A conversation with the Foundation for American Innovation’s Samuel Hammond (Part 2 of 2)

Editorial note: this essay originally appeared at The Giving Review.

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Samuel Hammond is chief economist at the Foundation for American Innovation, where his work focuses on innovation policy and artificial intelligence—and, more broadly, addresses the effects of emerging technologies on institutions and, even more broadly, on democracy. Previously, Hammond was director of social policy at the Niskanen Center, where he remains a nonresident fellow. At Niskanen, among other things, he examined the relationship between free markets and social-insurance programs.

Hammond earlier worked on regional economic development for the Canadian government, and he was a graduate research fellow at the Mercatus Center at George Mason University.

In a thoughtful and historically informed article for Palladium magazine earlier this month, provocatively entitled “Think Tanks Have Defeated Democracy,” Hammond argues that private, philanthropically funded, nonprofit think tanks and advocacy organizations have largely displaced many of the traditional functions of political parties—serving to weaken the functioning of democracy as they’ve done so. “[P]olicy influence has moved away from voters and toward a network of think tanks, nonprofits, and philanthropic funders—creating a system that is less participatory and less accountable,” he writes.

Hammond was kind enough to join me for a recorded conversation earlier this month. In the first part of our discussion, which is here, we talk about his article; why the U.S. has so many think tanks; how that differs from other democracies; and what philanthropy, its own managerial elite, and the one it funds have done to civil society rightly understood and democracy in America.

The just less than 17-minute video below is the second part, during which we discuss populism and the role of tax-incentivized philanthropy in supporting think tanks, how best to consider reforming the nonprofit sector, and how artificial intelligence might radically reshape it.

As Donald Trump politically benefited from ascendant populism in 2016 and began his first presidential term, “he comes to Washington and he discovers that he has actually no intellectual technocratic infrastructure to back his project,” Hammond tells me. “So he ends up having to lean on the Paul Ryans of the world and the existing conservative movement’s infrastructure,” which was actually a large part of the elite establishment against which the populism giving rise to his victory was reacting.

After the term, “The broader ecosystem that started to bubble up around [Trump] realized if we’re going to do this again, we need to really begin building not just a counter-culture, but a counter-establishment, and investing in new institutions,” he continues. These organizations “spent their time building up capacity and building up plans. Then Trump comes back into office, he has his own army to work with. It shows the ways in which power in Washington really depends on having these sort of dueling armada of nonprofit organizations ….”

Didn’t conservative philanthropy already help create and maintain an anti-elite counter-establishment—the one on which Ronald Reagan relied during his political rise and presidency, including all the many think tanks with which we’re so familiar? “A lot of the intellectual ideas on the New Right and Trump right were at least superficially trying to counter the Reagan-era coalition and ‘zombie Reaganism,’” according to Hammond. “It reflects the ways in which this is a turning clock, where every few generations, these establishments grow stale and have to be regenerated.”

Reform and recapitulation

Hammond recommends considering policy reforms of the nonprofit sector that would weaken the influence of its professional managerial elite that has become so distant from everyday Americans, including reducing the favorable tax treatment originally given it for the purpose of furthering charity. Citing Michael Lind’s book The New Class War, he further recommends trying to strengthen, to “crowd-in,” membership institutions—unions, churches, civic groups—that structurally have to rely for their existence on support from people to whom they must pay attention and be responsive, which requires being and staying closer to them and their wishes.

“I think in more in terms of political equilibria and what kind of politics we want. It’s not necessarily just, you know, change one variable and leave everything else the same,” Hammond says.

“So, yes, changing the tax treatment of trusts and foundations in particular, I’d be very supportive of that. Even just applying more scrutiny. I would still want people to give to bona fide charities, but a lot of these so-called educational nonprofits are more or less just lobbying firms,” he continues.

“But then what do you ‘crowd-in’ with? I think part of that has to come from more like forward-looking public policy.” Recalling some of his work in Canada and at Niskanen, Hammond talks about social policies like child-care tax credits and poverty-reduction efforts that seek to empower families and individuals, as opposed to subsidizing professionalized institutions. “I would go to war with them” because “what you’re really doing is creating seed funding for another institutional armada that can entrench these credentialed interests ….

He encourages “exploring those kind of strategies, where we don’t just try to tamp down on the (c)(3)s and the foundations, but also have a vision for what grows in its place and ideally something that flows directly from the bottom up.”

Critiques of the “nonprofit industrial complex” originated on the progressive left, but are now echoed by the populist right, Hammond acknowledges. Those critics on the left “were seeing something very real, in part because that part of the left has a big focus on political economy. I think the populist right is now recapitulating their own version of this.” While “[y]ou don’t want to overstate the areas of agreement, right,” he says, “[w]e’re both critiquing the status quo ante and the ancien régime, but we have very different versions of what should replace it.”

AI, the elite, and the citizenry

On the coming transformative effects of artificial intelligence on nonprofitdom’s managerial elite, including at foundations and think tanks, Hammond sketches out both pessimistic and optimistic scenarios. Overall, AI could eliminate much white-collar knowledge work, undermining the traditional role of think tanks and their fellows who conduct research and offer analysis. Their power and influence may persist to a large degree, however, given the relationship-driven networks of which they are a part and the resources to which they have access or control.

He says AI’s likely reduction of the transaction costs of operating large, centralized institutions might enable more citizens in smaller, localized groups to meet all sorts of needs in better, bottom-up fashion—from policy development, to education, to direct social-service provision, and to community-building of the kind he thinks preferable in revitalizing democracy and true civil society.

Source: https://capitalresearch.org/article/a-conversation-with-the-foundation-for-american-innovations-samuel-hammond-part-2-of-2/