Stand Up for Liberty! Table of Contents
Stand Up for Liberty!
Chapter Twelve
Marketplace of Ideas: Practical Methods
It's all well and good to say that a marketplace of ideas is fundamentally superior to socialist central planning of the intellectual marketplace. How in practice do you set up a marketplace of ideas? Ideas, after all, are the one commodity that ignores the law of supply and demand: If someone takes one of my ideas, I still have the idea, and the taker can make my idea more valuable, not less valuable.
In a certain sense, the market will provide. If there is sufficient demand for a product, namely a marketplace of ideas, that product will reach the market more or less as soon as it is physically and financially possible to do so. However, before a product reaches the market, it has to be invented. Volunteer fire departments and private lending libraries were wonderful innovations, but they had to be invented -- American libertarian Benjamin Franklin played a major role -- before they could be marketed.
This section described projects that an entrepreneurial Libertarian or Libertarian group could envision bringing to market. We and our fellow Libertarians will create projects and groups such as the ones that I have described. We'll let them compete for resources. By doing this, we shall create the marketplace of ideas.
I am giving examples of possible projects, so you get an impression what a project is. I am not giving a complete list. Central planning loses to the market when Washington bureaucrats are planners. Central planning still loses when I am the planner. Our thousands of Libertarians are far more clever than I am. When we create the marketplace of ideas we'll give every idea its chance to compete.
This section focuses on practical schemes that actually implement a marketplace of ideas. The next session focuses on the other half of an efficient market: schemes that permit informed investment rather than blind investment.
Every Libertarian does not have the time or resources to track every political campaign in the United States. Similarly, every Libertarian cannot evaluate every project that might advance the cause of Liberty. The number of Libertarian campaigns is large. Every election cycle, the number gets larger. How can an individual Libertarian choose which campaigns to support? How can an individual Libertarian choose which political projects to assist?
How have Libertarians chosen campaigns in the past? Many of the same answers apply to political projects.
The two simple campaign choices are (i) Keep your money at home! Invest in local candidates! and (ii) Help float the biggest ships in the ocean, the national Libertarian Party in Washington and the quadrennial Presidential campaign. Libertarians have had these choices since the Party's founding. One choice keeps money where the giver can see it. The other choice sends the money all the way to the top. Both choices are in principle effective ways to Stand Up for Liberty! The exact effectiveness of each choice depends on how well the money is spent.
Are these the only choices? The other major parties believe that some campaigns are more important than others. They focus their investments. The campaign for Governor of California or Senator from North Dakota gets money from across the country because that campaign has national consequences.
In recent election cycles, one or two Libertarian campaigns have done successful fundraising beyond their district. A recent example is the 1998 campaign of Murray Sabrin, who was our candidate for Governor of New Jersey. Sabrin raised money from Libertarians across the country. His campaign had a unique sales pitch: if the Sabrin Campaign raised enough money in small contributions, Sabrin would get to debate his opponents. Making that pitch, Sabrin's campaign raised hundreds of thousands of dollars from Libertarian donors. In 1996 many Libertarians also invested in the Michigan State Representative campaign of Jon Coon. The Coon campaign was massively funded. Coon spent $110,000 while the Democratic incumbent spent $55,000. A token Republican challenger spent nothing on his campaign. Indeed, the Republican campaign was launched at the last moment to siphon votes away from Coon, using a candidate who had run in the past and was very well known. Despite a 2:1 advantage in spending, Coon received 16% of the vote. The Democratic incumbent got 68%; the token Republican roughly tied Jon's vote total, finished at 16%.
There has since been extensive discussion of the Coon campaign. Should the result have been expected in advance? Might a different spending plan have worked better? Is it simply hard to beat incumbents? Defenders and critics of the campaign and advocates of each answer to these questions go on at great length, demonstrating the value of strategic analysis.
Given a small number of choices, individual Libertarians are able to identify the campaigns they want to support. Sometimes they have been happy with the results. Sometimes they have been less happy with the results.
However, in each election cycle there are many Libertarian candidates, few of whom have any money. In the 1998 election cycle, only two dozen or so of the potential 435 Libertarian candidates for United States Congress raised enough money that the Federal Elections Commission required them to file financial reports. Our half-dozen best-funded Congressional candidates raised around $10,000 each. The total raised by all of our 1998 Congressional candidates was under a third of the money raised by the Sabrin campaign.
Was the Sabrin campaign the right focus for our efforts? Would we have done better if we had funded two dozen Congressional races? Should we have instead supported races lower down the ballot? Ballot access is relatively easy in New Jersey. Instead of funding a Governor's campaign in one state and a State Representative campaign in another state, would we have been better off to make sure that a full slate of State Representative and State Senate candidates were running under Sabrin's wings?
