Question

Discuss the economic and ethical issues concerning how the US political system resembles a duopoly.

Answer 1

Things like entrepreneurship, communications infrastructure, corporate management, capital markets, and others — typically related to private sector activity.

Most of those in the lower left (weak and deteriorating) — such as logistics infrastructure, K-12 education, health care, regulation, and others — were from the public sector.

This negative correlation is no error. The success of one comes at the expense of the other. And in the cellar and getting worse is our political system.

US political-industrial complex is doing what it was designed to do. A finely tuned duopoly, the U.S. political system operates perfectly for its own ends.

Although Republicans and Democrats pose as ideological enemies, it’s all arm-around-the-shoulders time when it comes to doing the business of politics. At the heart of the political ecosystem, the two rival parties represent a central marketplace.

Around them is a cloud of suppliers, channels, and customers. Suppliers include candidates, campaign talent, voter data, think tanks, and lobbyists. Channels consist of retail (old fashioned face-to-face shoe leather), paid advertising, new and old media, and social media.

The channels supply the final consumer — voters. In addition, potential dynamism comes in the form of substitutes and new entrants, possible competitors to the duopoly.

A duopoly competes in a strange way. The players prefer to divide the voters, control suppliers and channels as much as possible, create high barriers to entry for new parties, and cooperate on rules that shape the industry to their mutual advantage.

This structure leads to edge-case strategies — which favor inflammatory and highly partisan positions, both by candidates and office holders — rather than those that would benefit the majority of the people and represent what most people want. Instead of trying to build a consensus in the middle, pleasing the most voters, the political industry targets minorities on either fringe.

To illustrate how rules affect the system, note “sore loser laws.” Of the 50 states, 44 have them. These laws, crafted variously, say, if you run in a primary and lose, you can’t run in the general election. The political parties used this mechanism to anoint the primary system as the only avenue to office in most of the country.

Thus, the people voice was muted, not through the Constitution, but at the level of state ruling-making.

In 2006, in Connecticut, one of six states without a sore-loser law, Joe Lieberman ran as an independent in the general election and won. However, in Delaware in 2010, Mike Castle, a well liked independent, was prevented from running in the general election because of one.

In business, market forces drive innovation through competition and accountability. But America’s political system has long prevented any meaningful competition because both parties cater to their bases, with no motivation or incentive to create a beneficial outcome for anyone who isn’t already their “customer.”

In this special two-part discussion, business leader Katherine Gehl and Harvard Business School professor Michael Porter apply the concept of Porter’s Five Forces, the classic framework that identifies and analyzes the five competitive forces that shape every industry, to America’s political system.

Their analysis reveals that America’s two-party system undermines the robust competition and accountability necessary for democracy to thrive.