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Small dollar democracy

Changing the way UK parties are funded would cut out the need to find donations from millionaires, a

Forget meeting millionaires. Reform political party funding, rely less on big donations, and the issue of who does or doesn't meet up with super-wealthy Russians is immaterial.

In the UK, the spectre of sleaze has once again reared its ugly head, when Shadow Chancellor George Osborne was accused of attempting to solicit a £50,000 donation from Russia's richest man Oleg Deripaska.

Although Osborne strongly denies any wrong doing he admitted on Monday: "To be honest this didn't look very good and that's something I regret."

And it is hard not to see this event as the latest in a long list of perceived campaign finance scandals which have greatly undermined the public’s faith in the funding of party politics.

This is a real contrast to an event last week across the Atlantic where Barack Obama’s campaign manager, David Plouffe, announced the campaign had raised a staggering $150m in September.

Most impressively, this money came from 3.1 million American citizens, each, Plouffe claimed, giving an average of $86. This approach to fundraising is known as small-dollar democracy, and it relies on a combination of citizen activism, the internet and the careful cultivation of a campaign donor base.

Could small dollar democracy provide a sleaze-free answer to the funding woes of British parties, and put an end to stories like the one we saw this week? Admittedly it is unlikely that British parties can replicate the scale of Obama’s success. However, this does not mean they cannot learn important lessons from his campaign’s approach to fundraising. Three important ideas stand out as being especially significant.

Firstly, British parties should resist the temptation to find an easy answer – namely, rushing headlong into the continental European model of state funding. While this might cure any cash shortages, it does not, as Germany has discovered, end the problem of campaign finance scandals. Additionally, such a move would be very unpopular with the public, especially at a time of economic crisis and increased national debt.

Secondly, the whole notion of small dollar democracy demonstrates that it can get more people involved, and feeling positive about politics. This contradicts much perceived wisdom in the UK, which assumes that money will have a pernicious impact on politics. However, the British problem is not so much money, but where that money has come from. Parties have become reliant on too few people and organisations. The solution to this problem must include political parties replicating the technology and ideas used by Obama and democratising the fundraising process. For example, a system where either existing patrons or the state matched new contributions would greatly incentivise parties to seek out small donors.

Thirdly, and perhaps most controversially, the success of Obama campaign in galvanising individual donors might provide a model for the future of Labour’s financial links with the trade unions.

This issue is especially apposite, since disagreement over trade union funding was one of the issues which led to the collapse of the last round of talks on campaign finance reform.

Conservatives argued that unions should be subject to the same £50,000 donation cap that was proposed for individuals.

Labour claimed that trade unions represented millions of people, so the two were not comparable. It is clearly fatuous to compare a trade union with a single millionaire donor, as the Conservatives do.

This is a flagrantly political attempt to sabotage Labour’s historic links with the union movement.

Nonetheless, it is also hard to argue that the convoluted mechanisms through which trade unions make political contributions are analogous to millions of individual donations.

The relationship between the unions and Labour could be remodelled, learning the lessons from Obama’s campaign.

While he had millions of individual givers, his donors were certainly not isolated – they were part of a complex network, based on their communities, workplaces and online. Labour could learn from this; the union movement is a huge ready-made network, ripe for activation.

In the future, unions could campaign for political donations among their members in a manner similar to progressive Political Action Committees in the US, such as MoveOn or ActBlue. This model of union-based funding would be grassroots driven, relying on the support of ordinary members.

Instead of managing highly institutionalised political funds, the role of the union leadership would be to mobilise its membership to actively support progressive causes through choice. This approach would also end the debate over institutional donation caps, since every penny given could be traced back to a completely willing and engaged individual.

The British campaign finance system needs to change: our parties are constantly short of resources and over extended, the public lack confidence in the system, and a small number of large donors appear to have a huge impact over the course of events.

The success of the Obama campaign, where technology and a sense of community have been used to such phenomenal success, offers important lessons for campaign finance reform in the UK. By widening the pool of fundraisers and reducing the average contribution, cynicism about political finance in the US has diminished. Domestic reform along similar lines is possible and, correctly conceived, can bring about powerful and positive effects on our body politic.