The answers to these questions are not immediately obvious. There are ways to look for answers: Polling. Post-election campaign analysis. Political strategy. It is by no means certain that quantitative analysis will tell us what we want to know. Political forecasting and strategy is as much an art as it is a science. Besides, few Libertarians win their elections. It is not always obvious why some campaigns succeed while others fail. Polling is not cheap. There is a cost to radio ads, hiring consultants, and doing fundraising mailings; there are also costs in doing analysis. I support doing analysis, so we learn from the past rather than hoping we can ignore a quarter-century of Libertarian defeat. I also support analyzing the cost of analysis. Chapter 14 on information management discusses analysis and how to learn from experience.
From the standpoint of a working marketplace of ideas, one observation stands out. I am not in any sense faulting the Sabrin or Coon campaigns for their efforts. The campaigns were entirely honest about what they were trying to do. However, after the election was over, it appeared to me that some Sabrin and Coon donors wished that they had asked a few more questions before supporting either campaign.
These problems are not the fault of honestly-run campaigns that openly present their plans and objectives. The problems are also not the fault of the Libertarians donors, few of whom are political professionals who spend their time thinking about these questions. The fault lies with an under-developed marketplace of ideas in which investors have highly imperfect information.
In conventional economic theory, a standard assumption is that the market as a whole has perfect information. Inside trading regulations are a response to perceived consequences of imperfect distribution of market information. Investors are regularly counselled to avoid situations in which they personally lack good information. Purchase of a private home or AAA-grade bonds requires less specialized knowledge than, say, speculating in cattle futures. The market may have virtually ideal language, but you can still be totally ignorant.
Clever investors have found ways to beat the limitations of imperfect knowledge:
Instead of choosing stocks themselves, clever investors buy a mutual fund whose investment targets and potential risks match their interests and comfort levels. Mutual funds have important advantages relative to other investment devices: They have a well-defined track record, so you can determine how a fund's policies have served investors in practice. They are run by full-time investors, so buying their shares hires you the full-time thinking of an expert at a small fraction of his full-time salary.
Instead of investing in start-up firms directly, clever investors invest in consortia. They give their money to investment bankers who spend their whole life choosing start-up firms. Investment bankers have track records. You can determine what areas they target, and how good they are at choosing their investments.
Instead of launching their own company, clever investors buy stock. They put the money that they can afford in a firm and watch how their investment is handled.
Fortunately, it appears possible to transplant financial investment tools to the marketplace of ideas. Nothing proposed here will stop you from picking your own target campaigns. Nothing proposed here will stop you from launching your own project. I am proposing new ways to support the Libertarian movement, but the old ways will still be ready and waiting. You can still donate to your national Party, state Party, or local association. You can still donate to your choice of local, state or Federal candidates.
Method: The Unified Collection Plan
There are substantial overhead costs (fund-raising, accounting, reporting) associated with launching an individual political project. One way to reduce these costs to spread fundraising and bookkeeping costs over several projects. Under the Unified Collection Plan, a single support organization provides their members and donors with a description of each proposed project, who is running it, what it will do, and so forth. The supporting organization then receives donations, establishes notionally separate accounts for each project, distributes money to those accounts as directed by the individual donors, and disburses money to match project expenditures.
Supported projects must satisfy several criteria. Their support must be consistent with local campaign finance laws. The supporting organization needs a single contact with each project, the contact relaying spending requests from the project to the support organization. As a financial safeguard, supported projects may not spend money from the Unified Collection Plan accounts until they have been given the money by donors. A variation on this plan has been established by the Pennsylvania State Libertarian Party. This variation supports the Libertarian Strategy Caucus and its newsletter Libertarian Strategy Gazette.
How might donors allocate money to specific projects? The support organization mails project proposals to subscribers. The mailer has a return envelope with check boxes, allowing donors to specify how much of their donation is going to each project. For example, a state party might have projects for running Operation Politically Homeless booths, college organizing, strategic planning, fundraising, membership recruitment, and general advertising. The donors fill out their checks and fill in the boxes.
A wide variety of legal restrictions, some different in each state, affect whether or how this scheme can be used to support individual candidates for office. Recent advances in e-Commerce, in which donors can make payments by credit card over the internet, simplify compliance. Each donation can be directly routed to the appropriate campaign fund, potentially avoiding the suggestion that the support organization is improperly functioning as an unregistered political action committee.
