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Political applications of social escrow

Politics is dominated by special interest groups that make large campaign contributions. A presidential campaign in the US can cost over one billion dollars. That's only $3 per American, so you might think that a $10 contribution from each family to their favorite candidate would make special-interest money irrelevant. Wrong!

A few big-money donors, early in the campaign, decide which candidates are in the running. The rest of us get to decide whether to donate to, or vote for, the lesser of two evils. Of course, you could make an early donation to your preferred candidate. But, unless many others do the same, you would be throwing your money away.

Social escrow could change this. Rather than making a donation directly, you deposit the money with a social escrow agency. If enough other people do the same, thereby convincing your preferred candidate to run, great! Otherwise, you get your money back. People will pledge more than they would otherwise donate, because they know they won't be out any money unless their candidate has a realistic chance of winning. For example, 10 million people, each pledging $100, would raise $1 billion. Tough luck, special interests!

But social escrow could do more than just raise money for candidates. It could also influence their behavior once elected.

The simplest way to do this would be to put large sums of money (a few dollars each from a lot of people) in escrow, tied to the actual performance of people in office. Consider the congressman's dilemma: Big Tobacco is offering $1 million (campaign contribution, "consulting fees", whatever) to support their legislation, but there's $10 million in escrow ($10 each from a million tobacco victims) that will be released only if he votes no.

At some point, special interests might change their tune, and decide that making campaign contributions to candidate A dependent on candidate A's votes should be illegal after all. This would be an improvement over the present situation, and we should support it.

But it wouldn't kill social escrow. What if campaign contributions to one party were made conditional on the other party doing something bad? For example, 10 million people could each put $100 in escrow ($1 billion total) that would be released to the Democratic Party if any of the following happen:
1) the Supreme Court reverses Roe vs. Wade,
2) the US invades Iran,
3) polar bears go extinct in the wild, or
4) the budget deficit increases.

That's a lot of insurance for $100 each. If the social escrow company invested the money, they could even pay dividends to the "depositors." 4% interest less 2% management fee would yield 2%, better than most savings accounts.

The terms of the escrow agreement would need to include some disincentives to keep Democrats from confirming extremist judges, voting to invade Iran, etc., just to get the money!

Of course, this mechanism could be used by conservatives as well, releasing campaign contributions to the Republicans if:
1) the Supreme Court forces gay ministers to perform gay marriages,
2) Iran invades the US,
3) polar bears invade the US, or
4) the budget deficit increases (I'm assuming many conservatives still care about this, even if their leaders don't).

Comments

Hi R. Ford,

This and other applications will be supported by The Contingency Market.

There is another class of market already pretty well established that you might be able to utilise in the interim: The Prediction Market.

Although prediction markets aren't intended to reward those who contrive the outcomes of predictions, this can be contrived.

The Contingency Market adopts this principle from the outset, i.e. that funds are paid contingent upon the outcome of a specific event (no notion of prediction whatsoever).

Crosbie,

Looks interesting. Please post again when you've had time to write the introduction, FAQ, etc.

Any thoughts on preventing use by criminals? For example, the Wikipedia article links to some anti-tax nut's fantasy about funding assassinations of government officials. A related issue would be ensuring that nobody in the social escrow agency absconds with the money. For both reasons, I think the escrow agency would need to be legally chartered in a country with both a solid legal system and lots of extradition agreements with other countries.

Prediction markets remind me of "Delphi Pools" in "Shockwave Rider" (written in 1975 but includes both computer worms and Paris Hilton -- how's that for prediction?).

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