AI transcript
0:00:09 If you saw the recent presidential debate between Joe Biden and Donald Trump, you may
0:00:15 have found yourself thinking, “Really, these are the two best candidates the United States
0:00:16 has to offer?
0:00:19 How did that happen?”
0:00:23 The episode you’re about to hear can help explain how that happened.
0:00:29 The core of this episode was first published in 2018 during Donald Trump’s presidency.
0:00:33 This is an update, but we’ve also added a new voice.
0:00:36 Andrew, it’s Stephen.
0:00:37 How are you?
0:00:38 Hey, Stephen.
0:00:39 How are you, my friend?
0:00:40 First of all, just introduce yourself, please.
0:00:41 I am Andrew Yang.
0:00:49 I’m an all-around, interesting Bon Vivant.
0:00:51 Andrew Yang has been on this show before.
0:00:57 The first time was in early 2019 in an episode we called “Why Is This Man Running for President?”
0:01:02 Yang did run as a Democrat in the 2020 election, and for a time he was everyone’s favorite
0:01:07 entrepreneur, a businessman with a taste for policy research.
0:01:11 He offered sharp diagnoses and prescriptions for some of our country’s biggest economic
0:01:13 and social problems.
0:01:19 In support, there arose a substantial Yang gang, and his campaign caught fire for a while.
0:01:25 He made the big Democratic debate stage in 2020, but ultimately he flamed out.
0:01:29 In 2021, he ran for mayor of New York City.
0:01:31 He lost that election, too.
0:01:36 Soon after, he left the Democratic Party and launched what is called the “Forward Party.”
0:01:37 Why?
0:01:43 Imagine if you had a business, a restaurant, eight out of ten of your customers were unhappy,
0:01:48 and then you proceeded to change absolutely nothing for years at a time.
0:01:51 That’s the way most Americans interact with our political system.
0:01:56 Okay, so you recently gave this TED talk called “Why U.S. Politics Is Broken and How
0:01:57 to Fix It.”
0:01:59 Can you give me the TLDR on that?
0:02:00 Sure thing.
0:02:03 Why are we so ticked off all the time?
0:02:04 A lot of us are, at least.
0:02:07 And I tried to make the case in numbers.
0:02:13 There’s a 15% approval rating for U.S. Congress today and a 94% re-elect rate for incumbent
0:02:14 House members.
0:02:20 So the fiction we’ve been sold is our leaders have to make 51% of us happy to stay in office.
0:02:23 That’s actually not true for nine out of ten seats.
0:02:28 The real job of members is to stay on the good side of their party’s base voters.
0:02:33 And if they win their primary, they cruise, but all of their attention and energy is on
0:02:34 making sure they win the primary.
0:02:38 Is it fair to overall call that setup a duopoly?
0:02:43 Oh yeah, of course it’s fair to call it a duopoly, where the two parties have carved
0:02:48 up the country into blue zones and red zones, and it’s very hard for certainly anyone else
0:02:52 to run and win in the vast majority of locations.
0:02:55 And what other duopolies does our political duopoly remind you of?
0:02:59 You know, the first thing that popped into my mind for me was something like Microsoft
0:03:00 and Apple.
0:03:03 I don’t know if there are others that pop into people’s minds.
0:03:05 Pepsi and Coke, maybe?
0:03:06 Pepsi and Coke, sure.
0:03:07 Boeing and Airbus?
0:03:08 Yeah, definitely.
0:03:09 Visa MasterCard?
0:03:12 The Discover fans would agree.
0:03:20 OK, the episode you are about to hear is called America’s Hidden Duopoly, first published,
0:03:22 as I mentioned, several years ago.
0:03:27 We’ve updated facts and figures as necessary, but things being what they are, there wasn’t
0:03:29 all that much updating needed.
0:03:33 What is new is a conversation later on with Andrew Yang about what could and should be
0:03:34 done.
0:03:39 I think this is one of the most important episodes we’ve ever made, and that is reflected
0:03:42 in the amount of correspondence we still get about this topic.
0:03:46 And that’s why we thought this episode was due for an update.
0:03:52 As always, thanks for listening.
0:03:57 Imagine a gigantic industry that’s being dominated by just one or two companies.
0:03:59 Actually, you don’t have to imagine.
0:04:04 Google has more than 90% of the global search engine market.
0:04:08 So not quite a monopoly, but pretty close.
