The Politics of the Internet – Week Five Overview

1. The Politics of the Internet – Week FiveOverview • How is the Internet affecting domestic politics? • Traditional topics of political science – who wins and loses elections. • Elections in 2004 and 2006 provide some interesting insights – first time that Internet campaigning really took off at national level. • 2008 is too early to predict – but some interesting insights nonetheless.

2. The Politics of the Internet – Week FiveWill the Internet transform politics? • Two weeks ago – how libertarians (on the right) got key aspects of the Internet wrong. • This week – how some on the left (supporters of Howard Dean and the Democratic party) got it wrong in 2004. • But (as with the libertarians) – were wrong in interesting ways, and point to important phenomena. • And to what may work better in this election cycle

3. The Politics of the Internet – Week Five • What are the key ways in which the Internet might affect electoral politics? • Fundraising • Organization • Transaction Costs and Feedback Loops • How did the Internet affect Election 2004 • Dean campaign • MoveOn, Meetup etc • Ultimate results • Lessons for current election

4. The Politics of the Internet – Week FiveFundraising - background • Political fundraising in US politics has traditionally been a vexed topic. • Brings two basic principles of democracy into conflict with each other. • On the one hand – equality of access should create a political system that is open for all. • On other – free speech should allow people to voice opinions – and donate money to causes that they favor.

5. The Politics of the Internet – Week FiveGeneral Parameters of fundraising • Previous history – Buckley versus Valeo set clear limits on the ability of Congress to make laws affecting expenditure on politics. • Supreme Court has privileged freedom of speech over equality of access. • Some limits allowed – but very hard to regulate. • Various efforts to change the system have been stymied.

6. The Politics of the Internet – Week FiveExpanding role of money • Current system provides matching funds to candidates for ‘hard money’ donations up to a certain amount – ( details outside the scope of this class). • But role of money in US politics has continued to increase. • Expenses of organizing, TV advertising etc etc.

7. The Politics of the Internet – Week FiveEfforts to ban soft money • Most recent effort – bilateral reform bill sponsored by John McCain and Russ Feingold • Sought to limit role of “soft money” (money that was raised under less stringent rules). • Banned raising of soft money at national level. • Barred explicit coordination between national parties and ‘527’ independent organizations. • Increased the limits for the amount of ‘hard money’ that individuals could contribute.

8. Results of Campaign Laws • Difficulties for parties in coordinating their message with outside groups. • Difficulty in one part of the party coordinating with another. • Possible for presidential campaigns that have accepted funding to have jointly funded ads with RNC/DNC through complicated arrangements. • But hard to coordinate the content of these ads for legal reasons.

9. The Politics of the Internet – Week FiveEffects on Democrats • Widely predicted that McCain-Feingold was a “suicide bill” for the Democratic party. • Democrats were heavily reliant on soft money donations. • Poor record in appealing to, and getting contributions from smaller donors. • Wide belief that they would get hammered by Republicans in fundraising in 2004.

10. The Politics of the Internet – Week FiveOrganization • Grassroots organization has to some extent been replaced by TV advertising and direct marketing as a means of appealing to voters. • But still retains considerable value. • Allows parties to appeal directly to voters, and to persuade them in ways that aren’t possible on TV • Also to get supporters to polling booths.

11. The Politics of the Internet – Week FiveParameters of political organization • Again, election law shapes possibilities for actors. • Registration drives can use soft money, as long as they are not organized by the parties, do not coordinate with the parties, and focus on getting out under-represented groups in a ‘fair’ manner. • Thus, parties tend to farm out registration drives to officially non-affiliated groups that can more easily raise money.

12. The Politics of the Internet – Week FiveThe Internet and Politics • Both fundraising and organization have been substantially affected by the Internet. • Previously, Internet didn’t play a major role. • What has happened?

13. The Politics of the Internet – Week FiveEffects of the Internet • Internet has had very important effects on politics. • Has changed funding structures. • Easier to raise money from small donors. • Has changed patterns of organization. • New forms of decentralized campaigning • But still, there’s a lot of hype.

