interviews
The Nationalization of U.S. Elections
by Dan Hopkins
December 31, 2020
This interview with Dan Hopkins, Professor in the Political Science Department at the University of Pennsylvania, was conducted and condensed by franknews.
What were the original assumptions in the Constitution about state-level loyalty versus national government loyalty?
It's a good question. The Constitution is now far enough back in our collective memories that I think it's really valuable to start by having some sense of what the U.S. was like at the time. There were some scholars who argued that the Constitution is well understood as a peace treaty between sovereign states about how they were going to govern their affairs.
In 1776 and even in 1787, when the Constitution was drafted, the U.S. was a collection of 13 quite different colonies. It took the Georgia delegation six weeks to travel to Philadelphia in order to participate in the Constitutional Convention. Different colonies had very different economies and different religious heritages. This was a quite diverse country and, thus, the Constitution was designed to protect substantial levels of state-level autonomy. I think it is really important to recognize that at the time, many of the people thought of themselves as Americans, but also to a certain extent, as New Yorkers or Virginians or Pennsylvanians.
When do you start to see a shift towards politics in the U.S. becoming more nationalized?
To some degree, it's an ongoing process that has unfolded in fits and starts over our 200-plus year history. I do think that the Civil War is a critical turning point. In the run-up to the Civil War, you see many more implications of state-level identities. I'm a Georgian, I'm a Virginian. And obviously, the Civil War pitted state against state.
It's generally been the case that the Republican party has been more likely to invoke federalism. Of course, the exemplary issue is the issue of civil rights in the 1950s and 1960s. Even in more recent times, the Republican party has advocated for there being less of a role in the federal government asserting itself to protect the rights of African-Americans, especially, but not only in the South. I think it's fair to say that if you've heard a state rights argument in the last 50 years, it's more likely to be coming from the Republican party.
There's also an element in which as power shifts, we see changes. When the Republicans control the federal office, sometimes it's Democrats who say, "Hey, it's important to let California write its own laws with respect to clean energy or car emissions standards." At the same time, the extent to which we see Republican states moving to block sanctuary cities, for instance, is surprising.
If you're a principled federalist, then presumably cities shouldn't be punished for diverging.
In general, I see very few principled federalists in American politics. I think that all too often in contemporary American politics, federalism is just the clothing we use to dress up certain arguments instead of being a principled approach to a range of policy problems.
What factors contribute to a nationalized political landscape?
I actually think there's a relationship between the transformation of campaign finance, the transformation of voting, and the transformation of what's getting covered in our newspapers. There's a unifying element to all of this.
Let's look at campaign finance first. In many of the most competitive 2020 Senate races, large majorities of money came from out-of-state donations. What does that do to the candidates, and how does that affect the way constituents perceive elections?
I think that the nationalization of the campaign finance structure is an example of our nationalized set of divisions. What we're trying to do is refract these highly nationalized divisions through our federalist system. And the result often distorts representation in critical ways. One of the key facts about campaign finance has been that as late as 1992, two-thirds of all donations to federal candidates, to members of Congress, were coming from within the state that they represent. 20 years later in 2012, only one-third of all dollars were coming from the states that people represented.
The danger is that the representatives and senators increasingly have one constituency where they get their votes, but a separate constituency from where they get their money.
That is not how our system was designed to work. It was not designed for members of Congress to spend four hours a day raising money from people who are not their constituents.
And simultaneously, there has been a collapse of local media. I wonder how the decline of local news plays into this landscape?
When the internet first became a sizable presence, there was a hope that it might actually lead to a proliferation of local news. With the internet there are very, very low production costs, so, theoretically, I could put up a newsletter about my neighborhood. But in fact, as you said, the rise of the internet and the rise of cable television led to this dramatic concentration of our attention on a very, very small number of nationalized news sources. Partly that's because the news media would target us based on where we lived. The Philadelphia Inquirer targeted a set of people who wanted to know about life in and around Philadelphia.
But more recently we instead see that the business model for many media companies is to compete based on who voters are and who readers are and who consumers are, rather than where they live.
Rather than providing me with information specific to Philadelphia, they will identify me as someone who likes the National Football League or cares about politics.
