Everyone always talks about how much money there is in politics. This is the wrong framing. The right framing is Ansolabehere et al’s: why is there so little money in politics? But Ansolabehere focuses on elections, and the mystery is wider than that.

Sure, during the 2018 election, candidates, parties, PACs, and outsiders combined spent about $5 billion – $2.5 billion on Democrats, $2 billion on Republicans, and $0.5 billion on third parties. And although that sounds like a lot of money to you or me, on the national scale, it’s puny. The US almond industry earns $12 billion per year. Americans spent about 2.5x as much on almonds as on candidates last year.

But also, what about lobbying? Open Secrets reports $3.5 billion in lobbying spending in 2018. Again, sounds like a lot. But when we add $3.5 billion in lobbying to the $5 billion in election spending, we only get $8.5 billion – still less than almonds.

What about think tanks? Based on numbers discussed in this post, I estimate that the budget for all US think tanks, liberal and conservative combined, is probably around $500 million per year. Again, an amount of money that I wish I had. But add it to the total, and we’re only at $9 billion. Still less than almonds!

What about political activist organizations? The National Rifle Association, the two-ton gorilla of advocacy groups, has a yearly budget of $400 million. The ACLU is a little smaller, at $234 million. AIPAC is $80 million. The NAACP is $24 million. None of them are anywhere close to the first-person shooter video game “Overwatch”, which made $1 billion last year. And when we add them all to the total, we’re still less than almonds.

Add up all US spending on candidates, PACs, lobbying, think tanks, and advocacy organizations – liberal and conservative combined – and we’re still $2 billion short of what we spend on almonds each year. In fact, we’re still less than Elon Musk’s personal fortune; Musk could personally fund the entire US political ecosystem on both sides for a whole two-year election cycle.

But let’s go further.

According to this article, Mic.com sold for less than $5 million. Mashable sold for less than $50 million. The whole Gawker network (plus some other stuff including the Onion) sold for $50 million. There are some hints that Vox is worth a high-eight-digit to low-nine-digit amount of money. The Washington Post was sold for $250 million in 2013 (though it’s probably worth more now). These properties seem to be priced entirely as cash cows – based on their ability to make money through subscriptions or ads. The extra value of using them for political influence seems to be priced around zero, and this price seems to be correct based on how little money is spent on political causes.

Or: Jacobin spends a lot of time advocating socialism. The Economist spends a lot of time advocating liberalism. First Things spends a lot of time advocating conservatism. They all have one thing in common: paywalls. How could this be efficient? There are millions of people who follow all of these philosophies and really want to spread them. And there are other people who have dedicated their lives to producing great stories and essays advocating and explaining these philosophies – but people have to pay $29.99 for a subscription to read their work? Why do ideologies make people pay to read their propaganda?

Maybe the most extreme example here is Tumblr.com, which recently sold for $3 million, ie the cost of a medium-sized house in San Francisco. Tumblr has 400 million monthly visitors, and at least tens of millions of active users. These people talk politics all the time, usually of a far-left variety. Nobody thinks that one of the central political discussion platforms of the far-left is worth more than $3 million? Nobody on the right wants to shut it down? Nobody on the left wants to prevent that from happening? Nobody with a weird idiosyncratic agenda thinks being able to promote, censor, or advertise different topics on a site with tens of millions of politically engaged people is at all interesting?

(in case you’re keeping track: all donations to all candidates, all lobbying, all think tanks, all advocacy organizations, the Washington Post, Vox, Mic, Mashable, Gawker, and Tumblr, combined, are still worth a little bit less than the almond industry. And Musk could buy them all.)

The low level of money in politics should be really surprising for three reasons.

First, we should expect ordinary people to donate more to politics. A lot of the ordinary people I know care a lot about politics. In many of the events they care about most, like the presidential primaries, small donations matter a lot – just witness Tom Steyer begging for small donations despite being a billionaire. If every American donated $25 to some candidate they supported, election spending would surpass the almond industry. But this isn’t even close to happening. Bernie Sanders is rightly famous for getting unusually many small donations from ordinary people. It’s not clear exactly how much he’s received, but it looks like about $50 million total. This sounds like a lot of money, but if you use polls to estimate how many supporters he has, it looks like each supporter has on average given him $2. This is a nice token gesture, but surely less than these people’s yearly almond budget.

