Dark money drags democracy toward the abyss

There’s an object lesson playing out to the south of us, and not exactly the one you may be thinking about.

It’s not the obvious one of “don’t elect a federal leader who has a clear history of caring about his own grievances before he thinks about the needs of his citizens,” or more simply, “don’t elect someone who is less an agent of change than he is an agent of chaos.”

No, the lesson playing out to the south of us — one likely to have an impact on U.S. midterm elections later this fall as well as the last U.S. presidential election — is that there is a clear danger in allowing dark money to fuel political campaigns.

There are estimates that political action campaigns — or PACs — will once again dump billions of U.S. dollars into the mix, funding advertising campaigns and other political campaign efforts, and steamrolling less-funded efforts.

Why does it matter? Well, because advertising works, especially good, simple attack advertising that shifts votes through fear, rather than changing minds by promoting analysis of political campaigns.

And that gives individuals with the ability to dump huge amounts of money into campaigns a disproportionate ability to skew elections — and future governments — in their favour.

That means a few oligarchs with the ability to spend obscene amounts of money — without even really missing the money from their bankrolls — get to call the shots.

And that matters more now than ever, as we sit on what could be the crux of a massive change in economics brought about by the expected incursion of AI into the job markets.

Historically, capitalism has always liked automation, because the largest input costs for creating a product have long been the twin costs of labour and benefits. So replace workers with the fixed cost of equipment and the ongoing costs of power and maintenance, and take the profits to the bank.

But there is the messy problem of what to do with all the angry people who no longer have a way to make a living, but, in democracies, still have a vote.

The best solution, if you’re among the captains of industry?

End democracy.

A study from the Massachusetts Institute of Technology — Automation and Repression, by researchers Daron Acemoglu, A. Arda Gitmez and Mehdi Shadmehr — released in June, took a hard look at how automated large-scale unemployment caused by automation tends to play out.

The researchers examined the civil unrest that tends to occur when large numbers of people are suddenly unemployable, and argued history has always shown two methods of dealing with the anger of former workers.

It comes down, simply, to a question of paying off the unemployable, or crushing them.

As the authors put it, “A capitalist state (representing capital-owners) prefers to regulate the level of automation to lessen the threat of a successful revolt. The capitalist state can also redistribute to workers via the tax system or repress political action, thus creating greater room for further automation. We characterize the trade-off between the regulation of automation, redistribution and repression. Our main result is a complementarity between automation and repression. Unless the threat of revolt is quite weak or the capital stock is very low, the capitalist state prefers repression.”

In other words, you can slow automation through legislation, develop a system that pays those who can no longer work — like a basic annual income benefit — funded in the end by a tax system paid for by those who do have money, or you can strike early and hard with a co-operative or compromised government to repress unrest.

Part of the equation is that repressing the general public has a fixed cost, while the costs of using disbursements is open-ended. Paying people not to work can end up costing those with money more and more as time passes and demands grow. Mollification carries the risk of inflation, especially in situations where those being mollified exist in larger numbers, and all still have a vote.

Repression, less so. Its costs can even be a profit centre — if you are, for example, supplying AI to help a state tightly monitor its citizens.

The bottom line of the study is a harsh and frightening one, and one, frankly, that seems to be playing out in the U.S., as cash-strong oligarchs, especially in the tech sector, are taking a larger and larger role in funding elections, particularly through dark-money PACs.

“We show that, starting in a democracy, capital accumulation and thus greater automation encourages the capitalists to support a coup against democracy and set up a repressive system,” the study says.

The study starts out by explaining that many of the extremely wealthy, especially in the tech, already see what’s coming: “Many tech entrepreneurs throw their support behind schemes like universal basic income or universal basic dividend to contain discontent and political risks. However, many wealthy individuals and business leaders also recognize that maintaining order in a world dominated by automation may require repression and other forceful steps to protect their incomes and profits.”

One example the authors cite? “Mo Gawdat, former chief business officer of X, summarizes the attitudes of many tech leaders as rushing toward full-scale automation and then using other tools to control the population who lose their jobs. … And so you’re going to see a world where unfortunately there’s going to be a lot of control, a lot of surveillance, a lot of forced compliance.’”

But it’s harder to do that in a democracy, where even the least-employable individual has the same number of votes as the billionaire.

So what happens? Well, the mathematical work of the study is blunt: “Finally, in a further extension, we show that if society first starts in a democracy, democratic decision-making will become less and less acceptable to capitalists as the level of the capital stock grows, and society will experience an anti-democratic coup, once again transitioning to repression.”

And sadly, not only does it makes sense, but it seems obvious that the roots are already set deep in the ground. It’s just one study, but the scary part is that it rings so true, and seems so close.

The tech bros in the future — saviours or oppressors?

History and economics, sadly, point to the second.

Take political action while we still can, or reap the whirlwind.

Russell Wangersky is the Comment Editor at the Free Press. He can be reached at russell.wangersky@freepress.mb.ca.