That has led to the fragmentation of our media environment. One of the real losers in this has been people's attention to state and local politics. State and local politics have never been on the top of people's priority lists. It used to be that if I were reading the Philadelphia Inquirer, as a by-product of learning what the Eagle's score was, I also learn a little bit about who my mayor was or who my governor was. And nowadays, since I can go right to ESPN or I can go right to Fox News, I can skip over all that state and local information.
In a world where state and local politicians want to be well-known, they're much more likely to attach themselves to a lightning rod federal issue than they are to actually dive into the challenging, complex issues that face their local community.
Which really allows issues to be manipulated. When we focused on immigration, something I found interesting was how much immigration was used as a campaign tool in Ohio or Maine. It’s easy to make a border terrifying when you don’t live near one. Do you feel like campaigning has changed based on the ability to take issues that don't have anything to do with your constituents, but are made to look like they have everything to do with constituents?
Yeah, absolutely. One of the real challenges with a nationalized political environment is that it encourages attention to issues that are evocative and emotionally charged and often have to do with specific groups of people, but ultimately do not have clear policy effects. I think one prominent example of this is not long after President Trump was elected he attacked football players who refused to stand for the National Anthem. I think it's a very instructive case because he wasn't proposing any policy. This was purely about symbols.
I worry that in the nationalized political environment, it's very hard to put together a political coalition that speaks to auto workers and nurses in the suburbs of Detroit, and retirees in Maricopa County. This is a very diverse country. One of the easier ways to knit together a political coalition is to reach for these divisive, identity-oriented issues, even if that's not actually what's going to motivate the policies that you're proposing.
I do think that there's been a real connection between the way in which our politics has nationalized and the way in which our politics has become more identity oriented.
It's these kinds of identity charged issues that can have an intuitive meaning to people in places from Montana to North Carolina.
Has your work clarified your opinion about how national politics should work? What do you advocate for moving forward in terms of policy and campaigning?
I certainly think that voters do better when they have the information that they need, and I think that we are missing an opportunity to really use our federalist system, because there are so many different kinds of issues that face the different communities in our country.
If we are trying to force all of those issues onto a single divide between Democrats and Republicans, we're going to miss a lot of critical issues.
I think some of the disaffection with contemporary politics stems from the fact that many of us deal with problems in our day-to-day lives that are not represented by the Republican-Democrat divide.
I do want to be wary of nostalgia — or suggesting that some earlier period of history was markedly better. Yes. I worry a lot that today's voters just don't know much about state and local politics, but state and local politics wasn't always vibrant and democratic in previous generations, right? As a social scientist, I think part of my job is to lay out trends. I do think that nationalization is something that we should forecast as being a major part of our politics moving forward.
I also think that there are some policy changes on the edges that I would advocate for that I think would help reinforce the connections between places and voters, and to make better use of our current federalist system. For instance, I think campaign finance matching, so that every dollar you get locally is amplified, is a great idea. I think that could encourage politicians to lay down roots in the specific communities they represent and to spend less time trying to raise money from Manhattan or Dallas.
I think we should also do everything in our regulatory capacity to help promote, protect, and foster high-quality, non-partisan coverage of states and localities.
As a country that is hemorrhaging reporters who cover states and localities I do think that given how many important decisions are made at the state and local level, as a society, we have a real stake in the quality of local news media. There are fewer statehouse reporters, there are fewer city hall reporters, and there are fewer people who are tracking state and local politics to hold our politicians accountable. I think that has been underappreciated, and one of the real dangers in contemporary American democracy.
interviews
There Is No Particular Entity In Charge
by Michael Casey
April 30, 2019
The interview below was originally published February 20, 2019 in our Energy Democracy Issue.
This interview with Michael Casey was conducted and condensed by frank news.
Michael Casey is a writer and researcher in the fields of economics, finance, and digital-currency technology. He is a Senior Lecturer at the MIT Sloan School of Management and Senior Advisor for the Digital Currency Initiative at MIT's Media Lab, where he explores blockchain applications that advance financial inclusion, economic development, and resource efficiency.
We look to define terms as we enter new themes, incorporating blockchain and what it represents within energy democracy would be especially helpful.
To start, how do you define energy democracy?
