the PayPal link, which, when combined with money she got selling some of her stuff on eBay, cleared the debt. (This is even more remarkable when you consider that PayPal takes almost 30% of every contribution in fees, so people actually gave much more.) Her success has naturally led to an explosion of imitators (and not a few parodies). This may seem frivolous until you realize what it means: it has become so easy to give small amounts of money online that people can, and will, do it on impulse. Combine that with very large audiences — like, say, the 2 million people who participate in MoveOn.org — and you begin to see the possibilities this offers for targeted fund-raising on issues people actually care about.
A candidate leveraging these tools to boost their campaign even emerged in the 2002 election cycle: Tara Sue Grubb. Tara Sue was a Libertarian candidate for Congress in North Carolina’s 6th District, running against Republican Rep. Howard Coble, an entrenched encumbent — so entrenched, in fact, that the Democrats hadn’t bothered to recruit someone to run against him. Representative Coble was in a similar position to the hypothetical Congressperson I described above — he had won in 1997 the chairmanship of the Subcommittee on Courts and Intellectual Property of the House’s powerful Judiciary Committee. This is the subcommittee that drafts all the laws and regulations affecting the use of intellectual property online, so naturally interest groups like the Motion Picture Association of America and the Recording Industry Association of America raced to dump buckets of money into his campaign coffers, even though few of his constituents back in Guilford County, North Carolina knew or cared about the issues dear to the hearts of the IP cartels. However, several prominent Netizens who were upset at what they viewed as a power grab by the cartels at the expense of fair use and other basic rights did notice, and they reached out to Tara Sue, who had been toiling in third party obscurity, asking what her position was on those issues. What she had to say was music to their ears — she was with them 110%. So these folks worked with to launch a remarkable nationwide online campaign urging people concerned about the direction IP law was taking to lend a hand or send a check to Tara Sue. The campaign won her many contributions and, in the end, led to her winning 11% of the vote — a significant amount for a previously unknown third-party candidate, and enough to prompt the major sponsor of the legislation in question to state that he was willing to consider softening his legislation to satisfy the insurgents.
Put all these factors together and you begin to see the types of movements that could emerge — interest groups finding each other spontaneously through blog communities, organizing via e-mail and RSS feeds, reaching out to expand their membership via MoveOn.org, collecting a war chest via PayPal, and then spending it to boost the fortunes of people like Tara Sue. Such networks would almost invariably favor challengers, for the same reason that the existing networks almost invariably favor incumbents — because existing networks are tied to the status quo, while the new fringe networks would in most cases emerge in opposition to the status quo. (Consider the issues that have engaged the people we’ve looked at above: war in Iraq and onerous online regulation are both issues where there were no potent voices of opposition within the Establishment. This seems like the type of case most likely to spawn such fringe networks; issues that already have well-defined advocates on both sides within the Establishment — abortion, for example — would just see the fringe network absorbed into the existing framework.)
You could, if you were feeling ambitious, even take this model beyond American politics as a way to effect change for the better in the world at large. For example, in the world of international development, the traditional model of how to help developing countries has been the World Bank model: large-scale, large-buck public works projects designed to attack an entire social problem in one fell swoop. In recent years, however, an alternative model has emerged, championed by Grameen Bank. Instead of tackling societal issues from the top down, Grameen took the opposite tack, pioneering an innovative approach that came to be known as “microcredit”.
Grameen’s idea was to attack the problems from the bottom up. In most of these countries, you see, a little developed-world money goes a very long way — $50 can be enough for a villager to buy enough bamboo to start quite a lavish basket-making business, for example, instead of doing piecework for someone else who loans them money each day to buy bamboo at an extravagant interest rate. To the developed world, $50 is nothing — but to that villager it’s a ticket into a new, more secure life for herself and her family. Grameen has had such success with microcredit (less than 1% of their loans end in default, and the stakes of each loan are so small that the occasional default can easily be lived with) that the idea has gone from the lunatic fringe of development thinking into the “best practices” bin. (Indeed, Grameen’s success is what got me thinking about microfinance more broadly in the first place.)
Now, imagine a world where anybody can be Grameen Bank, identifying worthy projects around the world and bringing them to the attention of emergent communities. If people will give a buck to Save Karyn, they’ll give a buck to save a village’s school or water supply — and you only need fifty people to give to be able to do some good. Or convince two people to give up a DVD each this month and they can cover the cost between themselves.
That’s the promise of microfinance — that we can connect people who need money directly to people who have it, and, by doing so, loosen the hold that Big Money has on the levers that control our lives. Up to now it’s been impossible because the friction involved in raising and aggregating contributions has simply been too high; but that friction is becoming less and less every day, and without it, it becomes conceivable for people to erect new institutions, on their own, to act as a counterweight to the forces that have distorted our politics.
The ground is covered with tinder. All that’s needed is for someone to come along with a box of matches and the nerve to use them.
(Got feedback? Let me have it!)Posted by Jason Lefkowitz at May 14, 2003
If you think anything I write here represents the opinions of anybody but myself, you need more help than I can give you. The opinions are all mine, folks. Nobody else's. ESPECIALLY not my employer's.
If that's too hard to understand... well, I'm sorry. There's only so much I can do. I'm not a therapist, and I'm not a miracle worker. (Unless you consider staying employed in this economy a miracle.) I wish I could help you work through your delusional belief that I'm speaking for anyone else but myself. Honestly, I do. But in the end, that's a monkey you'll have to get off your back on your own. Sorry.