0:04:14 Such cases are rare, but not so rare is the duopoly when two firms dominate an industry
0:04:21 like Intel and AMD and computer processors, Boeing and Airbus and jet airliners, the Sharks
0:04:25 and the Jets and the fictional gangs from the 50s industry.
0:04:34 But surely the most famous duopoly is this one.
0:04:45 The rivalry between Coca-Cola and Pepsi-Cola goes back to the 19th century.
0:04:50 Coke was long dominant, but in the 1970s and 80s, Pepsi gained ground and marketed hard
0:05:05 to younger consumers.
0:05:11 Coke’s internal research found that most people, even Coke employees, preferred Pepsi.
0:05:17 In 1985, they abandoned their classic recipe in favor of New Coke, which tasted more like
0:05:18 Pepsi.
0:05:19 This did not work out so well.
0:05:22 I’m Don Keough, president of the Coca-Cola Company.
0:05:26 When we brought you the new taste of Coke, we knew that millions would prefer it and
0:05:27 millions do.
0:05:31 What we didn’t know was how many thousands of you would phone and write asking us to
0:05:35 bring back the classic taste of original Coca-Cola.
0:05:38 Coke eventually got rid of New Coke altogether.
0:05:43 And despite the flip-flop, or maybe because of it, and the attendant-free media, in any
0:05:46 case, Coke regained the top spot.
0:05:52 Today, even as soda consumption falls, the rivalry rages on, with both companies adding
0:05:56 juices, teas, and waters to their portfolios.
0:06:01 You can afford to make those big acquisitions when you’ve got a ton of cash on hand, when
0:06:05 you’re one of just two companies sharing a huge market.
0:06:11 And there’s another advantage to being half of a duopoly, self-perpetuation.
0:06:16 This was covered pretty extensively in the media during the so-called cola wars.
0:06:19 The quote “war” is good for both of them.
0:06:26 I believe the Coke and Pepsi together, this cola war they’ve been in for decades now,
0:06:30 actually helped each other sell an awful lot of product.
0:06:35 There are plenty of reasons why duopolies exist, and they’re not necessarily all sinister.
0:06:41 In capitalism, scale is really important for all sorts of advantages to being big, which
0:06:47 leads big companies to get even bigger, gobbling up smaller companies and essentially dictating
0:06:50 the rules of their market.
0:06:53 Not everyone likes this trend.
0:06:58 In many quarters, there’s a strong appetite for a smaller scale, for mom-and-pop and Indian
0:06:59 artisanal.
0:07:06 But, let’s be honest, that smaller scale idea is cute, but it’s not winning.
0:07:09 What’s winning is dominance.
0:07:12 Other industries dominated by just a couple behemoths.
0:07:18 We’ve already given you a few examples from a variety of industries, but there’s another
0:07:24 duopoly, a mighty one, that you probably don’t even think about as an industry.
0:07:25 Which duopoly am I talking about?
0:07:27 I’ll give you some clues.
0:07:30 Let’s go back over what we just discussed about duopolies.
0:07:35 They’re big institutions that take advantage of their size to get even bigger.
0:07:39 I’m talking to consultants on both sides, many of whom have been doing this for a long
0:07:43 time, and they’ve never seen this amount of money.
0:07:49 As we said, not everyone likes this trend, but the opposition is not winning.
0:07:54 I’d like to see more competition, you know, competition makes a better product.
0:07:58 And this leaves an entire industry run by just two behemoths.
0:08:06 Ladies and gentlemen, my mother, my hero, and our next president.
0:08:13 And I could not be more proud tonight to present to you and to all of America my father and
0:08:21 our next president, Hillary Clinton, Donald J Trump.
0:08:26 Does it surprise you to hear our political system characterized as an industry?
0:08:28 It surprised this guy.
0:08:29 Absolutely never thought of it in those terms.
0:08:33 And that’s Michael Porter, the world famous business strategist.
0:08:36 And at the core of it is what we call the duopoly.
0:08:40 Comparing our political system to something like Coke and Pepsi, I can’t be right, can
0:08:41 it?
0:08:43 No, Porter says.
0:08:44 It’s worse than that.
0:08:49 Coke and Pepsi don’t control their market nearly as fully as the Republicans and Democrats
0:08:50 do.
0:08:53 Even in soft drinks, we have a lot of new competitors.
