Tuesday, August 12, 2008

Lessig's Change Congress proposal

Larry Lessig has an article in Metro, a Silicon Valley entertainment weekly. In it Lessig talks about his new campaign to reform national politics. Lessig does a good job of laying out and describing a problem that is worth solving. He ends by providing a vague idea of what he intends to do about it, but doesn't seem to notice that the solution only addresses the surface characteristics of the problem, and won't change the underlying incentives that make the problem so pernicious. His solution might make the problem more visible, but unless they provoke a separate, more fundamental change, it will leave politics as the same mess it currently is.

The problem that has attracted Lessig's attention is the pernicious affect of money on politicians. He has laid out the problem in illuminating detail. The problem isn't just explicit graft and corruption; the unrelenting need to raise money affects even those who manage to keep their values unaffected by the source of the funds that get them elected. Those who provide the money set the terms of the debate and determine which questions will be addressed. Even ideal politicians (if any exist) who retain their values and vote their conscience have to choose among policy prescriptions provided according to the current focus of attention.

As the theory of regulatory capture shows, the decision to regulate an industry is valuable to the companies currently in that industry, regardless of what form the regulation takes initially. Eventually, the industry will leverage its greater interest in the outcomes and its monopoly on experts in the field to ensure that the effective regulations change to its advantage. Once the question of regulation is in the air, people with an interest will weigh in in various ways, including campaign contributions, and eventually there will be a plausible case that congress should discuss what regulations are best. At that point the deck is stacked.

Lessig even provides an example showing that congressfolk completely understand the implications of this. When Al Gore was working on the National Information Infrastructure, one of his proposals was to deregulate the nascent Internet. When Gore's team presented the idea to people in Congress,

the reception was not favorable. "'Hell no,' we were told." The concern? Translated: "How are we going to raise money from those guys if we deregulate them?"

This is, roughly speaking, extortion. And if so, then the Communications Act is a kind of extortion-enabling regulation: regulation whose reach was explained, in part at least, by the opportunity such regulation would give regulators to raise money.

And if so, then how much other regulation is extortion-enabling in just this sense? How many other examples are there of government reaching beyond what it needs to regulate effectively, merely to assure (sic) that members can raise campaign funds more effectively?

So to combat this problem, what does Lessig propose? He's going to use Web 2.0-style media and networking tools to shine a light on congress. They'll connect votes to contributions and show the public what is going on. But given the discussion that has gone before, the only affect of this will be to drive out any explicit graft, and encourage the legislators to take fewer positions that seem affected by donations.

But that won't solve the problem. The problem is that congress can regulate, and does so when constituents demand it. The form of the regulation and its affects on society are extremely hard to see ahead of time, but we can predict that most of the time, the industry will be more in control afterward. And we can be sure that Congress will extract a rent during and after the process, and that the regulation will be structured so that Congress at least has the ability to intervene so there's a reason for affected businesses to keep paying them contributing. Even if we can see the connections between the contributions and the resulting legislation, the contributors will still be able to defend giving money to influential legislators, and legislators will be able to say the effects are all open and visible. There doesn't have to be quid pro quo in order for the influence to be beneficial to both sides.

Giving voters access to better statistics about the situation will make it clearer that interested parties contribute to powerful legislators, but there are legal and respectable ways to do this, and there always will be.

Am I missing something? Does Lessig hope to create an outcry that will change the fundamental incentives? Is there something other than pious hope behind the drive to remove money from politics?

I think the fundamental problem is that congress is allowed and expected to legislate on all subjects. We want citizens (who are also owners of businesses and members of public-interest groups) to be able to speak about their goals and priorities. Being able to spend money expressing support for policies and politicians is an essential way of participating in the debate. Since the laws that come out of congress affect people's goals, people who favor and oppose various outcomes will attempt to influence the decisions that are made.

Money isn't the problem, it's merely one of the more apparent forms of evidence about where influence is flowing. Money and influence aren't going to stop flowing. Maybe Lessig's affect here will just be in making the flow of influence more apparent. I certainly can't foresee any way that he can stop them from flowing.

1 comment:

William H. Stoddard said...

It sounds akin to the argument of "Money for Nothing: Politicians, Rent Extraction, and Political Extortion," by Fred S. McChesney. This is a look at the process from the politicians' side, as a mechanism for augmenting their incomes through the threat of regulation. I recommend that book to you, along with "The Myth of the Rational Voter," which looks at yet another side of the balance—the behavior of voters in a democratic electorate.