There's a spectrum of things that would encompass it. The one we've been most focused on, in terms of how it impacts blockchain, is the idea of the ability of the user, and therefore the pro-sumer [the person who is consuming and producing power], to have the right to sell and buy at a market determined price. As it is now, utility is in the middle, purchasing power at a rate they predetermine. There's no capacity to sell to an alternative, other than a single provider.
A world in which I can enter into agreements that have my power purchased at a particular rate, whether that is literally delivering the electrons, or is a contract in which my provision to the grid is compensated at a rate that is determined by the demand for that particular quality of power, is something we're really focused on.
Which is the way the current structure is. You build onto that notions of broader democracy. The right to go off-grid, the right to establish your own systems for setting smart meters, for determining what devices are used and when. There's something of a spectrum in the concept, but the starting point we care about most is price, at least that I do.
What about ownership?
That would fall into it for sure. Yes, we definitely would put that into that same spectrum. The idea that the assets can be owned by an individual. There’s varying degrees to this. One is ownership and the other one is finance. The ability for me to finance the acquisition with whomever I can tap, rather than the electricity infrastructure I depend upon, being itself dependent upon the financing vehicles of utility. That I, or my community, can tap external sources to fund what is essentially our contribution to the broader infrastructure. You can get broader and broader with it, but the right to own and control those assets would be part of it. The right to determine how and who finances it is another part.
Where does blockchain come in?
I'll speak to it from the projects I've been specifically involved in. One is a microgrid we are experimenting with in Puerto Rico. I look at it in two ways. First is this concept of finance. I can tap my home or community and establish a microgrid. How might we have that financed by some sort of external direct investor, a social impact investor or investment fund? The blockchain creates the capacity to form what are known as smart contracts.
Are you aware of that term?
No.
Blockchain is a distributed ledger. It, in a decentralized manner, without any particular entity in charge, records the sequence of transactions and then, through a consensus mechanism, every node, every computer, within that network, each maintain their own version of the ledger, and update that ledger through this consensus process.
If you think about how we might move to a world where my transactions, my sale of power, my provision of power, and the funds I receive for those, are not being dictated by centralized utility – then the idea that we’re now no longer going to have one entity in charge of those transactions, and who gets to set those prices and who doesn't, starts to move us into this direction of decentralization.
We might, as a community, decide we're going to nominate some party to be in charge of the ledger, but again you're now trusting that entity to do so. Maybe the community appoints one household to run the ledger, and they're billing everybody, they're acting essentially as a local utility. You really haven't changed the model that much, you've just made it smaller, but it's okay. That could be a more efficient way to do things. Once you bring an outside investor in who says, "I want to make sure my collateral, some claim on that power, and the income that's generated, is being managed in a way that I can trust. I'm external to the community. Who am I going to trust to do that?"
A distributed ledger that nobody can change, gives me the capacity, potentially – I always use the word potentially, because all of this stuff is completely and utterly, in experimental phase right now – it gives us the potential to have my transactions verified without me having to trust the community member that is in charge.
You can imagine a situation where there's an investor in the United States, let's say in Seattle, who has put a five-year bond into the financing of a local community's grid in Africa. He's going to want to have some assurances that asset is being managed in a way that is in the interest to what they paid for. This is one principle idea to think about. Decentralization gives us the capacity, not just for those inside the community, but also outside, to have a relationship like this.
A smart contract is the idea that in addition to managing transactions, in the plain vanilla notion of what that is, payments of money, the actions that are taken by software to instruct devices to do things, or manage a set of contracts, can be executed without any one computer being in charge.
A smart contract is a bit of a misnomer. It implies that the contract is what's going on. The contract is an agreement between you and I. A smart contract says that you and I enter into an agreement and neither you nor I have any power over the computers executing the terms and obligations of that contract, to manipulate it.
How does this work in terms of smart property? I've got collateral, even though I'm living in Seattle and the microgrid I’m financing is in Nairobi. If payments are not met, it's a form of foreclosure or default protection. I funded this thing at a low interest rate because I'm protected. If the payments are not being made, at a certain point the system recognizes this because those payments are digital, they have programmable money qualities, and they stop. A device – a smart meter, one of the devices within the system, can divert that power back to the grid for example, so that the user is no longer using it. You can create a pay-per-use type of structure.
