Government shutdown impasse is a leveraging crisis

There are three distinct kinds of leveraging literally moving individuals and organizations and countries in social space: bargaining leverage, financial leverage, and resource leverage. Leveraging is arguably the dominant theme of our time, although it is not widely understood.

Bargaining leverage is as old as time; financial leverage has been especially important in the United States since the 1960s according to the sociologist Daniel Bell in The Cultural Contradictions of Capitalism and peaked in the financial crisis of 2008-09, and resource leverage has become very prominent with the rise of the Internet and information technology and the partnering practices that have become prominent since the 1990s.{mosads}

In all leveraging a maximum effect is created using a minimum force and some mechanism (a fulcrum), but in bargaining leverage typically some good is withheld in order to advance a negotiation. In financial leverage, one typically uses a minimum amount of money (e.g., a down payment on a mortgage) to obtain a much greater financial benefit. Resource leveraging involves using a resource, like the internet, to create a maximum effect (e.g., reaching five million customers or voters) with a minimum force (e.g., one email). 

The government shutdown impasse is still another example of the centrality of leveraging to our era. 

Leveraging can be used in constructive, positive ways or in destructive, negative ways. Leveraging is like technology, which can be used for good ends or harmful ends.

In our evolving crisis in the United States both President Trump and Democratic leaders are using traditional bargaining leverage with a vengeance. Both sides are “over-leveraging.” Mr. Trump is thrusting the United States into a constitutional crisis with his threat to declare a national emergency to order the Pentagon to build the wall separating the United States and Mexico. Democratic leaders are themselves not offering to budge one inch to strike a deal with the President. 

Both Sen. Chuck Schumer and Speaker Nancy Pelosi have insisted that there will be no wall. Border security, they maintain, arises from other measures, not from a concrete wall or any kind of physical barrier. 

Sen. Chris Van Hollen (D-Md.), with strong support from Sen. Ben Cardin (D-Md.), is leading an effort to back Schumer and Pelosi by insisting that the Senate only pass legislation related to opening the government, where their aim is to force the president to give up his goal to build the wall or else face enormous backlash from a set of vulnerable Republican Senators and millions of voters.  

The Washington Post editorial on Jan. 8 calls on the Democrats to use their “leverage” in this crisis in order to achieve a moral purpose: namely to trade DACA for a portion of the wall. The Post is actually relying more on the concept of resource leverage than bargaining leverage, although both concepts are at play. They are essentially arguing that you can achieve maximum positive effects with a minimum amount of force. The force is a few billion dollars, and the maximum positive effect is creating a way for over 1 million immigrants who now have illegal status — the “dreamers” — to stay in the United States with legal status.

The Post’s use of the concept of “leverage,” which also draws on a previous argument by Newt Gingrich and Donald Grahman is instructive, because it illustrates the difference between fighting this battle on the field of traditional bargaining leverage and introducing a second concept of leverage to create a deal.

When there is ‘over-leveraging’ the goal is to find the “Leverage Mean,” that point which lies between excessive and deficient leveraging. The Post’s argument is trying to achieve a “Leverage Mean” by expanding the role of leveraging in the evolving crisis.

Whether you agree with the Post’s recommendation or not, Congress, President Trump, and thought leaders need to continue to think about the role leveraging is playing in this national drama.

Two commentators have recently suggested an approach that involves financial leverage.

Indeed, the best solution to this crisis may be some synthesis of all three concepts.

Dave Anderson is the editor of “Leveraging: A Political, Economic, and Societal Framework” (Springer, 2014). He is also the author of “Youth04: Young Voters, the Internet, and Political Power” (W.W. Norton & Company, 2004) and co-editor of “The Civic Web: Online Politics and Democratic Values” (Rowman and Littlefield, 2003). He has taught at George Washington University, the University of Cincinnati, and Johns Hopkins University. He was a candidate in the 2016 Democratic Primary in Maryland’s 8^th Congressional District. Contact him at dmamaryland@gmail.com.