0:08:57 Even though Coke and Pepsi are so big, they don’t truly dominate.
0:09:02 Indeed, Coke and Pepsi only control about 70 percent of the soft drink market.
0:09:08 At least they’ve got the Dr. Pepper Snapple Alliance to worry about, whereas Republicans
0:09:14 and Democrats, you can take all the libertarians and independence, the Green Party, working
0:09:20 families party, the American Delta Party, the United States Pirate Party, which is a
0:09:21 real thing.
0:09:26 You add them all together and they’re not even close to Dr. Pepper.
0:09:31 And yet from both Republicans and Democrats in Washington, we’ve been hearing the same
0:09:33 complaint for decades now.
0:09:36 Washington is totally broken.
0:09:38 Washington is broken.
0:09:40 This system is broken.
0:09:41 It’s not working.
0:09:42 Washington is not working.
0:09:46 Mr. Speaker, Washington is broken.
0:09:50 But what if the Washington is broken idea is just a line?
0:09:53 I like to teach the world to sing.
0:09:57 Maybe it’s even a slogan, but the industry approves.
0:10:04 Yeah, what if they’re just selling and we’re buying?
0:10:05 What if it’s not broken at all?
0:10:10 The core idea here is that Washington isn’t broken.
0:10:17 In fact, it turns out that Washington is doing exactly what it’s designed to do today on
0:10:19 Freakonomics Radio.
0:10:22 Is Washington really an industry just like any other?
0:10:23 How to get that way?
0:10:25 And what’s it mean?
0:10:44 And when the duopoly wins, does that mean the rest of us lose?
0:10:50 This is Freakonomics Radio, the podcast that explores the hidden side of everything with
0:11:01 your host, Stephen Dubner.
0:11:07 Once upon a time, there was a dairy products company in Wisconsin called Gale Foods, G-E-H-L.
0:11:09 My name is Katherine Gale.
0:11:11 Katherine Gale was the CEO of the company.
0:11:15 It had been founded well over a century earlier by her great-grandfather.
0:11:21 For years, Gale Foods sold the standard dairy items, butter, milk, ice cream.
0:11:25 In the 1960s, they got into pudding and cheese sauces.
0:11:31 And more recently, Gale Foods kept keeping up with the times, high-tech food manufacturing,
0:11:37 meaning low-acid, aseptic processing and packaging using robots, which creates shelf-stable foods
0:11:40 without the use of preservatives.
0:11:45 The process is also useful for products like weight loss shakes and iced coffee drinks.
0:11:50 After Katherine Gale, Gale Foods had more than 300 employees and was doing nearly $250 million
0:11:55 a year in sales, but there were a lot of challenges.
0:11:56 Why?
0:12:00 Because the food industry is incredibly competitive.
0:12:06 There are new competitors all the time, also new technologies, new consumer preferences.
0:12:11 So to plot a path forward, Gale turned to one of the most acclaimed consultants in the
0:12:12 world.
0:12:13 I’m Michael Porter.
0:12:18 I’m a professor at Harvard Business School, and I work most of the time on strategy and
0:12:20 competitiveness.
0:12:22 Porter is now in his late 70s.
0:12:26 As an undergraduate, he studied aerospace and mechanical engineering.
0:12:30 Then he got an MBA and a PhD in business economics.
0:12:36 So he understands systems as well as how things are made within those systems.
0:12:41 He’s written landmark books called Competitive Strategy and On Competition.
0:12:45 He is cited more than any other scholar in the field.
0:12:50 He’s best known for creating a popular framework for analyzing the competitiveness of different
0:12:51 industries.
0:12:55 The framework that I introduced many years ago says that there’s these five forces.
0:12:59 These five forces help determine just how competitive a given industry is.
0:13:07 The five forces are the threat of new entrants, the threat of substitute products or services,
0:13:13 the bargaining power of suppliers, the bargaining power of buyers, and rivalry among existing
0:13:15 competitors.
0:13:20 We’re not there yet, but if you want to jump ahead and consider how these forces apply
0:13:24 to our political system, I’m going to say them again, the threat of new entrants, the
0:13:29 threat of substitute products or services, the bargaining power of suppliers, bargaining
0:13:33 power of buyers, and rivalry among existing competitors.
0:13:39 Anyway, you can see why someone like Catherine Gale, the CEO of a century old food company,
0:13:44 might want to bring in someone like Michael Porter to figure out what to do next.