We thought long and hard about this from a social impact, developing world scenario. Could you build tiers into it so that certain devices always stay on because they have to? The hospital needs to have its power. Various things need to stay on, but you could then have some sort of structure in which the least necessary, or least important devices, can be turned off. And that power is diverted back to the grid until the loan is renewed and payments are revived.
You're creating a certain amount of de facto property rights that is the structure of so many other forms of lending. That's the way we think we can drive down the cost of lending. Rather than having to depend upon very centralized public finance models, in which infrastructure is built with access to Wall Street's funding, we now have the capacity, potentially, because I don't need to trust anybody in terms of the execution.
In that structure we can potentially bypass all of that, and have pools of social impact investors have direct stakes in, and help to fund the development of these smaller off-grid or on-grid types of microgrids. That's what we're working on in Puerto Rico right now. That access to finance. How do we create a sufficient level of protection? There's always the capacity that somebody could monkey with the smart meter. There's various things that could go wrong, but any investment has these factors.
The other part of it is, if you have a true transactive grid, it's not just a two way transaction with me and utility. I'm actually trading with my neighbors and setting up transactions and relationships. Then potentially the blockchain could be there as a way to tokenize the rights of that electricity. The transaction is between each of the participants in that network which itself would also be managed in a decentralized way. There's no utility. There's no large national or state level utility, nor is there even a local community utility. The utility in a sense, is the blockchain. There has to be built into it some sort of price mechanism. People are only going to enter into deals if you can potentially program devices, inverters and like, to accept or divert power over their prices, and meet whatever parameters you've set.
All that functionality, do I transact, do I not? Has the transaction been recorded? So there's no way I could do a deal with one person and actually divert the power somewhere else, and essentially double dip on the thing. All of that needs to be managed to keep the system in balance. That is where we see the second layer of a decentralized blockchain to come.
I feel at this stage, after a long time looking at all this, unconvinced that transactive systems like this are necessarily going to work. I do believe that in some shape or form, if you're going to reach this true energy democracy idea, something like this is where we need to go. But we're not there now. I think that's partly because we have these big, sensitive, national grid structures and it's not clear that the power loads and various sensitivities that go with how you keep the grid alive, and not kill people, can be managed entirely by this sort of structure.
This is just my thinking at the moment. It's not as if the broad principle of a more decentralized way to manage transactions between users and the grid isn't something we should be striving for. I am a believer in the finance part of it. Transactive systems, certainly in on-grid environments, are going to have to be capable of interacting with the demands of large service operators needs.
What about working on microgrids, or moving off the grid? Do you think that creates a better opportunity at moving towards decentralization?
Harvey [Micahel] is actually more of a visionary when it comes to the broader idea of energy democracy. A lot of his thinking has helped me on this sort of stuff.
There's certainly potential in off-grid settings.
Can we have a hybrid? Where you have an off-grid community based microgrid? It's not plugged into the national grid, except at such times when it needs it. So the national grid becomes the back up. That would be ideal. There's a huge political move. You'd need to get these utilities to really step back into a different role. While the grid is functioning in it's off-grid strategy, that is the microgrid, if you wanted to manage transactions within that community in a decentralized way, the blockchain could step in and be that management protocol for that system.
It seems like the private sector and academic institutions are the ones leading this thinking. Do you think the public and the political follow private sector investments?
That's a really good question. I think there are two barriers at arriving at this broad image of energy democracy. The first is that incumbents have a lot of power. Public utilities are heavily regulated. We find this in banking as well.
The regulators are told they must regulate the grid in such and such a way, and that is defined by default, under this current centralized paradigm. You have a lot of inertia from regulators who don't want to disrupt the model because you'd obviously have to design completely different regulations for a world in which these decentralized microgrids are built along the lines I just described. That's one barrier.
