The focus on the power dynamics, which is what's going to concern us for the rest of today's class, was made famous by Joseph Schumpeter in 1942 in a book called Capitalism, Socialism and Democracy. He was an economist, as I say. And he he was very much concerned with this problem as I mentioned it at the beginning. That politics, power is an actually monopoly but you need competition in politics just as you need competition in markets for efficiency and to control the abuse of power. And so he des, defined democracy as, as you can see here, this is one his most famous quotations, as a competitive struggle for the people's vote. The political elites are engaged in a competitive struggle. That's what you were seeing in that clip between Ed Miliband and David Cameron in the British system, which I think comes closest to the Schumperterian ideal of any existing political system. And he differentiates this from the kind of thinking we see in The Federalist, be because it's competition over power, not dividing power up. And so it's a very different model, because if you have a separation of power system, everybody has to agree or at least substantial numbers in each branch have to agree, and the branches have to agree with one another, before you can get things done. Whereas in the competition of a power over time, the idea rather is all the power, temporary control of the monopoly. And so Schumpeterians will often say, you can't call a country a democracy until a government has twice lost an election and given up power. It's a strong test, by that test the US was not a democracy until 1840. Japan and India only recently became democracies. By that test South Africa's not a democracy yet. We don't know what would happen if the ANC lost an election. By that test Russia is not a democracy. So it's not a trivial test. But, and, but, so that's the idea. This competitive struggle for the people's vote to get temporary control of the monopoly. And Schumpeter really took seriously this market analogy. My bumper sticker for it is this vision of democracy as shopping. And he pushed the analogy really hard he, you know, if you think about economy, the economy revolves around consumers. If you think about politics, politics is about voters. In the economy, you have firms. What, what's the political analog of a firm in politics? >> A political party? >> A political party. In the economy, you have firms trying to make profits. What's the political analog of making a profit? >> Votes. >> Votes. Yeah, exactly. In the economy what do firms produce? They produce products, goods and services, things that people want. What do politicians produce? >> Policies and legislations. >> Yeah. They basically produce legislation. Legislative output, if you like. And just as you have consumer sovereignty in the polity. The consumer disciplines the firm. Because if the firm doesn't produce what consumers want, some other firm will come in and do it. >> Mm-hm. >> The same thing happens in politics. And so from Schumpeter's point of view, democratic legitimacy is the kind of political analogue of consumer sovereignty in the market. How does that strike you? >> Like a good analogy. >> It's a good analogy. What about you? >> It's, it's a good analogy but what does it, what does it mean? Okay, well, let me give you a, a bit of a, an example. It, at one level, what it's doing is institutionalizing mill, right? Because this is the idea of, of competition for, for con, for consumers in the economy, or competition for voters in politics. It's about argument, right? It's about arguments in which one side tries to win, rather than what we were talking about last time, deliberation, where deliberation is geared towards seeking an agreement, right? Remember when we talked about the cow in the field. The idea was, is it better to let pe, get people to talk until the agree on what they thought they kind of weighed. Alright, that's deliberation. It's the sa, common search for agreement. Schumpeter say's no. What we want is exactly what Mill's said, the clash of ideas in the public sphere. That's good for the, for the pursuit of truth. Right? We're talking about the Enlightenment. Don't forget about truth. Right? Science and truth. That's Mill's idea. And Schumpeter is a way of institutionalizing that in politics. So you have this clash of opinions. The clash of ideas. Both sides trying to win, not trying to agree. And truth is a kind of invisible hand byproduct of that process. So that's the normative claim. And, but lets talk about the dynamics of it which actually go back to ear, a, a lot earlier than Schumpeter a famous article called by an economists named Harold Hotelling. In 1929 that was subsequently spelled out for politics in a book by Anthony Downs called An Economic Theory of Democracy in 1959. So Hotelling asks a question. Why is it that two, if you have two department stores, say, in those days you might have said Malley's and Macy's, today we'd probably say Kmart and Target. Why do they wind up side by side on Main street in a town? >> For competition? >> Yeah, if they're competing why do they wind up next to each other? >> Well, presumably the first one is put there because of the density and population. >> Yeah. >> The other one follows suit because it wants a portion of that pop, of that business. >> Exactly right. And so what Hotelling and then Schumpeter and Downs all said is, think about politics in the same way. So imagine if you've got a left-right continuum. So