14. The Politics of the Internet – Week FiveThe Internet and transaction costs • However, Internet arguably did have very substantial potential consequences for politics. • To see this – we need to understand two underlying concepts - transaction costs and feedback loops. • Ideas from economics and physics respectively.

15. The Politics of the Internet – Week FiveConcept of transaction costs • Transaction costs – the cost of getting information and carrying out transactions. • Sprung from a basic dilemma for economists – why do firms with internal hierarchies exist given the advantages of free markets? • Coase argued that firm hierarchy was needed because some tasks were too complicated for markets on their own.

16. The Politics of the Internet – Week FiveParties and transaction costs • Same argument could be made for political parties. • Why do we have political parties instead of just individual candidates? • Again – transaction costs. Campaigning etc is expensive – so party machines exist in order to lower transaction costs for candidates (and voters). • Party structures have a fair amount of internal hierarchy.

17. The Politics of the Internet – Week FiveLowering transaction costs • But what if something dramatically lowered transaction costs? • The need for much of the hierarchy of party machines would disappear (just as there is less need for old-style multinational corporations than there used to be). • And new entrepreneurs could take advantage.

18. The Politics of the Internet – Week FiveFeedback loops • Feedback loops – when a phenomenon becomes self-generating and self-sustaining. • Example – feedback squeal from microphone/speaker systems. • Has relevance for a wide variety of social phenomena.

19. The Politics of the Internet – Week FiveElectoral winners and feedback loops • In primary system, activists want to support the candidate who is likely to win the primaries and the election, and give them support. • They do this for both selfish and non-selfish motives. • But the problem is – how do you know which candidate is going to win?

20. The Politics of the Internet – Week Five • Sometimes, there is an ‘obvious’ candidate. • But where there is not, feedback loops can very easily develop. • Activists discover that other activists are supporting a candidate. • They then conclude that this candidate is more likely to win, and start supporting him/her. • This in turn inspires other activists to support the candidate – and so on.

21. The Politics of the Internet – Week FiveGenerating feedback loops • Key lesson for candidates: if you want to win the primaries (and to a lesser extent the election) a good way to do it is by creating a self-fulfilling prophecy. • If everybody believes that you are going to win, you are more likely to win. • But doing this has traditionally been very hard to pull off. • And if your reputation for winning is punctured, you may be in trouble.

22. The Politics of the Internet – Week FiveTransforming Campaigning • As in other areas of politics, some have argued that the Internet holds out the possibility of transforming political campaigning. • Can make it more flexible, responsive, and in a fundamental sense, more democratic. • This time, people on the left are making these claims. • But again, truth appears to be more complicated

23. The Politics of the Internet – Week FivePre-history • Internet has only really come into its own in 2004 election. • Previously, there were a couple of examples of Internet based campaigning. • Jesse Ventura – ran for governor of Minnesota using email and text-based discussion. • But, in general, not a major factor in vote-winning strategies of parties.

24. The Politics of the Internet – Week FiveElection 2000 • 2000 elections are a case in point. • Both presidential candidates had websites (as did other candidates for office). • But these played a secondary role. • Set out some of the candidates’ positions, but didn’t really try to engage actively with voters.

25. The Politics of the Internet – Week Five • At this stage, Internet was a key political issue – but politicians didn’t know how to use it. • Candidates didn’t want to seem anti-Internet – but didn’t get heavily involved in Internet campaigning. • Instead, a brouhaha over whether Al Gore had ‘invented’ the Internet or not.

26. The Politics of the Internet – Week FiveElection 2004 • When the Internet really began to have effects on politics was in Election 2004. • Rather than just being windowdressing, it played a key role in determining outcomes. • First, it reduced transaction costs for fundraising and organizing. • Second, it helped candidates to create feedback loops.

27. The Politics of the Internet – Week FiveThe Internet and transaction costs redux • The Internet lowers the transaction costs for both organizing and fundraising. • Makes it easier for individuals to coordinate with each other, without a central hierarchy. • Allows much more flexible forms of organization, and rapid reaction to events. • Also much better as a means of fundraising than traditional methods (direct mail; appeal to rich or influential people).