0:13:47 It was a classic business strategy exercise.
0:13:53 Now Gale, in addition to her family business, had another abiding interest, politics.
0:14:00 Yes, I’ve certainly moved around in the partisan classification.
0:14:03 During high school, she was a Republican.
0:14:04 Over time, she drifted left.
0:14:11 My daughter actually, when she was six, came to me and said, “Mommy, I think I’m a Republican
0:14:16 or maybe a Remicrat, and I think that gives a good sense of where things are at in our
0:14:17 household.”
0:14:23 In 2007, Gale joined the National Finance Committee of Barack Obama’s presidential campaign.
0:14:26 She became one of his top fundraisers.
0:14:30 A couple of years after Obama was elected, Gale joined the board of a government organization
0:14:37 called the Overseas Private Investment Corporation, which helps U.S. firms do business in emerging
0:14:38 markets.
0:14:43 I was paying a lot of attention to what was happening in Washington, D.C.
0:14:48 Gale did not like what she saw in Washington, D.C. She didn’t like it one bit.
0:14:55 It became really clear to me that this fight was not about solving problems for American
0:14:56 people.
0:15:00 This fight was about one party beating the other party and that the parties were more
0:15:06 committed to that than to actually solving problems or creating opportunities.
0:15:14 Eventually, I understood that it didn’t matter who we elected, it didn’t matter the quality
0:15:16 of the candidates.
0:15:22 Once it became clear to me that it was a systems problem, I switched from investing my time
0:15:29 in searching for the next great candidate and turned an eye to the fundamental root-cause
0:15:36 structures in the political system that pretty much guarantee that as voters, we are perpetually
0:15:37 dissatisfied.
0:15:42 So, she started raising money for nonpartisan organizations working toward political reform.
0:15:49 And one of the things that became clear is that there was no thesis for investment in
0:15:51 political reform and innovation.
0:15:55 In other words, people didn’t want to give money to nonpartisan organizations working
0:15:57 toward political reform.
0:16:01 They only wanted to give money to political parties and their candidates.
0:16:05 In fact, Catherine Gale found that potential donors had a hard time believing that such
0:16:09 a thing as nonpartisan political reform even existed.
0:16:14 That’s how conditioned they were to seeing the political system through a two-party lens.
0:16:19 It was around this time that Catherine Gale began meeting with Michael Porter.
0:16:23 She had brought him in to Gale Foods to help figure out the company’s strategy going forward,
0:16:28 keeping in mind his five famous forces about industry competitiveness.
0:16:34 New rivals, existing rivalries, substitute products, supplier power, and customer power.
0:16:42 I would consistently make the case to Michael that, wow, how we’re analyzing this industry
0:16:47 of low-acid aseptic food production, which is the business I was in, all of these tools
0:16:51 are directly applicable to analyzing the business of politics.
0:16:56 Frankly, I knew almost nothing about politics, but the more I heard and the more we talked,
0:17:00 the more it became clear that we really needed to take a fresh look here.
0:17:08 So it was out of that crucible of analyzing a traditional business strategy and at the
0:17:13 same time devoting so much time to political reform and innovation that it became clear
0:17:19 that politics was an industry, the industry was thriving, and that all of the tools of
0:17:22 conventional business analysis were applicable here.
0:17:28 And that’s where looking at this as an industry starts to provide some power.
0:17:29 Okay.
0:17:35 So you came to the conclusion that politics is an industry much like many of the other
0:17:39 industries that you’ve been studying over your career.
0:17:42 You never really thought of it in those terms before?
0:17:44 Really never thought of it in those terms.
0:17:50 We always thought of politics as a public institution, that the rules were somehow codified
0:17:53 in the rule of law and in our constitution.
0:17:59 But what we came to see is that politics is really about competition between largely
0:18:02 private actors.
0:18:05 And at the core of it is what we call the duopoly.
0:18:08 The duopoly, Republicans and Democrats.
0:18:18 And that competition has been structured around a set of practices and rules and in some cases
0:18:25 policies that have been created over time, largely by the actors themselves.
0:18:32 Actually the founders left a lot of room in terms of how the actual plumbing would work,
0:18:40 but it was interesting multiple of our founders actually expressed a deep fear that parties
0:18:41 would take over.
