June 20, 2014
Signalling and MayDay PAC
There's a fascinating signalling opportunity going on with US politics. As we all know, 99% the USA congress seats are paid for by contributions from corporate funders, through a mechanism called PACs or political action committees. Typically, the well-funded campaigns win the seats, and for that you need a big fat PAC with powerful corporate wallets behind.
Lawrence Lessig decided to do something about it.
"Yes, we want to spend big money to end the influence of big money... Ironic, I get it. But embrace the irony."
So, fighting fire with fire, he started the Mayday PAC:
"We’ve structured this as a series of matched-contingent goals. We’ve got to raise $1 million in 30 days; if we do, we’ll get that $1 million matched. Then we’ve got to raise $5 million in 30 days; if we do, we’ll get that $5 million matched as well. If both challenges are successful, then we’ll have the money we need to compete in 5 races in 2014. Based on those results, we’ll launch a (much much) bigger effort in 2016 — big enough to win."
They got to their first target, the 2nd of $5m will close in 30th June. Larry claims to have been inspired by Aaron Swartz:
“How are you ever going to address those problems so long as there’s this fundamental corruption in the way our government works?” Swartz had asked.
Something much at the core of the work I do in Africa.
The signalling opportunity is the ability to influence total PAC spending by claiming to balance it out. If MayDay PAC states something simple such as "we will outspend the biggest spend in USA congress today," then how do the backers for the #1 financed-candidate respond to the signal?
As the backers know that their money will be balanced out, it will no longer be efficacious to buy their decisions *with the #1 candidate*. They'll go elsewhere with their money, because to back their big man means to also attract the MayDay PAC.
Which will then leave the #2 paid seat in Congress at risk ... who will also commensurately lose funds. And so on ... A knock-on effect could rip the funding rug from many top campaigns, leveraging Lessig's measly $12m way beyond its apparent power.
A fascinating experiment.
The challenge of capturing people’s attention isn’t lost on Lessig. When asked if anyone has told him that his idea is ludicrous and unlikely to work, he answers with a smile: “Yeah, like everybody.”
Sorry, not this anybody. This will work. Economically speaking, signalling does work. Go Larry!
Posted by iang at June 20, 2014 01:34 AM | TrackBack