28. The Politics of the Internet – Week FiveMeetup, MoveOn and Blogs • Three key tools of organizing and fundraising – Meetup, Moveon and blogs. • The first two played an important role on the Democratic side in the last election. • Allowed people to rapidly coordinate, first in support of Dean, and then of Kerry. • The last was used by both sides – but in different ways.

29. The Politics of the Internet – Week Five • MeetUp.com – a social networking service, with some limited resemblance to Facebook, MySpace etc. • But focused on allowing people with shared interests to coordinate locally. • Aimed at helping LotR fans and the like to discover each other, and to organize local events.

30. The Politics of the Internet – Week FiveMeetup and politics • Provided an important way for supporters of a particular candidate to build up momentum. • They could • Identify other supporters in their locality. • Organize meetings to coordinate activity. • Raise funds through parties etc.

31. The Politics of the Internet – Week FiveDean Campaign • Howard Dean’s campaign identified Meetup early on as a valuable tool. • Dean attended a NYC Meetup, and started to encourage his supporters to use it. • Created a feedback loop – the Dean campaign started to create a kind of self-generating momentum. He started to look like a winner.

32. The Politics of the Internet – Week FiveA Meetup style campaign • Dean’s decision to do this affected his campaign’s organization in key ways. • In Gary Wolf’s description, the campaign was based on a “stupid network” – and this was supposed to be one of its strengths. • Little central direction or hierarchy – instead there were hundreds of independent groups at the local level. • Could still organize efforts such as sending 30,000 handwritten letters to Democrats in Iowa, asking them to support Dean.

33. The Politics of the Internet – Week FiveMoveon • A complex organization (3 different structures), founded in 1998 as a reaction to the Clinton-Lewinsky scandal. • Didn’t begin to play an important role until the Iraq debates, when it began to emerge as an important force in fundraising. • Then entered into the election fray on behalf of the Democrats.

34. The Politics of the Internet – Week Five • Different parts of Moveon played different roles. • One part focused on general ‘Get Out the Vote’ efforts and voter education using soft money – officially non-partisan, but with a clear implicit bias. • Another supported specific candidates using hard money. • Another used the 527 rules to campaign sotto voce against the administration through attack-ads etc using soft money.

35. The Politics of the Internet – Week FiveHard Money • Generated a lot of hard money through small donations in 2004. • Organized houseparties etc. • Also sought to provide organizational muscle to Democrats. • Was linked implicitly to Dean early on (though never endorsed him); but was able to regear after Dean’s defeat.

36. The Politics of the Internet – Week FiveFunding and feedback effects • Feedback effects helped Dean to gather funds rapidly. • Nothing breeds success like success – people gave money to Dean in part because others were giving money, and he seemed likely to win. • Allowed him to short-circuit many of the traditional centers of power in the Democratic party.

37. The Politics of the Internet – Week FiveBlogs • Will talk in more detail about blogs’ effect on the media next class. • But blogs also played a role in fundraising and getting organized support. • Again, Dean created a network of pro-Dean blogs that played a key role in generating early momentum and buzz. • Some pro-Democrat blogs raised money (Kos, Atrios). • Sought to set pro-Democrat agenda (combatting right wing talking points)

38. Right wing blogs • Right wing blogs didn’t play as direct a role as left wing blogs in raising money etc. • Many right wing blogs libertarian – not directly allied to Republican party (though highly sympathetic to it). • But helped Republican cause through generating controversy. • Swift Boats controversy • Dan Rather controversy (topic for next class).

39. The Politics of the Internet – Week FiveLeftwing Optimism • Many perceived Dean’s early successes – and the success of MoveOn and other organizations in raising money for Kerry – as evidence for a new form of politics. • Indeed – why was the Democratic party still necessary if Howard Dean could circumvent it? • But Dean lost after Iowa. • Kerry lost, despite Moveon. • So what went wrong for the left? • And what lessons can we learn for the current election cycle?