0:18:46 John Adams said at one point, “There is nothing which I dread so much as a division of the
0:18:49 Republic into two great parties.
0:18:53 Each arranged under its leader in concerting measures in opposition to each other.”
0:18:59 And if you take a look at Washington’s farewell address, which he wrote in 1796, he talks
0:19:06 about dangers which could come in front of the Republic in the future and he specifically
0:19:07 focuses on two.
0:19:12 One is foreign influence and the other is partisanship.
0:19:18 The other danger is the formation of strong parties.
0:19:22 Having come to the conclusion that the political system operated more like a traditional industry
0:19:28 than a public institution, Catherine Gale and Michael Porter set down their ideas in
0:19:29 a Harvard Business School report.
0:19:36 It’s called “Why Competition in the Politics Industry is Failing America.”
0:19:41 When you read the paper, right there under key findings is this sentence in bright red
0:19:42 print.
0:19:46 “The political system isn’t broken, it’s doing what it is designed to do.”
0:19:54 In other words, it was no coincidence that politics had become self-sustaining, self-dealing
0:19:56 and self-centered.
0:20:01 They were the blue team and the red team, kind of like Pepsi and Coke.
0:20:06 Essentially, they divided up an entire industry into two sides.
0:20:13 We ended up seeing that it wasn’t just the parties competing, it’s that they had created
0:20:19 influence and in a sense captured the other actors in the industry.
0:20:27 You have media and political consultants and lobbyists and candidates and policies all
0:20:32 divided onto one of two sides.
0:20:35 What you see is the system has been optimized over time.
0:20:41 For the benefit of private, gain-seeking organizations are two political parties and
0:20:46 they’re industry allies, what we together call the political industrial complex.
0:20:52 This industry has made it very, very hard to play at all if you’re not playing their
0:20:53 game.
0:21:00 How does the political industry compare in size and scope, dollars, employees, direct
0:21:06 and indirect, penetration and influence to other industries that you’ve studied, pharmaceutical
0:21:08 industry, auto industry and so on?
0:21:13 It’s a great question and we have done enormous amounts of work on it.
0:21:19 It turns out to be very difficult to get what I would call a completely comprehensive answer.
0:21:26 We estimate that in the most recent two-year election cycle, the industry’s total revenue
0:21:29 was approximately $16 billion.
0:21:37 This is not the biggest industry in the economy, but it’s substantial.
0:21:42 It would be one thing if this large industry were delivering value to its customers who
0:21:45 are supposed to be us, the citizenry.
0:21:49 But Gail and Porter argue that the political industry is much better at generating revenue
0:21:56 for itself and creating jobs for itself while treating its customers with something closer
0:22:01 to disdain, think about cable TV on steroids.
0:22:04 And the numbers back up their argument.
0:22:10 Customer satisfaction with the political industry is at historic lows, just 16% of Americans
0:22:14 currently say they trust the federal government.
0:22:20 In terms of popularity, it ranks below every private industry that includes the healthcare
0:22:25 and pharmaceutical industries, the airline industry and yes, cable TV.
0:22:31 Generally, in industries where customers are not happy and yet the players in the industry
0:22:34 are doing well, you’ll see a new entrant.
0:22:40 You’ll see a new company come into business to serve those customers.
0:22:47 A new company like Netflix or Hulu or Amazon Prime or Sling TV or, well, you get the point.
0:22:53 So in today’s world, we have the majority of voters say in polls that they would rather
0:22:55 have an independent.
0:23:00 So in a normal industry, you’d have a whole new competitor coming up that was about independence
0:23:02 to serve that unmet need.
0:23:06 And yet in politics, we don’t see any new entrants.
0:23:07 So why is that?
0:23:14 Well, it turns out that our political parties work well together in one particular area.
0:23:22 And that is actually colluding together over time behind the scenes to create rules and
0:23:30 practices that essentially erect barriers to entry, ways to keep out new competition.
0:23:37 In their report, Gail and Porter identify the five key inputs to modern political competition.
0:23:44 Banks, campaign talent, voter data, idea suppliers and lobbyists.
0:23:49 Here’s what they write, “Increasingly, most everything required to run a modern campaign
0:23:55 and govern is tied to or heavily influenced by one party or the other, including think
0:23:59 tanks, voter data, and talent.”
0:24:06 What’s happened is the parties have now divided up the key inputs to political competition.
