SPONSORED:

Biden should focus on three kinds of leverage, not one

Biden should focus on three kinds of leverage, not one
© Getty Images

President-elect Joe BidenJoe BidenBiden prepares to confront Putin Ukrainian president thanks G-7 nations for statement of support Biden aims to bolster troubled Turkey ties in first Erdoğan meeting MOREaccording to a recent new article in the New York Times, said: "My leverage is, every senior Republican knows I've never once, ever, misled them." He said this in the context of an interview with reporters from a number of newspapers, including the New York Times, the Washington Post, and the Wall Street Journal.

The concept of leverage is the water of Capitol Hill. Everyone is always talking about it because everyone wants it and needs it. Without leverage, you can't get what you want in a negotiation. Without leverage, you can't advance your agenda. Having leverage doesn't mean you will get everything that you want, but it does mean that frequently you will be able to protect your interests and achieve some good results.

The leverage that is like water is traditional bargaining leverage. It is used on Capitol Hill, in law offices, in business zoom meetings — as well as throughout the private sphere, including in marriage and family relations and personal relations in general.

ADVERTISEMENT

In bargaining leverage typically one side withholds a concession on Y in order to obtain X. Because the opposing side wants Y, and you have it, you refuse to give it up until you get X, which typically has greater value than Y. Leverage involves getting a large output from a small input and it involves using a fulcrum to get it done.

There are two other kinds of leverage and each of them is just as important: financial leverage and resource leverage. In financial leverage, you use borrowed funds to make a large return on investment. In resource leverage, you use some input — like an email in a desktop computer, laptop or smartphone — to get a large output, such as reaching one million customers or voters.

Leveraging is as old as time. Archimedes, the mathematician, extolled the power of the "lever" in ancient Greece, claiming "Give me a place to stand, a lever long enough and a fulcrum, and I can move the earth."

Biden is right to emphasize his bargaining leverage with the Congressional Republicans. It will help him advance his agenda if he also relies on financial and resource leverage, concepts I outlined in "The Age of Leverage." Bargaining leverage involves confrontation, opposition, and zero-sum reasoning and impedes creativity and mutual trust. Resource leverage, according to Gary Hamel and the late C.K. Prahalad in their landmark book “Competing for the Future,” is by its very nature creative. If you unite a tape recorder and headphone, you get the Walkman; you get something new, something that gives us a new form of experience. If you leverage the internet and social media effectively, you build up support and strengthen your platform. President TrumpDonald TrumpBiden prepares to confront Putin Biden aims to bolster troubled Turkey ties in first Erdoğan meeting Senate investigation of insurrection falls short MORE has shown politicians how to do this, whether you like him or not.

Indeed, the Information Age has totally transformed the concept of resource leverage since information technology is extremely leverageable. Industrial age technology is much less so. Compare the steam engine to a laptop.

ADVERTISEMENT

Financial leverage, when used excessively, causes massive problems, including the 2008-9 financial crisis and Great Recession. It can be used creatively by The White House and Congress to create opportunities for individuals, businesses, nonprofits and colleges and universities.

Biden, a transactional politician who knows how Washington works, needs to have his Cabinet and White House team work constantly on all three kinds of leverage. If we are going to tackle the health and economic challenges brought on by the pandemic crisis, eliminate racial injustice, save small businesses, improve our healthcare system, and reconnect to our allies in the global theatre, the time is now to leverage brilliantly.

That involves finding the leverage mean: leveraging frequently and leveraging well, without leveraging excessively or deficiently.

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 8th Congressional District. Contact him at dmamaryland@gmail.com.