In
Lipstick on a Pig, I looked at why
facilitators will triumph over
institutions in the markets for retail financial services. I'm now working on the next book in the series that will demonstrate similar outcomes in the public sector. Political parties, unions, government departments, churches and the European Commission are all in the frame. Do they exist to solve citizens' problems, or to solve their own problems at citizens' expense?
Thanks partly to the
Leveson Inquiry and a vengeful
Rupert Murdoch, we're building a great picture of self-interest, greed and fear of transparency in key parts of the UK public sector. Riding hard on the heels of
Horsegate - which perhaps typifies the alleged link between politics, journalists and police - we've of course had
the allegation that Peter Cruddas, former Conservative Party Treasurer, claimed that a donation of at least £200,000 would get you to
dinners with David Cameron and George Osborne, as well as the opportunity to get
your policy concerns fed into the "policy committee at number 10." Cruddas claimed "
my job is to get the donors in front of the Prime Minister." The Tories say "No donation was ever accepted or even
formally considered by the Conservative Party" on the cruddy basis that Cruddas was suggesting (my italics). Cruddas has resigned.
But let's not confuse the activities of the party officials with those of party MPs and Peers
who are acting in their capacity as UK government ministers. The party people can't speak for the government. The Cruddas Affair, like the Cash for Honours idea, smacks more of a lame attempt at positioning the allure of political influence as bait on the real - and less controversial - hook: the chance to hobnob with other wealthy donors in a grand setting. You could equate the plight of anyone who climbs aboard that bizarre bandwagon to
investors in Madoff's ponzi scheme or
'stupid Germans from Dusseldorf' who offered insurance against sub-prime mortgage defaults. The truth is you may not need to pay any money at all to get policy suggestions into a committee at number 10, depending on the quality of the suggestion. And the sort of people who could afford large cash donations could also simply pay lobbying firms to push their pet policies around Whitehall and Westminster to greater effect. They might even simply
buy lunch.
All of which tends to suggest that the managers of political parties have little genuine interest in policy at all, let alone solving the problems of ordinary people, and are instead merely preoccupied with choosing socially attractive candidates and wealthy fools to pay for their election.
But enough sunlight appears to have shone into this murky world for the political leaders, at least, to realise that offering to pimp the PM or sell a peerage won't really bring in the dosh. Nervously, they are casting around for an alternative. As recently
noted in the Guardian, all three UK political parties last year dismissed
recommendations by the oxymoronic
Committee on Standards in Public Life to limit political donations to £10,000 per donor per year, require union members to opt-in to their subscriptions being used to fund the Labour Party, to provide £3 of public funding per vote, and to allow tax incentives for small donations. Now Labour have suddenly suggested that a cap of £5,000 would be sufficient, while the Tories want a cap of £50,000 - which happens to double as a membership 'fee' for their clubby "Leader's Group" though "50 City donors" gave them more than that in the year to June 2011 (isn't it notable that these figures are stale by time of publication?).
In other words, the major parties lack confidence that an open, transparent appeal to ordinary citizens will yield the necessary war chest. Could this be because they don't believe their policy offering is compelling enough to persuade enough citizens to part with just a few pounds each...?
This myopia has parallels with the political approach to the UK bank lending crisis. Even when 'welcoming' the
evidence that ordinary people are directly funding each other's personal and business plans,
the politicians still cling to the notion that Big Money will eventually pull through. As a result, they refuse to make the formal changes to the tax and regulatory framework necessary to level the playing field for non-banks, implying that this whole mass-collaboration thing is somehow just a sideshow.
Of course, as discussed in
Lipstick, the same malady affected many other 'institutions' who've lost out to 'facilitators' whose primary focus is solving others' problems instead of their own. Just ask the ad agencies whether they think their clients find Google and Facebook more compelling recipients of advertising expenditure than the traditional media.
Refreshingly, some officials like the Bank of England's financial stability director, Andy Haldane,
concur:
"In the UK companies such as Zopa, Funding Circle and Crowdcube are
developing this model. At present, these companies are tiny. But so, a
decade and a half ago, was Google."
“With all these profound changes – the Google-isation of the world’s
information, the creation of on-line networks bigger than whole
populations, the ability of new technology to harness the wisdom of
crowds and the rise of user-generated content – we are seeing the
democratisation of the means of production, distribution and exchange. …
People… are the masters now.”
On April Fools Day, I
suggested that smokers and drinkers might target the excise duty they pay on beer and cigarettes at specifichealth services. I wasn't being entirely facetious. There's no reason why a majority of voters shouldn't find it compelling to direct specific elements of their taxes or savings to specific public services, projects or even political parties. But enabling that to happen would require a little more ministerial interest in granting formal regulatory status to direct finance platforms.
Will the lure of campaign crowdfunding prove too tempting to resist further? The Tories could offer dinner with Cameron at the Olympic Stadium.