0:24:12 And if you’re not a Republican or a Democrat, then you’re in trouble in even finding a campaign
0:24:17 manager, much less getting the best up-to-date voter data and the best analytics and so forth.
0:24:21 It’s not enough to monopolize the campaign machinery.
0:24:25 Gail and Porter argue that the political industry has essentially co-opted the media, which
0:24:29 spreads their messages for free.
0:24:31 This helps Donald Trump tonight.
0:24:38 This is a big, big beginning to the end of what has been a witch on.
0:24:42 Trump Watch, now man in the White House is behaving now like a character on that old
0:24:45 detective show, Colombo.
0:24:51 Perhaps most important, the two parties rig the election system against would-be disruptors.
0:24:58 The rules they set allow for partisan primaries, gerrymandered congressional districts, and
0:25:00 winner-take-all elections.
0:25:05 Each side of the duopoly, Republicans and Democrats and the players that are playing
0:25:15 for those teams, have, over time, worked to improve their own side’s fortunes.
0:25:24 But collectively, they also have come together to improve the ability of the industry as
0:25:32 a whole to protect itself from new competition, from third parties that could threaten either
0:25:35 of the two sides of the duopoly.
0:25:38 What the parties have done is they’ve been very, very clever.
0:25:43 They don’t compete head-to-head for the same voters.
0:25:46 They’re not competing for the middle.
0:25:56 It’s likely that we have a much more powerful center, a much more powerful group of moderates
0:26:00 than our current duopoly demonstrates.
0:26:06 What they’ve understood is competing for the middle is a sort of destructive competition.
0:26:08 It’s kind of a zero-sum competition.
0:26:14 So the parties have divided the voters and kind of sort of ignored the ones in the middle
0:26:16 because they don’t have to worry about them.
0:26:22 Because if the middle voter is unhappy, which most middle voters are today in America, what
0:26:23 can they do?
0:26:31 The only thing either party has to do to thrive, to win the next election, is to convince the
0:26:39 public that they are just this much less hated than the one other choice that the voter has.
0:26:45 That gives those two companies, the Democrats and the Republicans, the incentive to prioritize
0:26:48 other customers.
0:26:55 Their target customer on each side is the special interest and the partisans.
0:27:00 They get a lot of resources and a lot of campaign contributions and massive amounts of lobbying
0:27:07 money to try to get their support with whatever those partisan or special interest needs are.
0:27:16 There is now an entire industry of politics that moves forward independent of whether
0:27:20 that industry actually solves problems for the American people.
0:27:25 What’s happened is that the barriers to getting into this industry and providing a different
0:27:34 type of competition have been built to enormous heights, which has allowed the parties to
0:27:41 structure the nature of the rivalry among themselves in a way that really maximizes
0:27:50 their benefit to them as institutions, but doesn’t actually serve the public interest.
0:27:54 Well, that’s depressing, isn’t it?
0:27:58 Insightful, perhaps, but depressing nonetheless.
0:28:02 So do Catherine Gale and Michael Porter have any bright ideas for tackling this problem?
0:28:03 Yes.
0:28:04 Yeah.
0:28:05 Oh, yeah.
0:28:06 Oh, my God.
0:28:19 That’s coming up right after this.
0:28:24 The business strategist Michael Porter and the CEO turned political reformist Catherine
0:28:29 Gale argue in a Harvard Business School report that our political system has been turned
0:28:32 into an industry with no real competition.
0:28:39 The industry’s primary beneficiaries are itself and its many ancillary participants,
0:28:43 including the media, but the vast majority of Americans who are somewhere in the middle
0:28:45 are feeling very, very disaffected.
0:28:50 The lack of vigorous competition, they argue, has allowed the Democrats and Republicans
0:28:56 to carve out diametrically opposed political bases, fairly narrow and extremely partisan.
0:29:03 Years ago, we created partisan primaries in order to take the selection of a candidate
0:29:08 out of this quote-unquote smoke-filled back room and give the selection of the party candidate
0:29:10 choice to citizens.
0:29:13 So that was designed to give more control to citizens.
0:29:19 It turns out it has had a very deleterious effect on competition and has increased the
0:29:21 power of the parties.
0:29:26 And the parties, Gale and Porter argue, use those partisan bases to support the desires
0:29:32 of the political industry’s true customers and its wealthiest, special interests, industries
0:29:38 like healthcare, real estate and financial services, also labor unions and lobbyists.
