American politics is a duopoly; consequently, the Democratic Party’s imminent division and collapse will soon lead to the resurgence of an anti-Republican Party. The entire process, therefore, will only appear shocking and unpredictable; in fact, it’s inevitable.
Just as we know that no entity other than one of the NFL’s official franchises will win the Super Bowl, we know that no entity other than one of this country’s two major political parties will ever win the White House or a majority in either branch of Congress. Political parties in the United States are - and always have been - a duopoly, two parties that share political power and that frequently cooperate with each other, particularly on issues relating to the exclusion of actual and potential competitors. Since candidates win by garnering a plurality (more votes than anyone else), rather than a majority, third parties cannot hope to win elections on any consistent basis; consequently, third parties are always fools’ errands, and, thus, we have always had - and always will have - a duopoly because potential entrants face insurmountable barriers, both legal and practical, that ensure their eternal electoral impotence.
Moreover, like any duopoly, this duopoly achieves its monopoly rents by reducing supply. In this case, the duopoly undersupplies both extreme and unique policy proposals. That is, neither party does enough to attract support from its extreme wings precisely because both parties know that their extremists do not have, and never will have, a viable alternative. Likewise, both parties know that people or groups with unusual interests have no choice: they must settle for whatever the major parties are offering. Thus, this duopoly suppresses voter turnout and political participation. If, for example, any group that could attract 1% of the national vote could also attain 1% of the seats in the House of Representatives, then we would have some very unusual members of Congress, and a great deal more voting. There are valid reasons to want to exclude groups that can only attain support from 1% of the population, but excluding such groups will reduce voting in exactly the same way that outlawing RC Cola will reduce total cola sales (even if RC Cola is destined to remain a distant third in the cola wars). Just as there’s always somebody who will only drink RC Cola, there’s always somebody who will only vote for a “fringe” party.
The two parties are, and always have been, fairly evenly matched. To win, parties must build coalitions that include people who oppose whatever that party supposedly supports. In other words, every winning coalition will include its Romneys and Sinemas because intra-party heterodoxy is the price of victory. That is, there simply aren’t enough people who agree on enough issues to form a majority coalition that doesn’t include Romneys and Sinemas. Thus, victory always leads to defeat, as at least some members of the groups who lost the intra-party fight for power will join the opposition. Just as price always trends towards marginal cost, the parties always trend towards equilibrium as both the threat of defeat and the promise of victory are the glue that hold each party’s warring factions together; without both, the party cannot hold as the losers within the party must believe that they can win while the winners in the party must fear that they might lose, forcing both to compromise. In other words, the purpose of a political party is not to actually achieve anything; rather, the purpose of a political party is to convince the warring factions within the party that they each might achieve something, but if and only if they continue making the compromises required for victory.
Producers, of course, attempt to earn more than their marginal costs, and they can from time to time do so precisely because they can take advantage of temporary dislocations in the market. For instance, the first person to sell peach ice cream can make super normal profits until his competitors discover how to replicate her success.
Similarly, political parties can achieve super normal results whenever they can take advantage of temporary dislocations in the market; thus, we expect that party dominance will swing between the parties from time to time, as each gains an advantage that the other is slow to replicate.
Yet, politics – and economics – are more complicated than this model implies. Sometimes, there’s a fundamental change that threatens the entire industry. For example, the most powerful taxi monopoly imaginable will find itself largely defenseless against ride-sharing technology. Similarly, the Whigs were incapable of adjusting to the consequences of America’s acquisition of Mexican territories in the West.
Fundamentally, I believe we’re witnessing another such tectonic shift because the American dollar is losing its reserve status, which means we are losing our ability to print money at will. In that sense, Modern Monetary Theory (MMT) was correct, but only with regards to the United States and only with regards to a short period of time. To illustrate my point by analogy, smoking is perfectly harmless over a sufficiently short period of time; likewise, MMT is perfectly correct over a short period of time and provided that the issuer is an unquestioned hyperpower.
Now, of course, the chickens are coming home to roost in the form of ruinous inflation, which means the Democrats can longer paper over the differences between the Democrats who want to ban cars and the Democrats who want to build them. Similarly, many Democrats want to demonize whites, and many Democrats are white. Many Democrats want to ban or strongly-discourage children, and many Democrats want to raise them. The contradictions are too numerous to list, but the Democrats are more vulnerable precisely because they’ve always used government spending to resolve their internal squabbles.
It is, for example, perfectly acceptable to “defund” the police as long as you mean that you are increasing funding for unionized police officers while adding funding for their social worker “replacements.” That is, defunding the police largely meant creating a second bureaucracy on top of the police, and that was a compromise that most Democrats could accept.
Until now. When the money’s run out.
Just as the Whigs were more vulnerable to the slavery issue because they were the party that advocated compromises based upon limiting the expansion of slavery, the Democrats are more vulnerable to inflation because they are the party that advocates compromise based upon higher government spending. (For older readers, Senator Paul Simon was right!). And, just like the Whigs before them, the Democrats will change radically or disappear.
I suspect they’ll break up before they wake up because the stakes are simply too high. Whichever faction within the Democratic Party that leads its resurgence will, in effect, gain one half the political power in this country; I doubt they’ll let the other side get that power based merely on speculations regarding who will win. Instead, they’ll likely test their strength at the ballot box.
Just as ex-Whigs ran as both Know-Nothings and Republicans in 1856 before settling on the Republicans in 1860, the Democrats are likely to divide before they conquer. I would expect some sort of Socialist/Progressive candidate and some sort of “moderate.”
Soon, of course, we’ll have a new duopoly – perhaps with new names, perhaps not. In the meantime, the Republicans should attain extraordinary results because 50% of the market is exceptional when the other half is divided. If, for example, one half of the Democrats managed to attain 80% of the party, they’d still lose by ten. And, as seems far more likely, the Democrats split far more evenly, then the Republicans can easily expect to win by twenty points or more.
From the Republicans’ perspective, therefore, I think retaining the party’s existing market share is far more important that appealing to the middle because two Democratic parties will have an innate advantage in attracting “moderates” – after all, neither needs to win, so they can be more ideologically pure and/or they can offer positions that no winner can match. To put it another way, Republicans will be seeking a majority of the vote while the two Democratic replacements will merely be seeking a majority of non-Republican voters; thus, each can adopt positions that would be poisonous in a general electorate, but attractive to non-Republicans.
To illustrate my point by example, the replacement parties can enthusiastically endorse student loan forgiveness precisely because they don’t need to attract anyone who is opposed to such policies. Winning 30% of the total vote constitutes a decisive victory when you only need to get a majority of the minority not voting for Republicans. Thus, in my example, you’d lose by 20 to the GOP, but you’d beat the other replacement party by 10, thereby making you the new duopolist.
It’s precisely the fact that each replacement party needs to win only a comparatively small fraction of the total vote to become the new duopolist that ensures this impending division within the party. That is, no socialist may believe that he or she can attain a majority, but she doesn’t need to – she only needs to win more votes than whomever the other non-Republican party nominates. If she achieves that, then she will control the new anti-Republican party, and that’s enough to place her on the path to power as the duopoly will eventually turn against the Republicans. Granted, she may have to modify her socialism, but the Republicans weren’t going to be kept out of power forever – nor will the new anti-Republicans.
Once we appreciate that the parties are really fighting over monopoly rents, the previously-incomprehensible becomes the unavoidably-obvious: Republicans are about to win crushing victories, to which their rivals will respond after first sorting out which of them will lead the new duopolist.
Today’s victories will lead to tomorrow’s defeats, but the rent-seeking will continue unabated.