Several questions arise at this point. For example, how is the supporting organization supposed to pay for its own expenses? Clearly, it could raise funds specifically for fundraising. It could also levy a service charge -- honesty requires that the service charge be revealed to donors -- on each donation. Guaranteeing that the stated service charge was a maximum and that only costs would be recovered will reassure readers. An analysis that compares the guaranteed maximum expense rate of your support organization with the huge effective overhead rate of some fundraising plans -- which may show millions raised, but only hundreds of thousands spent on actual campaign advertising -- should be well received by informed donors. Many state parties publish their own newsletters. A Unified Collection Plan run through a state newsletter, the return envelope bundled with the newsletter, might have very low marginal costs.
Serious conflict of interest questions arise if the state organization both acts as a support group and also supports individual projects from its general funds. In this case, the same group is collecting restricted funds for the use of specific projects, and is also collecting general funds that can be used to support any project. Are these activities legitimately separated?
This conflict of interest question has arisen before. Some charitable appeals allow individual donors to specify how their donations should be allocated, but also accept and distribute unrestricted funds. A subtle conflict of interest issue then arises. If restricted funds are ignored while the appeal's governing body allocates unrestricted funds, so unrestricted funds are given to projects as though there were no restricted funds, then no difficulties arise.
However, general funds could also be distributed to projects while taking into account how much restricted funding was received by those projects. A project that was especially effective at raising restricted funds might find that its allocation of unrestricted funds had therefore been selectively reduced. This process for allocating unrestricted funds reduces the collection of restricted funds to a sham. The restricted funds are indeed being collected, but unless most money is restricted the donors have no say in how money is spent. The allocation of restricted funds by thoughtful donors is simply cancelled by the general fund allocations, so the body that allocates the unrestricted funds effectively controls every penny of funding.
Sham collection of restricted funds to support specific projects, with the intent of using general funds to nullify the choices of restricted fund donors, cannot be kept secret. When such a policy becomes known, the fundraising ability of the support group collapses. The restricted fund donors start giving directly to their choice of projects. The former general fund donors question the honesty and integrity of the support group and stop giving. In order to avoid this difficulty, which has disrupted fundraising by some major charities, the body operating a Unified Collection Plan must abstain from raising money other than for its internal operating expenses. In particular, the body must not raise money that it directly allocates to its recipient organizations.
Method: Advisory Services
If all else fails, you can invest in an advisory service. An advisory service does not give any money to candidates. It does not even urge people to vote for candidates. Instead, an advisory service sells cheap subscriptions to its campaign analysis newsletter. A campaign analysis newsletter is a lot like a stock-picker newsletter. Instead of identifying the next Microsoft or the most secure corporate bonds, a campaign analysis newsletter tries to identify potentially winning candidates and projects most likely to build a Libertarian future.
A good advisory service finds the Libertarian Jesse Ventura. A poor advisory service misdirects the investments of its readers. By creating competition between different advisors, rather than funding a central bureaucracy, we sort out who is best able by art or science to identify winning ideas. We also reduce the likelihood that funds get spent on advisory services rather than actions. A mutual fund with a very high expense ratio often has trouble competing with funds with low expense ratios. Equally, an advisory service with high expenses for advising -- unless it does something very clever with its money -- will often have trouble competing with advisory services with lower expenses.
The advisory service has some strong points, and some weak points. Because an advisory service does not advocate electing anyone to office, and does not give money to campaigns, it is largely exempt from campaign financing laws. It can report on any campaign or group, anywhere in the world, under the protection of the First Amendment.
The strength of an advisory campaign is also its weakness. The advisory service does not send money to campaigns. It does not make gifts in kind to political campaigns. Money flows from donor to campaign only when the donor actively writes the check or provides the volunteer effort for the specific campaign she supports. If the donor is busy that month, the volunteer time does not happen. If the donor is momentarily short of cash, checks do not get written. Advisory services work for people who are prepared to set aside money until it is time to give, and have donation targets for the year. Advisory services do not work for the person who reaches April 16, notes what the folks in Washington did to his bank account, and wants to do something about it Right Now! by writing one check.
Method: Political Action Committees
Political Action Committees (and similar associations such as 527 groups) are the political equivalent of a mutual fund. You give your money to the committee, and the committee figures out where to invest its support. How do you decide which committee to support? You study their objectives and past records, just as you study the objectives and past records of mutual funds. By investing in a PAC, you have entrusted your political investment decision to someone else. However, that someone has more time to think than you do, more information than you do, and more experience supporting political activities than you do. There is a possibility that the PAC will invest your money better than you would have.
Political Action Committees must obey many legal restrictions, different for each state and campaign. In general, political action committees cannot legally give a single campaign huge amounts of money. However, at this time most Libertarian campaigns can't readily use vast infusions of cash. What most Libertarian candidates really need is practical technical support.