0:29:45 In this duopolistic business model, polarization is a feature, not a bug.
0:29:50 We have a chart in our report that just selects what we call landmark type legislation over
0:29:53 the last 50, 60 years.
0:29:59 And if you go back even 20 or 30 years ago, the landmark legislation was consensus.
0:30:08 For instance, the Social Security Act of 1935 had 90% Democratic support and 75% Republican.
0:30:16 The Civil Rights Act of 1964 had 60% Democratic support and, again, 75% Republican.
0:30:21 Now for the last decade or two, that’s been the opposite pattern.
0:30:26 The only way landmark legislation gets passed is one party has enough votes to pass that
0:30:27 by itself.
0:30:33 The Affordable Care Act, also known as Obamacare, was passed in 2010 with zero Republican votes
0:30:35 in Congress.
0:30:42 President Trump’s 2018 tax reform bill, zero Democratic votes.
0:30:48 So your diagnosis suggests that this industry serves itself incredibly well.
0:30:55 It suggests that it serves us, the citizenry, really poorly, and also suggests that more
0:31:00 competition would improve the industry as it does in just about every industry.
0:31:06 But just having more competition in parties doesn’t seem to be the answer alone.
0:31:09 I mean, there are plenty of multi-party political systems around the world that have similar
0:31:14 cases of dysfunction and corruption and cronyism like ours.
0:31:20 So how direct a step or direct a prescription would that be?
0:31:26 I think in our system in particular, where we have only two and they have been able to
0:31:33 actually set up the rules of competition that reinforce their partisan competition, dividing
0:31:39 voters and so forth, more competition I think would be incredibly valuable.
0:31:41 But it has to be a different kind of competition.
0:31:47 It can’t be just another party that’s going to split our electorate into three partisan
0:31:48 groups.
0:31:56 And so in our work, we focus on what would it take to make the competition less about
0:32:02 dividing the voters and how could we make the competition more around building up more
0:32:06 choices for voters that were more about solutions.
0:32:10 By the way, let me be clear, we’re not against parties per se.
0:32:18 What we are against is the nature of the competition that our existing dominant parties have created.
0:32:23 When you suggest that these rules were carefully constructed, I guess if I were thinking about
0:32:29 something other than politics, the first thought that would come to mind then is, well, collusion,
0:32:30 right?
0:32:36 If I can be one member of a duopoly, I actually hate my rival much less than I hate the idea
0:32:41 of anybody else who would interrupt that rivalry because we’re splitting the spoils now.
0:32:46 Do you have any evidence of collusion between the parties to create a system that essentially
0:32:47 keeps the rest out?
0:32:49 First of all, that is the right word.
0:32:51 It is collusion.
0:32:55 There’s probably a legal definition of collusion, which I don’t know, I’m not a lawyer, but
0:32:57 the effect is exactly the same.
0:33:05 The parties have agreed on a set of rules that benefit the duopoly and preserve this nature
0:33:07 of competition.
0:33:10 You can really put rules into a number of buckets.
0:33:14 There’s legislative machinery, as we call it, which is how the Senate and the Congress
0:33:20 are run, and then there’s the election rules having to do with what is the primary process
0:33:26 like and what does it take to get on the ballot as an independent and the various campaign
0:33:29 finance stuff that surrounds elections.
0:33:35 Has anyone ever considered filing whether an earnest or not an antitrust suit against
0:33:36 Republicans and Democrats?
0:33:43 Stephen, that’s a great question.
0:33:45 I have.
0:33:52 We’ve actually had a significant effort to see if that’s feasible, what the law is, looking
0:33:57 at the antitrust statutes, but this is absolutely what antitrust policy is all about.
0:34:03 It’s creating open, effective competition that serves the customer and the public interest.
0:34:06 This industry cries out for that.
0:34:10 In the report, you discuss the many advantages the two parties have.
0:34:15 I think we all recognize that there’s real power in size and there’s leverage, especially
0:34:18 when you’re making your own rules for your own industry.
0:34:23 You write that they use those advantages to retain control and to constrict competition,
0:34:24 so on.
0:34:31 That’s me, that Donald Trump really got around a lot of those advantages.
0:34:36 You write that the parties, quote, control the inputs to modern campaigning governing,
0:34:39 but he didn’t rely on that, really.
