It does tend to be The Guardian where the strange arguments turn up but this is bizarre even by the standards of that newspaper. Crowdfunding is a bad thing because we can’t be sure that the people who really need it get the money. Oh, and if crowdfunding is successful then this might mean that government might not need to steal so much of the taxpayers’ money. Or that, at least, is what the argument seems to be.
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Here’s the first part of it:
In 2009 with the launch of Kickstarter the concept was largely legitimised for tech startups looking to both validate their product ideas and recruit customers.
Encouraged by that success, there is now a plethora of platforms that allow just about anybody to seek funds for just about anything. Herein lies the problem. If we create a culture where everybody has their hats out, how long before we tire of being asked to support everyone’s endeavours? And can we be sure the ‘right people’ (those most in need) are receiving the money?
But this is the joy of crowdfunding: we get to decide, with each dollar that we send or don’t send, who those right people are, who is most in need of our cash.
I suppose that if you’re an out and out statist then we the people, individually, shouldn’t be deciding who those people are and what those needs are. But even that argument fails in a democracy. For we elect the politicians to do what we the people want to happen. So the politicians should only be allocating the tax revenues in the manner that we desire anyway. So whether it is those politicians or whether it is us, individually and directly, the money must, by definition, be going to those we feel have the most need of it. The only time this fails is if the politicians do not allocate the cash as we would desire but through some application of agency theory or the like allocate our money as they see fit. But that’s not an argument against crowdfunding, that’s one in favour of it. We’ve now got the technology to disintermediate the political process and thus avoid that agent/principal problem.
But, given that this is The Guardian, the argument does of course get worse:
Crowdfunding gets complicated when you consider the extent to which crowd funding is allowing everyday people to take action in areas that have relied heavily on government support – complicated because although decoupling access to money from access to power, it is also providing an excuse for governments to shirk their social responsibilities. When the Australian government abolished the highly-regarded Climate Commission, the public donated to resurrect it as The Climate Council. At the time Australian environment minister Greg Hunt said the public support for the Climate Council proved the government should not have pay for the body.”That’s the great thing about democracy, it’s a free country and it proves our point that the commission didn’t have to be a taxpayer-funded body,” he said. It’s not the first time the argument’s been used, nor will it be the last.
There have already been concerns in the arts community, one of the hottest areas of crowdfunding activity, that the movement could be an excuse for governments to make further cuts to arts grants.
Well, yes, that could happen and that it could is the reason why it should. For government is the method by which we do those things collectively that cannot be done either individually or through voluntary cooperation. We’ve now this new technology, this interface of the web and credit cards, that allows us to do this crowdfunding. That is, before we had to do this in a compulsory and collective manner, support artists and the like. Now we can, as above, disintermediate that system and do it either individually or through voluntary cooperation. We don’t need the forced collectivism any more and given that we don’t need it we shouldn’t have it any more.
After all, as Marx did point out, it is the technology of production that determines social relations. And as that technology changes then so will those social relations. It used to be necessary for arts subsidies to come from the State because of the coordination problem. Technology has now moved on and it is not necessary: thus the social relation of the artist as a ward of the state vanishes, to be replaced by the artist patronised by crowdfunding.
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