Photo: Thos Robinson/Getty Images Entertainment
The One Way to Harness Silicon Valley's Self-Interest for the Good of the Country
Ironies

The One Way to Harness Silicon Valley's Self-Interest for the Good of the Country Tech Moguls Are the Last Best Hope for Campaign Finance Reform

By Photo: Thos Robinson/Getty Images Entertainment

In theory, there are a variety of ways to rein in the power of Super PACs and the political influence of the ultra-rich who fund them. Starting your own Super PAC is probably not the first solution that comes to mind. But somehow that’s the path that Lawrence Lessig, the Harvard law professor and campaign finance activist, recently chose.

Back on May 1, Lessig launched Mayday, which, as he explains in this video, aspires to raise tens of millions of dollars in unregulated cash to elect candidates who will radically overhaul the current campaign-finance system, thereby limiting the influence of people who, well, donate millions in unregulated cash. “When we raise the money we need to make impact,” Lessig says in the video, “we’ll hire the best bad-ass campaign shops we can find to make these contributions work. So, yes, we want to spend big money to end the influence of big money.” The irony of the project is not lost on him.

Reassuringly, Lessig has thought through the plan in somewhat more detail than hiring a select few bad-asses. The idea is to raise $6 million in Kickstarter-like pledges from tens of thousands of ordinary voters, which Lessig will then persuade a handful of righteous billionaires to match. Mayday plans to take the $12 million it raises altogether and target five key congressional races this fall, using all the modern tools of political warfare to ensure that the pro-campaign finance candidate wins in each one. Then, in the run up to the 2016 elections, Mayday will use the lessons of these five 2014 races to replicate the effort on a much wider scalewide enough to influence the outcome of campaign-finance legislation in Congress. Which is to say, it will potentially aim to raise hundreds of millions of dollars, not just $12 million, and target hundreds of races, not just five.

Lessig set out to raise the first $12 million in two phases. Phase one came in May, when the goal was to scare up $1 million from small donors, and then match it with $1 million from a handful of do-gooder fat-cats. After Mayday secured $1 million in pledges in under two weeks, six rich people (whom Lessig had sounded out in advance) agreed to collectively match that first million. Today marks the beginning of phase two, in which Mayday will attempt to raise $5 million from small donors by July 4, then find $5 million in fat-cat commitments to match it.

If you happen to care about things like non-rich people having a say in who holds federal office, you should really go make your pledge to Mayday right now. But since I suspect most readers are pretty skeptical at this point, let me take you through the completely hard-boiled, non-utopian case for supporting the project, which roughly amounts to the following: Mayday, or something like it, turns out to be our last best hope for reducing the massively outsized influence of the 1 percent over public policy. 

I arrive at this conclusion by way of some simple armchair-Marxist analysis, which holds that no significant reform can happen unless some very powerful, very rich interest group decides it has a stake in it. Health care reform had the insurance companies; Wall Street reform had deep-pocketed financial institutions, who saw an opportunity to kneecap their less-regulated competitors.

The problem for campaign finance reform is that by definition it’s almost impossible to find a rich and powerful interest group that sees any upside in it. After all, the current system is what makes rich interest groups powerful. Banking, insurance, energy, defense, agriculture, telecom, entertainmenteach one of these industries spends millions or tens of millions of dollars funding political campaigns and hordes of lobbyists and quasi-lobbyists. They enjoy billions of dollars of government largesse in return. This is what’s known in the business as a “pretty damn good deal.”

That would appear to leave your garden-variety null set: No one capable of muscling campaign finance reform into existence has an interest in doing it, and no one with an interest in doing it has the muscle to get it done. But it turns out there’s precisely one very rich industry with enormous cultural and economic influence that may be up for waging this fight: The tech sector.

Why? Partly it’s because most techies are ideologically sympathetic to the mission. Like any good engineer, they tend to believe that government meddling only slows innovation while breeding corruption and inefficiency. “What they hate about Washingtonand the quintessential example is the mobile telephone platform in the 80s and 90sis if you want to do anything you have to buy permission,” says Lessig.

But mostly this is a basic point about political economy. The tech sectorparticularly the consumer-facing portion that Google and Facebook now epitomize, but which includes hundreds of wealthy companieshas become incredibly rich and powerful without developing much of a relationship with Washington. To this day, with only a few prominent exceptions, it isn’t super adept at wrangling concessions and defusing threats from government. As a result, has a lot more to lose from Washington than to gain.

By contrast, the tech industry’s competitors have highly effective, industry-wide armies of special pleaders (think of Hollywood and the music industry during the online-piracy fight, or the telecom and cable companies during the net neutrality fight), which ensures they have much more to gain from Washington than to lose. In the eyes of many tech executives, then, government is a preposterously powerful weapon that can be wielded against them by hostile forces, with no corresponding opportunity for them to do the same. They can immediately appreciate the logic of blowing the system up.

The genius of Lessig’s Mayday approach is that it’s perfectly calibrated to capitalize on this mindset. Beyond the appeal of what I’ve just described, it’s precisely the kind of pitch tech-world financiers are comfortable embracing. “The mentality of Silicon Valley when it comes to making investments is that it’s a low probability it’s going to pan out. But if it pans out, it changes the world,” Lessig told me. “You just have to have a way to make it plausible for them.” Even the mechanics of Lessig’s fundraising process mimic the way a start-up attracts financial backers: First build your website and collect a bazillion eyeballs (Lessig rounded up over 11,000 small donors in 12 days in May), at which point the moneymen consider your idea validated and open their wallets.

And so it’s no surprise that the seven fantastically rich people who matched Lessig’s first $1 million were all tech moguls: Peter Thiel (of PayPal and Facebook fame), Reid Hoffman (LinkedIn), the venture capitalists Brad Burnham and Fred Wilson, Joanne Wilson (Women Entrepreneurs Festival), Chris Anderson (TED), and Vin Ryan (Iron Mountain). (David Milner, of the private equity firm NuGen Capital Management, matched the nearly $200,000 that came in above the $1 million threshold in May.) If Mayday raises its next $5 million this month, it will almost certainly be a consortium of tech moguls that cobbles together the next big match.

The big caveat in all this is that the window is rapidly closing. The richer and more powerful Google and Facebook and their ilk become, the more they will invest in gaming the current system, and the less enthusiasm they will have for defunding it. Already, the leading moguls in Silicon Valley have joined forces to launch an industry-wide political-advocacy group. Though the initial cause is immigration reform, more causes and groups are surely imminent, many of them substantially less noble. Google, for its part, has made its peace with the Washington model of influence-peddling. And while many other companies, like Airbnb and Uber, rail against the regulators and pols they see as tools of established industries, at some point soon they too will learn how to coopt government rather than fight it, and the game will be over.

In fact, we may not even have till then. Today, there are dozens of billionaires walking around Silicon Valley thanks to their stakes in companies with insanely high valuations. When the tech bubble bursts, as it inevitably must, there’s going to be a lot less money sloshing around for extracurricular adventures like a campaign-finance super PAC.

All of which is to say, we don’t have a second to waste here. Campaign finance reform is theoretically the key to anything else you’d want government to do (or not do, as the case may be). As Lessig puts it, it is the reform without which no other fundamental reform is really possible, since without it you’re stuck in the world buying off powerful, self-interested actors to get anything done, which inevitably mucks things up. So we’re staring at the most important cause in politics, and an enormously powerful potential ally. It would be a crime to let the moment go to waste.

 

Loading Related Articles...
The Plank
Article Tools