DAOFest – Aaron Soskin, Govrn.io

hey everyone can everyone hear me good morning down fast how's everyone doing today well cool thanks for getting up early today and coming out for this talk my name is Aaron sauce can like they're saying before and I am the founder of a company called govern and today we're gonna be talking about how to go from democracy to democracy I'm glad I hear a couple chuckles all about that pun life all right so this is a really big we're really exciting time for us for us and we think it's a really cool opportunity about how we can start to enable the next generation of democracy so really fast who is Aaron I'm gonna see if this mic works hello can you hear me way better all right thank you guys cool so who is Aaron ah that's me I'm that guy I was born in the Bay Area I grew up in Sacramento but I currently live in San Francisco as a dream when I was a kid my dream job was to be an astronaut which with the price of etherium lately we're going to the moon so I'm not exactly wrong previous jobs management consultant I was a dairy farmer and a production assistant starred in blockchain 3 years ago and my fun fact slash hot take is that ranch dressing is actually the best condiment on the world there's not no food that ranch dressing cannot go on so what are we gonna talk about today we have four different sections we're going to talk about white but what I'm first going to show you the trust is broken with our politicians today too I'm going to show you why trust is broken three we're going to talk about where pack started and four we're going to talk about the fix for these packs and ultimately if you remember nothing else from my talk today I want you to remember these three truths these three takeaways all right one political campaigns are expensive too it's an incentive problem now the politics problem and three we need to stop pushing when we should be pulling okay so key takeaway number one political campaigns are expensive not only are they expensive to win they are very expensive to lose as well in the midterms 2018 this wasn't even a pledged presidential election the average winner in the house spent over two million dollars and in the Senate over fifteen point seven million dollars in the loser spent almost a million dollars in the house and Ana sent it and sent it close to ten million dollars now these are only the losers the second-place losers this doesn't even factor into account the third place was a fourth place those or fifth place loser so for better or for worse political campaigns are really expensive to both win and lose and the worst the unfortunate thing is the cost of elections are only going up this is the this is the price of the election that the average winner spent in both the House and the Senate over the past 20 years and the reason that it's a problem the cost is going up besides just the churn of amount of money spent doing nothing is this this is a very important graph what this shows I know the the resolutions not great list a graph that shows the correlation between if you spend more and your chances of winning the election and what it shows is that over the last 20 years at least 80% of the time the person that spends more money wins the election 80% of the time the person that spends more money wins the election now take this with a grain of salt this is a correlation and not a causation that being said if you are a politician and you see this graph what is it that you're gonna start to optimize for which is why this is what happens this is a proposed agenda the DNC would give freshman DNC congressmen so a freshman DNC congressman would come in to play DNC party would give them this and say this is what your schedule should be every single day and four hours a day fifty percent of their time is blocked off for call time this is dialing for dollars this is raising money for reelection this is insane it is insane there is a proposed agenda that you have to spend 50% of your time raising money for reelection if any job in the world you have to spend 50% of your time to raise money for re-election or for your job next year you would do a bad job at that job I would do a bad job if I just meant 50% of my time negotiating my next year's salary right and this does not help the fact that we don't trust politicians when we see politicians dialing for dollars it lowers our trust and we also already don't trust politicians so Pew Research Center has been tracking over the last 60 years the percent of Americans who think that politicians do the right thing all the time or most of the time and we are at an all-time low right now at 17% and the crazy thing to me about this graph is that it doesn't really matter whether it's a Republican or Democrat in charge or trust in politicians for them to do the right thing at least most of the time goes down with almost every administration and if only 17% of Americans trust politicians to do the right thing what does that mean about our political system the problem though is that the trust problem goes both ways the open gov foundation did this huge study where they went into a bunch of campaign offices and congressional offices and they they studied how does the feedback loop work when constituents reach out to politicians and what they found is that even when politicians did respond to constituent concerns only 50% of the time with the Constituent even opened up the email such a problem on both sides of the coin politicians aren't engaging in us we aren't engaging with politicians and there's this massive breakdown in trust and ultimately this leads to us not helping politicians fund these really expensive campaigns again in 2018 only 24% of members of Congress had at least 10% of donations come from smaller donors that number shrunk shrinks quickly 21.1% when we talk about at least fifty percent coming from small dollar donors so what does that look like if this represents every member of Congress everything in purple has only 10% of donations coming from small dollar donors and only this well everything in green is at least fifty percent so that means politicians are being funded by big money donors and PACs and you couldn't say that it's bad that they're that - where the funding comes from but maybe it's also bad that we are not providing them an alternative source of funding right which really becomes a problem when they look at this graph because if I know and I'm a politician that my campaign is expensive and then my smaller dollar donations aren't coming in then I'm gonna do this and the ironic thing