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Rick Pollack · On Trust
November 19th, 2008
Perhaps someone can explain this to me…
Here are a couple of very interesting videos of Lawrence Lessig discussing problems with Congress – essentially the influence of money on policy. Money + Congress = Mistrust (or worse).
(20 minutes)
(1 hour)
In the first video Lessig goes through examples of money interfering with solid policy and I agree with most of what he says. One of the items eluding me is this:
On the one hand Lessig says that when our congressional representatives receive funds from corporations or special interest groups, it does not mean there is corruption but there is certainly the appearance of impropriety. Money destroys the conditions for trust. Money destroys trust.
He goes on to discuss global warming policy. Gore is now a venture capitalist investing in green technology and as far as I can tell he intends to profit from these investments. How can you on one hand say that money yields mistrust and then cite an example where the standard bearer clearly stands to receive economic benefit from promoting a cause?
These venture capitalists are making investments with the expectation of receiving returns on their investments. If they are so concerned about the environment, why don’t they loan the funds, put a cap on their return or not even take a return? Lessig points out (in the second video) that since Wikipedia does not allow any advertising, they leave ~$100,000,000 of revenue on the table. Wikipedia does not allow advertising specifically to avoid any taint of quid pro quo.
Gore is a private citizen and free to make investments as he sees fit. However, when you are the standard bearer regarding global warming and your message is that we need to make massive changes now, yet you are also positioned to profit from these changes, how is that not, at least, the appearance of impropriety?
From Al Gore’s next act: Planet Saving VC (Fortune 02/12/08):
They argue that to halt global warming, nothing less will be required than a makeover of the $6 trillion global energy business. Coal plants, gas stations, the internal-combustion engine, petrochemicals, plastic bags, even bottled water will have to give way to clean, green, sustainable technologies. “What we are going to have to put in place is a combination of the Manhattan Project, the Apollo project, and the Marshall Plan, and scale it globally,” Gore continues. “It’d be promising too much to say we can do it on our own, but we intend to do our part.”
“Doerr understands the complexity of what’s ahead. Most venture capitalists are judged on return on investment alone. Asked how he’ll judge the success of the green initiative, he reels off five measures: “the company we keep, the quality of the companies we help grow, the quality of the partners we add, returns on the investments we make, and by the CO2 that’s taken out of the atmosphere.”
I don’t see how this can be glossed over…
—
Lawrence Lessig, a professor at Stanford Law School, is a leading thinker on technology and Internet policy. He is the founder of Creative Commons and author of Code, The Future of Ideas, and Free Culture.
Last 5 posts by Rick Pollack
- Open Fabrication - Part III - November 12th, 2009
- Open Source Digital Fabrication - Part II - August 11th, 2009
- The Desktop Manufacturing Revolution (Fast Company) - July 15th, 2009
- Would you like to be able to do this? - July 14th, 2009
- Open Source Digital Fabrication - July 9th, 2009
November 20th, 2008 at 3:32 pm
Rick, there have been attempts to control the role of money in politics nearly every year for my entire adult life. The attempts are usually Congressionally led and responsive to the last election cycle: what advantage did the other party gain under the current rules that the other party now wants to rein in.
Pardon me for being cynical, but none of these rules really work. Politicians find loopholes and ways around them, just as businesses find loopholes and ways around regulations, and individuals organize their finances to minimize taxes. It’s in the nature of humans to optimize whatever rules are in place to their own benefit.
When the role of money is being discussed in politics, the fingers are usually pointed negatively at corporations and their lobbying organizations, as you have done by focusing on Kleiner Perkins. This ignores the fact that there are equally well-funded and powerful lobbies for non-business groups, like environmentalists, pro-abortion advocates, and labor unions. Their role in distorting legislative decisionmaking is as sigificant as the role of corporations.
