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14 March 2013

Sorry, but the internet won’t save us from the lobbyists

Every year US taxpayers shell out $2 billion in subsidies to cotton growers. This might be preferable to the old way in which plantation owners got people to work for them, but it's hard to see how the subsidy regime benefits anyone other than the recipients.

Thanks to the efforts of the National Cotton Council, the regime stays in place, which leads Jonathan Rauch to ask a very good question: Where is the counter-lobby? Why is there no National Anti-Cotton Council? In a fascinating article for the American, he seeks to enlighten us:

  • “In 1965, a young University of Maryland economist named Mancur Olson... formulated a crucial part of the answer in his book The Logic of Collective Action. To organize a group is costly for the organizer in money, time, and energy. Constituencies with narrow, focused interests can surmount that problem more easily than can constituencies with broad, diffuse interests, because the broader group will have more of a problem with free riders: people who sit back and let others do the hard work of organizing while expecting eventually to partake of the booty.”

The cotton lobby, Rauch says, is a “classic narrow interest”:

  • “Because big cotton farms account for a large share of output, the largest 5 percent of recipients collect more than half of subsidy benefits and the largest 20 percent collect more than 80 percent... In 2010, the biggest 1 percent of farms collected almost $175,000 each. That is a lot of money — well worth organizing for…”

On the other side of the equation, there are ten of millions of people who pay just a few dollars per head to fund the subsidy. And as Mancur Olson wrote – “the larger the group, the less it will further its common interests.”

Fortunately, there is a counter-dynamic at work in society. Large and diffuse interests group such pensioners and consumers can acquire powerful defenders in the form of political parties and media organisations. Politicians and journalists obviously have their own agendas, but because they need voters, members, readers and viewers, they have an incentive to represent the many not the few.

This is an often overlooked, but vital, justification for competitive party politics and a free press. It is argued in some quarters that the so-called ‘authoritarian capitalism’ practiced by emerging powers such as China allows things to get done in ways that are impossible in the west. But however ‘efficient’ such a system might be at the outset, there is nothing to stop narrow-interest groups from parasitising it.

Of course, political parties and the mainstream media aren’t exactly faultless in the service they provide. Furthermore, thanks to new technology it is becoming easier for citizens to by-pass their traditional advocates and organise their own lobbies:

  • “...the cost of organizing has dropped by orders of magnitude. Just think about what a single Facebook page can do. The Tea Party, the archetype of a diffuse-interest group, could never have reached escape velocity without free online conference calling…”

So, will internet-based citizen politics mean victory for the common good over each and every predatory interest group? The answer to that is no and, with so much mindless internet boosterism floating around, it’s important that we understand why. 

Technology makes it easier to organise large numbers of people, but only when their own best interests are staring them in the face. That's a problem when our own best interests aren't always that obvious to us – perhaps because the issue at stake is a complicated one or because what we want right now isn’t the same as what we need in the longer-term. 

There’s no better example than the debt bubble of the last decade. The technical complexity of the banking reform that could have diffused the situation didn't exactly lend itself to populist 'e-politics'. Moreover, at the time, easy access to cheap credit was all too popular. The sophisticated analysis and foresight that could have averted the disaster was too much for our dumbed-down politics and media, and certainly too much for a Facebook campaign.


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