is the crazy ironic thing is politicians hate this they absolutely hate this they were interviewed about how much they hate dialing for dollars in a freshman and a congressperson John Larson to describe the experience of dialing for dollars as the same as sticking bamboo shoots up his fingernails it is terrible they hate this process of dialing for dollars they hate the fact that they have to spend fifty percent of their time fundraising that's not why they ran for office they ran for office of staff constituent issues which leaves us at this prisoner's dilemma we all love prisoner's dilemma right and ultimately politicians have a finite amount of time they can spend it fundraising or they can send it to solving constituent issues we as constituents can either donate to politicians or we can disengage all right and so ultimately we want to elect people that fix issues and we want to donate people that fix issues right so really we're stuck in these three quadrants right one where the constituent doesn't give money if we're in quadrant number two the constituent doesn't give money and the politician fixes the issue and they don't win for re-election quadrant three we give money they don't fix the issue and we're left holding the bag or four which ends up happening the majority of the time which is we don't give money politicians don't fix our issues that's what happens right and it's a problem because of this and this which means we're left here right we're constituents we're looking at our politicians and they're following big-money donors and PACs because that's where the money is coming from and this is a really important point to realize we don't think people are inherently bad besides bad actors we don't believe politicians don't want to work for us politicians and constituents don't inherently distrust and disengage they're just acting for what the system incentivizes politicians don't want to ignore our concerns but that's just the process that we've set into play which is where we get to can you take away number two this isn't a political problem this is an incentive problem it doesn't matter whether we vote in Democrats Republicans or independents we're gonna run into this issue as long as this is the process that we've incentivized right and this is the core argument to what how we actually fix the current system right which leads us to a very big realization we had whether we like it or not PACs and big money donors are so successful because they solve a lot of the incentive problems for politicians so let's stop for a second all right and let's ask ourselves thing how did PACs actually start they're very successful at what they do why'd they come into being how did they get so powerful and PACs actually started in 1944 and the first pack was the Congress of Industrial Organizations to raise money for the re-election of Franklin D Roosevelt the CIO was actually a poor Isaiah a group of industrial unions that got together to help encourage FDR support union members and the rules of the first pack were that the packs money had to come from voluntary contributions of the Union members rather than the Union Treasuries themselves voluntary contributions of the members this raises the question this is a down where is the pack to me it sounds a lot more like a down a group of people getting together now coming from the corporate coffers but rather everyone contributing voluntarily for a for a joint objective for a joint purpose sounds like a town which is why I spend most of my weekends doing this just preaching the Dow's are better version of packs and while is preaching this one weekend we had a rough where I had an idea which is what if instead of fighting campaign finance whereas instead of fighting big money donors we just used it to our advantage right ultimately big money donors to figure out how to make campaign finance work for them packs work packs figured out how to make campaign finance work for them lobbyists figured out how to make campaign finance work for them why can't we which gets us to key takeaway number three which is we need to stop pushing when we should be pulling why are we fighting campaign finance when it can work for us campaign finance isn't the problem the problem with campaign finance is that it's unequal access to everyone and that we have individuals have not figured out how to take advantage of it for ourselves so what if we go down this train of thought a little bit more what if we just except for one moment the money is going to be in politics instead of fighting it instead of trying to get all this money out of politics because it is very hard to get politicians to vote for money out of politics once they've been elected because we don't incentivize it what if we just accept it and say how do we take advantage of it for everybody so we can start to use the same tools and leverages that PAC some big-money donors have access to okay what's the next step in that and we're able to say we can create an opportunity to make PACs make everybody as powerful as Max and big money donors essentially what we can do is we can turn everybody into their own pack and everybody into your own lobbyists we can reduce the errors tube entry which depends on this big fact is are people really engaged and we actually believe they are they're just not engaged in politics and this is really key only 12 percent of Americans donated to politicians in 2016 69% of Americans donated to nonprofits sure you can talk some of that up to tax write-offs but that's the truth 69 close to 70 percent of people are turning to nonprofits we want change we're ready for it and we're actually engaging and donating we just don't trust politicians so the broke solution would say that people should start more packs the woke solution right is that people should actually run more downs and I'm actually not the first person to think of this does anyone know who this is this is James Madison and he was the first person to propose that everyone should be in their own doubt or rather fashion as what he called it but it was a dhow and ultimately James Madison would have been a member of James now and that is the truth you guys know James Dow is yeah James Madison would have been a member of James out and that is a truth and James Madison wrote something I was part of this group that groped the Federalist Papers and he wrote it essentially extensively about why everyone should be their own Dow and Federalist paper number 10 okay and what Federalist paper number 10 says I'm gonna summarize it right now if you have