most people are in the middle. Right? So, so you're going to have a normal distribution, some to the, some extreme left, some extreme right. And let's suppose you have two political parties a left party democratic party or labor party where I've put the A and a conservative party where I've put the B. What are the parties going to do if they want to win the election? >> They're going to move towards the middle of the matrix. >> They're going to move to the middle. Why? >> Because they are competing for the same space? >> That's where the votes are, yeah. That's where most of the votes are. So, the vote, just like who was it who said, the reason I rob banks is because that's where the money is, right? That's where the votes are, right. >> Each party gets as moderate as they can. >> Yeah well, what if, if. We shouldn't necessarily assume the me, the mi, median voter is the moderate voter. >> Right. >> Sometimes they're not. So, for example, in 1964, Barry Goldwater ran on a fairly extreme right wing platform, and got absolutely massacred in that election by Lyndon Johnson, one of the biggest landslides of all time. And in 1980 when Ronald Reagan was running against Jimmy Carter he ran on virtually the same platform as Barry Goldwater had run on in 1964. And everybody said, what a fool. He's, he, everybody knows that that's way out to the, way out to the far right. He can't possibly win. But, whether it was luck or skill on Reagan's part, in fact, the median voter had moved much closer to the policies that Goldwater had supported in 1964 and so Reagan had the sweet spot of the median voters. So it's not necessarily moderate, it's just where most of the voters are. That's where you have to go. Okay. Now if, especially in an era of sophisticated polling. The question then arises, what will they compete over? I mean after all if both parties are going for the median voter and will, and unlike 1980, the polling now, and the focus groups and everything else tell them exactly where the median voter is. How are they going to compete? What are they going to argue about? They, by definition, are going to be pretty much offering the same policies. >> Well, they can attack one another personally. >> Yeah, the politics of personal destruction, as it's sometimes called. That's exactly what they're going to be tempted to do. They're going to, they're going to assassinate they're, one another's characters and call one another's liars and try and find sex scandals and other things too. So that's not necessarily so great from the point of view of the health of a democratic competition for power. Right? It, it highlights that there are actually two things going on in Schumpeterian model. One is that you want politicians to be responsive to voters in the same way that firms are responsive to consumers. And if they're just competing over character assassination, that doesn't seem like it's serving that goal very well. But there's another, another dimension of the Schumpeterian one, which is that the classical, sort of, liberal assumption that power is corrupting. As Lord Acton once said, power corrupts and absolute power corrupts absolutely. And so for from that point of view, tossing the bums out periodically is a good view regardless of how well they are serving the voters. So it still succeeds on the second dimension but it doesn't do so well on the first. Now, there are in fact other forces at play in politics that tend to make it do better the Schumpeterian system, also on the first. For instance, if you think about the role of primaries in our electoral system in, here in the US. Primaries pull the two parties apart because there's a normal distribution of democratic voters and there's a normal distribution of republican voters. And so the, the, they're going to first have to win the primary so they're going to be pulled towards the extremes of the national electorate. Until they've won the primary, and then of course they'll pivot and move towards the center in search of the median voter of the national electorate. This is why President Obama had such a big advantage in the, in the 2012 election because he didn't face a primary challenge as a, as a sitting President whereas Romney had to win a primary against all those Tea Party people so he had to move way to the right in order to win the nomination. And then he the baggage of all of that, being accused of flip-flopping and, and so forth, and opportunism as he tried to pivot to the center. And that's one of the reasons, in the American system, that incumbent presidents tend to win two-thirds of the time because they have an easier time focusing on the median voter in their electorate from the beginning because it's not typically the case that sitting presidents face primary. Sometimes they do. Jimmy Carter was, was primaried by Ted Kennedy, part of the reason maybe he lost in 1980. Weakened him before the general election. So, but generally speaking, one thing that pulls parties apart is something like that. Something like primaries. And then you get more competition over policy in a general election. Another thing you sometimes get is competition over pork. This is the, the situation where a congressman in one district will agree to support what congresswoman in a different district wants, each for their own district, whether it's a military base or a bridge to nowhere. And so you get that kind of thing to, which can be unhealthy. Which tells you that good things don't always go together.