Then of course, the utilities themselves have their own political clout. If we want to depend upon their infrastructure, all that expensive capital that’s been invested into it, so that their wires are the ones we use to transact amongst each other, how are we going to compensate those utilities? There's an interesting question about how we might do so. It could be that they cease to be the providers of the power, or at least the sole providers of the power, and instead are just service managers and they take a service fee. One way to think about it might be to think about how the US telecoms industry was deregulated in the middle of the '90's. The baby bells were broken up and the like, there was a mandate that the pipes had to be provided to all comers, there would be a fee that would be paid, but there was no way you could prevent, as the owner of those cables, other providers from providing services along that infrastructure. That's one model that might be interesting when you think about it. But those guys, nonetheless, because the way their current profit models are built, and because of their political clout, are a barrier.
It’s probably at this stage, too marginal. There's not a big enough change in my savings or my profits as a pro-sumer, to really exist. It just hasn't got that "gee whiz", great motivator behind it. I think that's essentially the problem with lots of business models. It's just too incremental. How do you make this big shift if there are a lot of inconveniences involved? On the other hand, I think there is something wrong with that to some extent. We're not thinking hard about how, if we do decentralize, there's all these other business models and ideas that can be built on top of a more decentralized energy democracy system. Rather than thinking about the savings or profits, that I as a household pro-sumer may or may not make on my existing usage and sale of electricity, how do we incentivize bill systems? We now have all this information generated around price levels and the use of IOT devices, and we get more and more sophisticated, down to the device level – there is a way to actually build all these other services in the community. You treat the excess electricity that's produced as a way to then produce batteries. There's a way to fuel electric vehicles that run bus routes around the system, and those buses end up being almost like a back up battery component to the system. You end up running a much, much cheaper traffic system because there's a dual purpose here. You're the backup, you're the recipient of the excess power, and you're providing a service.
How does that get baked into a model that makes the provision of those services cheaper and regulated through this decentralized price signaling mechanism that is a combination of IOT and blockchain, that renewable decentralized energy systems could provide? I don't know what that looks like, but I can envision some very smart, econometric design systems that bring in smart IOT devices that turn on here, turn off there, and create a really rich pool of data around optimizing power, and where and when. There's a whole lot of benefits that could be derived, in a future model that we're not yet visiting, beyond the pros and cons of using it under our current structure.
The problem is people just can't think beyond their monthly power bill. To do that, you need communities to be really forward thinking and experimental in what they could build in the future.
Utility is massive and ubiquitous, but still weirdly opaque, which leaves most people confused. I never think about my utilities bill. Where does trust come into play? Especially with blockchain. Does the public have a distrust in blockchain?
If designed appropriately, and if we reach the point where software and the models and protocalls that are being developed and constantly refined and proved, are trusted to the extent they should be, then they're actually a trust replacement system. That's exactly what they're supposed to be.
When I was talking about how a social impact investor in Seattle can feel confident that their interests are being protected in a smart property financing structure with a microgrid somewhere else, the question of trust is key. I can't trust the local village chief to act in my interest. We just cannot. We have all these barriers to trust around our economy built on those things. Just as there's no reason why the villagers should trust that if I had control over the devices, I wouldn't manipulate and divert the power to my own interests.
It is precisely the problem of trust you're trying to resolve through a blockchain solution. But you asked the right question because we're not yet there in terms of the public perception of blockchain. I personally feel there's a host of misplaced narratives and a deep level of misunderstanding. Some of which is promoted by vested interests who don't understand what's going on.
There's also a lot of really shady, funky people working in this space that have done some bad things. And they've been able to do bad things because the technology itself isn't advanced enough to be able to give the right level of protection. The good news is there is a lot of work being done on security and improving the system so that we're going to reach this level where a) the confidence that people can have that they won't loose their phones is higher and b) they can do so in a way that they don't actually have to trust a custodian. Because right now in a blockchain, bitcoin type solution, the broader ecosystem around it is still being serviced by entities who have control over your money. It's a bit of a hybrid that's not necessarily reliable.
Systems that have a more decentralized, but also highly reliable security model are coming, and that is going to hopefully bring people around to start placing better confidence and trust in the system itself.
If you just look at the way Puerto Rico’s public utility was run, and the abuse, it's hard to say I should trust that. Wait until you see PREPA and what's happened there. There's no trust in the system. One of the reasons why I think Puerto Rico looks like a really good opportunity for us to explore this is because there's such a breakdown of trust in the publicly run system. They're looking for alternatives and we're able to dive in and explore ways we can make it fairer for everybody.