it read number 10 go read number 10 there's a lot of papers number 10 is the most important all right people are gonna an absolutely divided into factions based off their interests okay that's gonna happen no matter what - there are causes and effects to every faction we will never be able to limit the causes so maybe you can limit the facts and in order to reach consensus across factions you either need to control the control causes or the effects and the de Madisonian ideal was that everyone would have equal access and opportunity to create their own factions and have equalized the facts and if there was the case ultimately all these factions would end up balancing each other out and then as long as you allowed everybody to join factions and everyone to have the similar effects it would be fine for what Madison didn't realize is that we don't live in a perfect world right and right now not everyone has equal access to factions or capital the great fair factions right so what do we do ultimately we're left with two options we can either limit everybody's access to create factions and their associated effects or we can actually enhance everyone and equalize everyone's access right and that's what we're talking about it's not about reducing and making everyone go down to the least common denominator it's actually about enhancing and putting everyone on the same playing field all right so how do we get there and we've actually already done some experimentation in the space which is really cool has anyone heard of gang town people where people in gang down any anything down members see a couple hands love that right and gang down was a good experiment right here are some stats on it shout out to Dow House you guys haven't checked out douse go check out down the coolest way to launch Dallas anyways there's some stats there's thirty five hundred dollars in the bank we had thirty four members all right and it had a lot of at the beginning a lot of a lot of engagement but we also had a lot of learnings and if you go to ding down org this the page that ends up coming up right and there's a lot of learnings we can take from this yang Tao experiment and the truth is Dow's are getting better but they're still hard I can talk about from my perspective one of the biggest learnings I had from yang Dao is that it's not enough to create economic coordination tools Pat's don't just get a bunch of money together in a pot and say cool we have all this money in a pot they say we have all this money now what are we gonna go do with it and they actually incentivize members to go and do specific things with this capital right so dows are getting hard or getting better but they're still hard which leaves us two levels of enlightening ok and there are four levels of political enlightenment you have to go through current campaign finance second one is outcome based donations third is issue based douse and fourth is public funding for public goods I'm not gonna be able to get to the fourth one today but I'm going to talk about the first three okay we're currently here current campaign finance it's not working that well I I know I feel frustrated with it I'm sure a lot of you guys deal what we're trying to do is get to here which is the first step in our way to dowse it's called outcome-based donations and this is actually what we're building at govern right now and what an outcome-based donation is is it's donations that are held in escrow contracts until predefined community metrics are reached what does this mean this means let's say you care about education like I care about education and in the city I live in San Francisco I can go donate $100 to the mayor of San Francisco if high school graduation rates go up by 2% within the next two years and only if high school graduation rates go up by two percent in the next two years does the mayor of San Francisco get my hundred dollar donation and if she doesn't hit that metric I can choose to send my donation to any political opponent or to a non-profit that's working in the space right now ultimately what this does is it's giving us the same tools that lobbyists and PACs have able to access to you right and ultimately what we start to do is level the playing field between special interest groups and constituents because remember this is an incentive problem it's not a politics problem and when you use outcome based donations but we're able to do is set aside money and tell the politician hey instead of spending 50% of your time fundraising spend more of your time solving these issues because I now have a huge pot of money ten thousand dollars waiting for you for once you solve this issue for once you need to run for re-election and you no longer or all about running for reelection you get to do what you do best which is governing and providing solutions because we know you hate this we know you hate this and we hate this as well so when we work together and not opposed and make sure politics isn't a zero-sum game it is now we can start to improve to this future right which is that when PACs are going to be looking at the politicians we're going to be looking at us and outcome-based donations because not only are we better than PACs it's a more efficient way to do campaign finance because you don't have to spend all this time fundraising raising money just to go around the country so again gonna wrap so wrapping up these are the three takeaways you need to remember do you remember don't remember my name don't remember Govan remember these three things on how we fix democracy one campaigns are expensive we can't change that fact too this is an incentive problem it's not a politics problem three we need to stop pushing when we should be pulling why fight this massive force why fight this infrastructure instead of using it to our advantage these are the three things I will have to remember if you like what I had to say we're launching our beta in the next two weeks right it's a really exciting time so come please come join our beta if you scan this QR code it'll take you to a place you can put in your email or feel free to email or telegram me to tell you how to get involved it's really what we're building is not just the next change in campaign finance but the next generation of democracy one where we don't have to trust our politicians to always do the right thing one where we can live in this trustless scenario where we can work with our politicians and make sure politicians and constituents are on the same team I thank so much I'll be around today for any questions [Applause]