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The Power of Political Disintermediation

· June 12, 2012

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Yesterday, Congressman Darrell Issa (R-CA) and Senator Ron Wyden (D-OR), the bipartisan team that spearheaded the fight against SOPA/PIPA, announced the expansion of an initiative–Project Madison–that aims to “disrupt” politics as usual in D.C.  Seeking to use the power of the Internet to tap expertise and opinions from all over the country to provide input on proposed legislation, the little known legislative crowdsourcing initiative embraces the platform-developer model that has proved so successful in the Internet-era.  As TechCrunch explains:

The technology isn’t built yet, and Issa will be looking for savvy developers who know how to parse legislative text into a readable format, as well as build out user experience.

Traditionally, the political process impedes disruptive innovation as legacy firms with Washington lobbying offices and political connections hold a disproportionate influence over the policymaking process.  Simple political science explains this seemingly intractable phenomenon:   Beneficiaries of innovation either do not see the benefit or do not have the resources to overcome the transaction costs necessary organize and advocate a legislative and regulatory agenda in D.C.  Furthermore, many of the benefits of innovation are dispersed to the society at large and the costs largely accrue to the legacy industries who are displaced.

Machiavelli (perhaps not the best PR spokesperson), the consummate realist, summed up this dynamic succinctly:

[I]t ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.  Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.  This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them. Thus it happens that whenever those who are hostile have the opportunity to attack they do it like partisans, whilst the others defend lukewarmly….

(This is largely the same dynamic that often works against free trade.  It is almost universally accepted among economists that free trade is a net win for society.  However, the industries that are displaced by free trade have much to lose and lobby aggressively against it, whereas the average consumer who would realize the benefits from lower costs and increased choice is largely absent from the political debate.  Furthermore, the corporate entities who will benefit most from free trade are often smaller and less well organized than the industries already being protected.)

For example, a dynamic, open Internet makes lots of people happy, lowers the cost of doing business and empowers entrepreneurs.  Traditionally, it is has been much easier for established industries directly threatened by the Internet to turn the tide of the Washington debate than it is for the disperse masses of Internet users.  Perhaps that is beginning to change. The very same way the Internet is helping eliminate the middlemen in music (or video, travel agencies, etc.) it is also beginning to disintermediate traditional political power brokers.

Project Madison attempts to help solve classic political science problem described earlier (concentrated benefits vs. dispersed costs = political establishment works against the public good).  By bypassing the traditional intermediaries, such as lobbyists and political parties, this project holds great promise to skew the legislative process a little more towards the side of innovation and the public good.  Obviously, it will take some time to see whether this catches on and how much power it will ultimately yield, but the promise of this approach should not be ignored.

As a “D.C. insider” who fought against SOPA/PIPA for months, I was in House and Senate offices on January 18, when the Internet blackout sparked a firestorm and overloaded the congressional phone circuits. It was an amazing sight.  Politicians who had once largely outsourced decisionmaking on seemingly esoteric intellectual property issues to the well connected D.C. establishment (in this case, the RIAA, MPAA, and IIPA) realized that a lot more people cared about copyright issues than they once thought.  Internet enthusiasts were given channels to easily connect with their representatives in D.C. through popular websites, such as Reddit, Tumblr and Wikipedia (i.e. these websites linked to Internet applications that allowed users to click a button and contact their Congressional representatives directly).  This exercise in political disintermediation turned the tide of the SOPA/PIPA debate and led to the fastest political turnaround for a piece of legislation in modern history (In the previous Congress, COICA, the predecessor to SOPA/PIPA, was approved by the Senate Judiciary Committee by a vote of 19-0).

If successful, Project Madison and similar efforts could allow continued engagement between politicians and the public that might help avoid the crisis politics that characterized the SOPA/PIPA online backlash.

Innovation

New technologies are constantly emerging that promise to change our lives for the better. These disruptive technologies give us an increase in choice, make technologies more accessible, make things more affordable, and give consumers a voice. And the pace of innovation has only quickened in recent years, as the Internet has enabled a wave of new, inter-connected devices that have benefited consumers around the world, seemingly in all aspects of their lives. Preserving an innovation-friendly market is, therefore, tantamount not only to businesses but society at large.