40. The Politics of the Internet – Week FiveDean and feedback loops • Steven Berlin Johnson – talks about how the Dean campaign’s reliance on feedback loops was a bad idea in the long run. • Feedback loops are great for building in crowds, or pulling in money. • But they don’t do very well at steering an organization in a complex, changing environment.

41. The Politics of the Internet – Week FiveDifferent kinds of complexity • Johnson identifies two kinds of complexity from nature – slime moulds and termite mounds. • Dean campaign more like a slime mould. • Its ‘stupid network’ didn’t have any way of coordinating responses to change. • Johnson suggests that some form of top-down organization would have done a lot better.

42. The Politics of the Internet – Week FiveDean’s downfall • The positive feedback loop only kept going as long as Dean’s campaign was doing well. • When it started to encounter problems in Iowa, it began to falter – and wasn’t able to adapt properly. • Lacked the more far-reaching kinds of complexity that provide for homeostasis.

43. The Politics of the Internet – Week FiveThe Democrats’ failure to win • Similarly, the MoveOn phenomenon did not give Kerry a win. • It did give him a very important fundraising advantage, both in terms of soft money and hard money. • A hitherto unprecedented flow of small donations to the Democrats, mostly over the Internet.

44. Fundraising for campaigns 2004

45. The Politics of the Internet – Week FiveReasons for Kerry’s defeat • But Kerry still lost – why? • Obviously, there were many reasons – but some of them were organizational. • Unlike the Kerry campaign, the Bush campaign didn’t rely so heavily on 527s, although it used them (the Swift Boat 527). • Instead, it relied on a centrally coordinated, top down campaign and strategy to attract volunteers. • Technologically sophisticated – but in different ways (use of targeted voter databases. • Got less media attention than Moveon etc – but also got the job done better – more Bush voters turned out.

46. Difficulties in Coordinating Message • Kerry was limited in fundraising opportunities because he had accepted public financing. • More money was raised by 527s and other groups that were effectively pro-Democratic. • But these groups weren’t allowed to coordinate with the Kerry campaign. • Result: A much more confused message, no single line of attack on the Republican party etc.

47. The Politics of the Internet – Week FiveNarrow lessons • The Democratic campaign (partly a reflection of the desire to capitalize on 527s) had a much more decentralized approach than the Republicans. • Clearly helped to bridge the funding gap – contrary to expectations, Democrats did well in raising money. • But also perhaps meant that the Democrats were less able to respond with a coherent strategy than the Republicans were.

48. Recent primaries • Some interesting contrasts to be drawn that seem to support these broad arguments. • Fundraising – Obama campaign benefitted from identifying new and non-traditional sources of money (small donors), allowing it to sidestep the Clinton campaign’s control of more traditional fundraising networks. • A result of changes in transaction costs • Feedback loops – we saw one feedback loop get broken, with devastating consequences for the candidate (Clinton), and one created, in a situatio where few Republicans were really happy with any of the candidates on offer (McCain)

49. Current election • We still don’t have enough data to really figure out the relationships. • But some interesting early indicators. • Democrats have tried to steal some of the Republicans’ clothes. • Creation of ‘Catalist’ • Combining grass roots organizing with top down communication structures. • Discouraging (until recently) the creation of 527s. • Huge effort to register and GOTV. • Republicans are running a more decentralized campaign. • Have difficulties in matching Democratic fundraising given that Obama is not accepting public funding. • Are relying on joint McCain/RNC ads and fundraising to bridge the gap. • This gives them money – but leads to organizational problems. • Still aren’t very organized on WWW (though have ads on YouTube etc).

50. Catalist • Democrats have sought to match the Republican advantage on voter targeting. • Creation of ‘Catalist’ – a for-profit private enterprise designed to help the Democrats (and various other left of center causes). • Gathers detailed marketing data that allows for micro-targeting of voters likely to be interested in specific issues • Hard to say whether this will match the Republican advantage or not.