The Politics Industry
Applies industry analysis to US party politics
Summary
Gehl, a former manufacturing chief executive, and Porter, the Harvard strategy professor, analyse American politics as an industry using Porter's five forces framework and conclude that it is a duopoly that has optimised itself against the interests of its customers.
Their argument is that the two parties are not failing but succeeding at what the industry's structure rewards. The parties compete for partisan primary voters, donors and interest groups rather than for the general electorate, they cooperate to raise barriers against new entrants through ballot access rules and debate qualification, they control the rules of the game through redistricting and legislative procedure, and they have built a supporting industry of consultants, media and data firms whose revenue depends on continued polarisation. Compromise is punished by primary voters, so legislators who solve problems lose their seats.
The proposed remedy is structural rather than moral. They advocate final-five voting, meaning nonpartisan primaries where the top five candidates advance regardless of party, combined with ranked choice voting in the general election. The argument is that this changes what a candidate must do to win: they must appeal beyond a partisan base, and a legislator who compromises no longer faces elimination in a low-turnout closed primary. They also propose legislative rule changes to remove the leadership's control of what reaches a vote.
The analysis is the strong part and the framework transfers well. The reform proposal rests on limited evidence, since final-five voting had been tried in very few places when the book was written, and political scientists dispute how much electoral rules change legislative behaviour. The Alaska implementation since publication provides the main empirical test.
Key takeaways 7
- The two American parties form a duopoly that competes for partisan primary voters and donors rather than for the general electorate, which is why outcomes do not track majority preferences.
- The system is not broken but is performing exactly as its structure rewards, so appeals to better behaviour cannot change it.
- Closed party primaries with low turnout give a small partisan minority the power to eliminate any legislator who compromises.
- The parties cooperate to raise entry barriers through ballot access rules, debate qualification and campaign finance structures.
- A supporting industry of consultants, media and data firms earns revenue from polarisation and therefore lobbies against reforms that would reduce it.
- Nonpartisan primaries advancing five candidates, combined with ranked choice voting in the general election, would change what a candidate must do to win.
- Legislative rules that give party leadership control over what reaches a vote prevent majorities from forming across party lines even when they exist.
Who should read it
Operators and investors who want competitive strategy analysis applied to political structure, and anyone assessing electoral reform proposals.
About Michael E. Porter
Bishop William Lawrence University Professor Emeritus, Harvard Business School; founder, Institute for Strategy and Competitiveness
Competitive Strategy and the five-forces framework are the primary source for industry analysis, and Competitive Advantage supplied the value-chain vocabulary the field still uses.
Harvard Business School, Institute for Strategy and Competitiveness
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