Nick Anstead is the co-author with Will Straw of Yes We Can: How the Lessons from America Should Change British Politics, published by the Fabian Society on 30 October, on

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The New Times: Brexit, globalisation, the crisis in Labour and the future of the left

With essays by David Miliband, Paul Mason, John Harris, Lisa Nandy, Vince Cable and more.

Once again the “new times” are associated with the ascendancy of the right. The financial crash of 2007-2008 – and the Great Recession and sovereign debt crises that were a consequence of it – were meant to have marked the end of an era of runaway “turbocapitalism”. It never came close to happening. The crash was a crisis of capitalism but not the crisis of capitalism. As Lenin observed, there is “no such thing as an absolutely hopeless situation” for capitalism, and so we discovered again. Instead, the greatest burden of the period of fiscal retrenchment that followed the crash was carried by the poorest in society, those most directly affected by austerity, and this in turn has contributed to a deepening distrust of elites and a wider crisis of governance.

Where are we now and in which direction are we heading?

Some of the contributors to this special issue believe that we have reached the end of the “neoliberal” era. I am more sceptical. In any event, the end of neoliberalism, however you define it, will not lead to a social-democratic revival: it looks as if, in many Western countries, we are entering an age in which centre-left parties cannot form ruling majorities, having leaked support to nationalists, populists and more radical alternatives.

Certainly the British Labour Party, riven by a war between its parliamentary representatives and much of its membership, is in a critical condition. At the same time, Jeremy Corbyn’s leadership has inspired a remarkable re-engagement with left-wing politics, even as his party slumps in the polls. His own views may seem frozen in time, but hundreds of thousands of people, many of them young graduates, have responded to his anti-austerity rhetoric, his candour and his shambolic, unspun style.

The EU referendum, in which as much as one-third of Labour supporters voted for Brexit, exposed another chasm in Labour – this time between educated metropolitan liberals and the more socially conservative white working class on whose loyalty the party has long depended. This no longer looks like a viable election-winning coalition, especially after the collapse of Labour in Scotland and the concomitant rise of nationalism in England.

In Marxism Today’s “New Times” issue of October 1988, Stuart Hall wrote: “The left seems not just displaced by Thatcherism, but disabled, flattened, becalmed by the very prospect of change; afraid of rooting itself in ‘the new’ and unable to make the leap of imagination required to engage the future.” Something similar could be said of the left today as it confronts Brexit, the disunities within the United Kingdom, and, in Theresa May, a prime minister who has indicated that she might be prepared to break with the orthodoxies of the past three decades.

The Labour leadership contest between Corbyn and Owen Smith was largely an exercise in nostalgia, both candidates seeking to revive policies that defined an era of mass production and working-class solidarity when Labour was strong. On matters such as immigration, digital disruption, the new gig economy or the power of networks, they had little to say. They proposed a politics of opposition – against austerity, against grammar schools. But what were they for? Neither man seemed capable of embracing the “leading edge of change” or of making the imaginative leap necessary to engage the future.

So is there a politics of the left that will allow us to ride with the currents of these turbulent “new times” and thus shape rather than be flattened by them? Over the next 34 pages 18 writers, offering many perspectives, attempt to answer this and related questions as they analyse the forces shaping a world in which power is shifting to the East, wars rage unchecked in the Middle East, refugees drown en masse in the Mediterranean, technology is outstripping our capacity to understand it, and globalisation begins to fragment.

— Jason Cowley, Editor 

Tom Kibasi on what the left fails to see

Philip Collins on why it's time for Labour to end its crisis

John Harris on why Labour is losing its heartland

Lisa Nandy on how Labour has been halted and hollowed out

David Runciman on networks and the digital revolution

John Gray on why the right, not the left, has grasped the new times

Mariana Mazzucato on why it's time for progressives to rethink capitalism

Robert Ford on why the left must reckon with the anger of those left behind

Ros Wynne-Jones on the people who need a Labour government most

Gary Gerstle on Corbyn, Sanders and the populist surge

Nick Pearce on why the left is haunted by the ghosts of the 1930s

Paul Mason on why the left must be ready to cause a commotion

Neal Lawson on what the new, 21st-century left needs now

Charles Leadbeater explains why we are all existentialists now

John Bew mourns the lost left

Marc Stears on why democracy is a long, hard, slow business

Vince Cable on how a financial crisis empowered the right

David Miliband on why the left needs to move forward, not back

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times