Technical support? At the simplest but most important level, one group in each state needs to prepare a "candidate support kit" telling erstwhile local candidates what to do to run for office. The kit should give timelines, instructions on petitioning or whatever for ballot access, and boilerplate letters that a candidate can modify to reflect local issues. The same or a different group in each state can maintain a list of local volunteers and potential volunteers, people that it can steer toward candidates when they become available.
On a more technical level, a political action committee can give prospective candidates bumper sticker and lawn sign designs, record radio ads, supply scripts for political fundraising, and perhaps offer startup funding or a first fundraiser mailing to local Libertarians.
In the future, electronic media will be a key tool. The Internet and the World Wide Web are moving from politically marginal to politically central. Many computer users have Libertarian inclinations. Web sites and mailing lists are tools that help these people learn that they, too, are truly Libertarians at heart. Chapter 14 discusses information management at much greater length.
A Political Action Committee that sent each candidate a package containing a skeletal web site would give candidates a big boost. A skeletal site includes standardized graphics, text, marked blanks to be filled in by the candidate, and links to important Libertarian web sites across America. The same package can be maintained in downloadable form on the Committee web site, but remember: most people only know how to use a few capabilities of their computer. Total reliance on downloads from your site does not replace putting a diskette or CD-ROM on the candidate's lap.
Technical support groups can mobilize incredible resources for individual candidates. You may not know enough html to design your own web site, but plenty of people in the party do. You may not know which neighboring towns have Libertarian candidates, and which neighboring towns have Libertarian volunteers hungering for a candidate to support, but a technical support group can tell you. At our present state of political maturity, technical support for enthusiastic, politically unskilled candidates and their staffs is more effective than money for lawn signs, bumper stickers, and radio ads. With a little help, local people can do their own fund-raising. Local people cannot as readily decide how to design posters, comply with campaign laws, or give a credible three-minute speech.
Technical support will reduce obstacles between Libertarians and the electorate. Technical support will bring "I'm running for office" within reach for large numbers of Libertarians who by themselves would not get on the ballot. Ballot access and effective campaigning may seem simple if you've run for office. For someone who has never Stood Up for Liberty! and been a Libertarian candidate, ballot access can appear unattainable. Technical support will put thousands of competent Libertarians, people who can do the job but who have no idea how to get elected, on the ballot and into office.
There is an unsatisfied market for candidate and candidate staff training. The staff is as important as the candidate. You cannot win without a credible woman or man in front. A candidate running a one-man show is equally unlikely to succeed. The National Party has sponsored single-site lecture events. An interesting alternative effective in other sorts of training is distance learning. Distance learning technologies such as video tapes, video telephones, and internet radio, telephony, and multicasting allow a single group of instructors to interact at the same time with Libertarians at multiple remote sites without onerous travel costs. All these technologies qualify as technical support of candidates.
Political Action Committees don't fall from heaven. If we want successful political action committees, we must Make Liberty Happen! We must start those committees and support them. We must see that those committees effectively support candidates, advertise the Libertarian Party, and promote Libertarian causes.
Special Interest Groups
Separate from political action committees are special interest groups. Political action committees invest in candidates and campaigns. Special interest groups invest in causes. Some special interest groups are tax-exempt 501(c)(3) organizations that fund think tanks and issue studies. Other special interest groups mobilize voters and tell them about issues, without telling voters who to support.
A major strength of the other major parties is that they have surrounded themselves with swarms of special interest groups that appear to support a cause, but in fact support candidates of their party. You can readily find pro-choice groups that support Democrats when their Republican opponents have indistinguishable stands on abortion. You can readily find pro-2nd Amendment groups that support anti-RKBA Republicans over pro-RKBA candidates of other parties. In order to Make Liberty Happen! by attaining a Libertarian political majority, the Libertarian Party needs to surround itself with its own special interest groups. The point is not that America needs, for example, one more anti-tax group, but that the Libertarian Party needs an anti-tax group that is effective at combating taxes and that assists Libertarians. This important issue is so important that I treated it separately in Chapter 10.
This Chapter proposes operational steps towards creating an effective marketplace of ideas. The marketplace of ideas will most efficiently allocate our funds to get us the Alphabet, the Numbers, and the V's we need for Libertarian victory. I have described current approaches in which individual Libertarians Make Liberty Happen! by supporting a candidate or project. I describe alternatives to current approaches, including the Unified Collection Plan, Advisory Services, Political Action Committees, and Special Interest Groups, each of which gives Libertarians alternative ways to support this party and its candidates.
*Thanks to Barb Goushaw, Jon Coon's campaign manager, for details and background information on his race.