Episode 24: The Politics Industry: How Political Innovation Can Break Our Partisan Gridlock and Save Our Democracy
Part 1 of a book ‘review’
As a tutor, I’ve worked with kids of all ages for over 20 years, often for long periods, and you’d be surprised how often they eventually ask “Why does [some aspect of society] suck so much? Why doesn’t it change??”
The answer I always give is: “You have to understand: for *you* it sucks, and probably for most people it sucks, but there are a few for whom it doesn’t suck at all. In fact, for them everything is *amazing*, and they don’t want things to change in the least.”
Our politics is an example of that. For most people, our politics suck. But for a relatively small number of people, everything is amazing! They don’t want anything to change. That’s what Donald Trump was onto when he talked about “the Deep State,” and it resonated so powerfully with so many people because, as I’ve said many times before, people are actually quite smart, and they correctly intuit that the political process doesn’t really work for them anymore. Trump’s error was in using the term too indiscriminately and too synonymously with “anyone who disagrees with me about any little thing”. If he’d been more judicious, the idea could have been even more powerful for him. But, if Trump had been more judicious, a lot of things would be different about our recent history.
The Politics Industry, by Katherine Gehl and Michael Porter, doesn’t get into “the Deep State”. But it does examine politics as an industry, identifying the structures and incentives that make our political system fail everyday people. Then it offers a number of suggestions for how to change those structures and incentives. So, let me assert this:
If you are into politics at all, you should really read this book. Seriously.
Let’s do the grades:
Readability: A
Ideas: A++
Conciseness: A
Overall grade: A+
The insight that drives the first part of the book is Ms. Gehl’s, in that it was her idea to apply to politics Michael Porter’s famous “5 forces” framework for analyzing the competitive structure of private industries. Anyone who went to business school will know this framework, but for those who didn’t, here are the 5 forces:
1) Buyer power (i.e., power of customers). In the case of politics, the customers are the voters, but just as most businesses give more favorable treatment to their most valuable customers, the politics industry gives more favorable treatment to its most valuable customers: donors, special interest groups, and primary voters. Buyer power for everyone else is quite low.
2) Supplier power (i.e., power of whoever supplies the inputs into your business): in the case of politics, “suppliers” are mostly the candidates, but also include groups like campaign workers and think tanks. Supplier power is also low, because everyone depends on the two political parties for legitimacy. If you are an independent candidate, you have little hope of winning an election. If you are a think tank or a voter data group, you are forced to “pick a side”, and if you ever stray and work for a candidate from the other party, or even an independent candidate, you’ll be blacklisted forever.
3) Barriers to entry (i.e., how easy is it for someone new to get into this business): in the case of politics, the barriers to entry of starting a new political party or running as an independent are enormous, and as a result we’ve had the same two parties for 150-ish years.
4) Availability of substitutes (i.e., if you don’t like a business’s product, is there some other kind of product you can buy instead that is a reasonable substitute?): in the case of politics, the Republican-Democrat duopoly is so entrenched that there’s no realistic substitute for either party.
5) Rivalry (i.e., do competitors compete or collude?): in the case of politics, superficially it seems like the two parties compete quite intensely, and in terms of policies they do, but under the surface, the two parties are more than happy to collude in keeping the political process locked into its current duopoly, and leave the machinery of politics largely untouched. Again, people are smart, and they sense this collusion, which is why an increasing number of people don’t want to be affiliated with either party. Indeed, it’s why I was an independent for so many years.
The first part of the book digs into each of these issues in some detail, but the punchline is that it all adds up to a terrible duopoly that would be screaming for an antitrust lawsuit if politics were a conventional business. But politics isn’t subject to antitrust law, so the duopoly remains.
That sets the table for the suggestions of what to change. In part 2, I’ll dig into the authors’ recommendations for how to change the machinery of politics so that it actually produces more results for everyday people.