Second, we should expect the rich to donate more to politics. Many politicians want to tax billionaires; billionaires presumably want to prevent that from happening. Or wealthy people might just have honestly-held political opinions of their own. As rich as Elon Musk is, he’s only one of five hundred billionaires, and some of the others are even richer. So how come the amount of money in politics is so much less than many individual billionaires’ personal fortunes?

Third, we should expect big corporations to donate more to politics. Post Citizens United, corporations can supposedly put as much money into politics as they want. And they should want a lot. The government regulates corporations, so having friendly politicians in power can mean life or death for entire industries. Suppose hostile government regulation could decrease Exxon Mobil’s revenues 5% – you would think Exxon Mobil would be willing to spend 4% of its revenue to prevent this. But Exxon makes $280 billion per year. 4% of its revenue would already be larger than the whole US political ecosystem! In fact, according to Exxon’s own records, they only spend about $1 million per cycle. While they’re probably hiding something, they couldn’t hide donations the size of the whole rest of the political ecosystem, so it’s still pretty mysterious.

I think there are individual factors affecting all of these. As mentioned before, elections have spending limits (however inconsistently enforced) and may not be tractable to money. Think tanks may be more talent-limited than funding-limited. Media properties may be limited by the opinions of their journalists and subscribers (the Washington Post couldn’t pivot to being a conservative outlet without getting completely different employees and customers). Tumblr has already proven unable to censor its users without sparking a mass exodus. These issues are probably responsible for part of the underpricing. But it still seems surprising.

In his paper on elections, Ansolabehere focuses on the corporate perspective. He argues that money neither makes a candidate much more likely to win, nor buys much influence with a candidate who does win. Corporations know this, which is why they don’t bother spending more. Most research (plus the 2016 results) confirms that money has little effect on victory, so maybe this is true. But it would also have to be true that lobbying, the NRA, the media, etc don’t affect politics very much, which seems like a harder sell.

That leaves the Bernie Sanders supporters. Even if money doesn’t affect politics, Sanders supporters seem like about the least likely people to believe that. I think here we have to go back to the same explanation I give in Does Class Warfare Have A Free Rider Problem? People just can’t coordinate. If everyone who cared about homelessness donated $100 to the problem, homelessness would be solved. Nobody does this, because they know that nobody else is going to do it, and their $100 is just going to feel like a tiny drop in the ocean that doesn’t change anything. People know that a single person can’t make a difference, so they don’t want to spend any money, so no money gets spent. This is true for ordinary people, but it’s also true for billionaires and greedy corporations. No single greedy corporation wants to pony up the money to change the laws to favor greedy corporations all on its own, while its competitors lie back and free-ride on its hard work. So they basically donate token amounts and do nothing. By all accounts the Koch brothers actually believed in everything they were doing, and they had to, because you couldn’t make billionaires spend Koch-brothers-like levels of time and money out of self-interest.

In this model, the difference between politics and almonds is that if you spend $2 on almonds, you get $2 worth of almonds. In politics, if you spend $2 on Bernie Sanders, you get nothing, unless millions of other people also spend their $2 on him. People are great at spending money on direct consumption goods, and terrible at spending money on coordination problems.

I don’t want more money in politics. But the same factors that keep money out of politics keep it out of charity too.

The politics case is interesting because it’s so obvious. Nobody’s going to cynically declare “Oh, people don’t really care who wins the election, they just pretend to.” It’s coordination problems! It has to be!

So when I hear stories like that Americans could end homelessness by redirecting the money they spend on Christmas decorations, I don’t think that’s because they’re evil or hypocritical or don’t really care about the issue. I think they would if they could but the coordination problem gets in the way.

This is one reason I’m so gung ho about people pledging to donate 10% of their income to charity. It mows through these kinds of problems. I may not be a great person. But I spend more each year on the things I consider most important than I do on almonds, and this is the kind of thing that doesn’t happen naturally. It’s the kind of thing where I have to force myself to ignore the feeling of “just a drop in the ocean”, ignore whether I feel like other people are free-riding on me, and just do it. Pledging to donate money (and then figuring out what to do with it later) ensures I will take that effort, and not end up with revealed preferences that seem ridiculous in light of my values.