Witness the current discussion about rescuing the auto industry. Congress is faced with having to placate both the UAW and the environmental lobby. The UAW wants taxpayer money to subsidize the generous wages, benefits, and pensions paid to UAW members. At the same time, the environmental lobby doesn’t want to divert the already approved $25 billion loan package for producing clean cars to the short-term rescue of Detroit. This is why Congress is deadlocked on the issue; they can’t easily placate both the UAW and the environmental lobby.
One solution that is often discussed to reduce the role of money in politics is public financing. Each citizen would pay something small, and the aggregate would finance campaigns and leave them free of the undue outside influence of large donors.
There are many problems with public financing of political campaigns. One is that it greatly favors incumbents, who can use their existing positions to obtain free media coverage and thus overwhelm the messages of challengers. Another problem is that the pool of money so collected would undoubtedly become a slush fund for politicians to use in ways not originally intended. A third problem is that citizens like me would object to being compelled to contribute to such a fund.
At the end of the day, I believe that any individual or organization should be allowed to donate any amount of money to any cause or politician that they want to. The one requirement that I would have is absolute and transparent disclosure. It would then be up to the Fourth Estate to do its job in tracking subsequent relationships between donors and elected officials and being watchdogs to ensure that the money doesn’t result in undue influence.
As to Al Gore, he has more problems than just the appearance (and probable reality) of impropriety in his investment activities. He has distorted global warming science to create a political panic for action that could and likely will result in massive distortions of the economy and massive costs to you and me. The sooner he shuts up, the better off we will all be.
November 20th, 2008 at 8:14 pm
Jonathan, thanks for the thoughtful response…
I agree with you that the rules don’t work and I don’t believe they will work for the reasons you stated. I wasn’t pointing a negative finger at Kleiner Perkins – rather I was questioning the context of Gore being a position advocate and also standing to profit off that position – I was not generalizing.
Also, I don’t think we can rely on the Fourth Estate to ensure transparency, the accounting and editorial aspects are too tightly intertwined. The path forward involves getting a LOT more of the population up to speed on issues so that BS (biased, wrong, etc) laws and regulations can’t slip through like they currently do.
Concerning your last paragraph, the subject is so emotionally charged that it is nearly impossible to discuss, especially in a public forum. Hence, I am solely asking about the apparent inconsistency. I am generally a fan of Lessig but I don’t see how he can question the influence of money on congress in one section and then state that environmental policy is clear but it is ok for Gore to profit. Whether or not you agree with Gore’s environmental position, how is this not the same basis for mistrust that Lessig spends so much time discussing related to congress?
November 21st, 2008 at 2:21 am
Rick, the Fourth Estate more broadly, would include citizen bloggers and informed citizens generally.
The type of lobbying that Gore does is cynical and self-serving–pretty much like all the other lobbying that other people do. It’s all the same to me. One hopes, fruitlessly, I fear, that legislators will be able to balance the perspectives and come up with policies for the common good.
On the whole, I think we do better with gridlock.
November 21st, 2008 at 1:43 pm
Blah, blah, blah…Congress in three words. The piggybank is broken, so when do we stop Congress from spending our money, before it can even be our money? No, instead, WE have to apply and beg at congressional hearings to get it back in the form of appropriations and through grant applications. I am so tired of it.
November 22nd, 2008 at 2:27 am
lmcshane, agreed. The solution is to limit their access to our money.
November 22nd, 2008 at 7:39 am
How do we stop local leadership from feeding on the bloodsucking cycle? Haven’t you noticed that our local strategy is the wait for everything to fall apart, so that we qualify for state and federal funds? It’s pathetic. Sorry–it was a bad day. It is disheartening to see seniors lined up to apply for food benefits at the Brookside Center…
November 22nd, 2008 at 8:56 am
The money is coming from a federal grant intended to help Ohio upgrade its drunken driving enforcement. Since 2005, Ward led a work group that tested and determined what equipment to buy…
http://blog.cleveland.com/openers/2008/11/senator_wants_to_rethink_purch.html
November 22nd, 2008 at 8:58 am
$6.5 million…