Asymmetry in Class Theory

In following up on Lessig's attempt to convince libertarians that public financing of elections would take the asymmetry of money out of politics and enable a more libertarian outcome, I realized that a lot of people, including Lessig, libertarians at Cato, and the group here at FreedomDemocrats, all agree on the big picture "why" of how politics gets captured by special interests. But there is disagreement on the "how" and that "how" is very important in coming up with prescriptions for change.

At its core, the problem is asymmetry among the classes and various special interest groups. There is a mutual understanding at this point about the combination of concentrated benefits and distributed costs. That's a foundational axiom that we all seem to be working from.

But how? Lessig argues that this incentive structure encourages the wealthy elite to hand out lots of money to lobbyists and campaigns. They buy the influence they need to get the policies they want. Take the money out and the system breaks down.

Cato and others argue that it isn't about asymmetry in money but asymmetry in information. The average voter doesn't understand what is going on about these backroom deals being cut. The Congressman and his staffer aren't being told the whole story by the lobbyists presenting the case for policy X or policy Y. And there's not really an incentive structure in place that rewards staffers or Congressmen who search for the truth.

But the more you lower the barriers to information through an open and transparent government, the more you bring public attention and outrage to these deals. New technology like the Internet is great for providing sunshine in these situations. And it creates a new medium to inform people that isn't dependent on the media elite that may also have an interest in misleading voters.

I think the asymmetry in information is the how, not Lessig's asymmetry in money. Congressional staffers are underpaid and overworked. They are heavily dependent on lobbyists for information. There is something of a prisoner's dilemma set up in which one single member of Congress bucking the special interests won't change anything, so why bother? The asymmetry in information would ensure that the people who want the concentrated benefits would know about the vote, but the wider public probably wouldn't care or even know. It's a no win situation.

But I don't know if the prescriptions from Cato are enough. What are your thoughts?

okay, I'll indulge myself and post a comment on something other than the reorganization of the site (my feedreader won't unsubscribe from the FD RSS feed, so I end up seeing the blog posts).

Anyway, not having read the linked stories, I'll just say that I agree that information asymmetry is the core. I think that the money asymmetry mainly matters because of the information asymmetry--money is used to gather/distribute information that serves one's own interests.

Transparency could help, but it doesn't address the virtual bribing of politicians with plush gigs after they leave office. It also doesn't address how money/information plays a role in organizing large numbers of voters during elections. Many congressmen have to convince millions of voters to show up at the polls and cast their vote for him, and they have to do this in the face of the "split vote" (i.e. wasted vote) problem. That's a massive organizational challenge.

Obviously lower barriers to information are a good thing, but I do wonder how far in terms of transparency demand lags supply. Beyond not understanding out of lack of information on the details there's also the factor of interest. Could it be a long run matter of more people paying attention simply because it becomes easier to do so, or would some other cultural shift be involved?

As for money vs information, it shouldn't be a surprise that a few who get paid millions on the basis of how policy shakes out tend to know more about it than a large amount of people unknowingly footing the bill. The two reinforce each other to an extent.

progressives often argue that "prisoner dilemmas" in the provision of public goods underlie the rationale for monopoly government; I argue the converse of sorts, that the bad incentives of monopoly government--which you have laid out--create a prisoners' dilemma for the delivery of "good government." That is to say, "Good Government" itself is a "public good."

Information asymmetry underlies why for voting is a type of public good. But even so, the Arrow Impossibility Theorem demonstrates that generally no collective or community preference can be derived from individual preferences. In this sense, then "good government" is therefore not really one that reflects collective preference, since there really is no such thing for the most part(with the exception of smaller groups with a strong social commonality), but rather one where (political) agents must bear the consequences of bad decisions. To me, this is clearly not a money asymmetry problem, where the solution is to deny campaign contributions. I laid out in my original post why libertarians would be cutting their throats to support public financing.

Another information problem arises from how the state attempts to engage in central planning. The system they are trying to organize (the American economy/society) is big and complicated, so you need a massive investment in information gathering and analysis just to know what is going on...to the extent that it is possible to know. Then, the government itself is big and complicated, and it is involved in myriad decisions/actions that are far removed from the average person. I don't think that it is feasible for regular people to have any meaningful understanding of what the government is doing, even if they do know what it should do.