0:34:44 You wrote that the parties co-opt channels for reaching voters, but he kind of co-opted
0:34:49 or maybe took advantage of his own channels, including free media and his own social media
0:34:50 accounts.
0:34:55 You write that the parties, quote, erect high and rising barriers to new competition, but
0:35:00 in the case of Trump, you know, his own party tried as hard as they could to erect the highest
0:35:02 barrier and couldn’t keep them out.
0:35:09 And so on those fronts, it would strike me that the parties failed, failed to constrict
0:35:11 a certain competitor.
0:35:17 So I don’t know how you personally feel about President Trump, but according to those advantages
0:35:23 and his end run around them, it would sound as though he is at least one example of the
0:35:25 solution to the problems that you’re describing.
0:35:31 Well, yeah, I think that is definitely a good question, and we must take that on.
0:35:34 I would say a couple of things.
0:35:41 First of all, the best choice that President Trump made was to run in a party.
0:35:46 He had to pick one side of the duopoly because he knew he couldn’t win as an independent.
0:35:53 He had actually explored running as an independent in previous years, but that in the current
0:35:57 system is not seen to be a winning strategy.
0:36:02 The other thing I would say about him was that he had resources.
0:36:08 In the end, he didn’t have to use that many of them, but he could almost have self-financed
0:36:15 and he was appealing to a certain subset of the partisans, maybe a somewhat neglected
0:36:18 subset of the people on the right.
0:36:26 And he had a very strong existing brand identity, so he was able to get a lot of recognition
0:36:30 and coverage without having to spend that much on advertising.
0:36:38 He represents a personality-driven campaign within a party, but we don’t believe that
0:36:45 he represents fundamentally transforming the structure of competition in the industry.
0:36:51 So far, Trump is just the third in a row president that may have said that he was going to do
0:36:55 things differently and cut across lines and all that kind of stuff.
0:37:00 But frankly, he didn’t, Obama didn’t, and President Bush didn’t.
0:37:05 Even though President Obama and President Bush campaigned on bipartisanship and bringing
0:37:07 people together, they failed.
0:37:11 So I think that those recent case studies are sobering.
0:37:17 Okay, remember, this conversation was from 2018 just to put this in context.
0:37:23 But back to the core issue, some political scientists argue that Gale and Porter’s analysis
0:37:26 of party power has it backwards.
0:37:30 These scholars say our political system is in bad shape because the parties have gotten
0:37:32 weaker over time.
0:37:37 They argue that stronger parties could help beat back special interests and produce more
0:37:39 compromise and moderation.
0:37:44 You want some interesting evidence for this party’s are weak argument?
0:37:47 Think back to the 2016 presidential election.
0:37:52 You had one national party, the Democrats, that tried as hard as it could, to the point
0:37:59 of cheating, essentially, to pre-select its candidate, Hillary Clinton, who then lost.
0:38:04 And you had the other national party, the Republicans, try as hard as it could to keep
0:38:10 a certain candidate off the ballot, but they failed and he won.
0:38:16 It’s true that the parties are not as strong as they were in the past.
0:38:21 But both sides of the political industrial complex, Democrats and Republicans, are as
0:38:22 strong as ever.
0:38:26 It’s just that the power may not all reside within the party.
0:38:30 If parties were stronger, that doesn’t mean they’d be moderating forces.
0:38:31 That’s what some people say.
0:38:33 I really don’t understand that argument.
0:38:36 The stronger they are, the less moderating they’re going to be, given the nature of
0:38:39 the competition that’s been created.
0:38:45 I think we are really asking for too little when we say let’s tinker around the edges
0:38:51 and get stronger parties so that we can have a little bit of a cleaner process.
0:38:57 What we believe is we need to create structural reforms that would actually better align the
0:39:05 election process and the legislative process with the needs of the average citizen.
0:39:06 All right.
0:39:11 So you’ve diagnosed the problem in a really interesting and profound way by overlaying
0:39:17 a template that’s more commonly applied to firms to the political industry.
0:39:20 And of course, it theoretically leads to a different set of solutions than we’ve typically
0:39:21 been hearing.
0:39:24 So then you discuss four major solutions.
0:39:26 Let’s go through them point by point.
0:39:30 Number one, you talk about restructuring the election process itself.
0:39:34 Give me some really concrete examples of what that would look like.
0:39:38 I’d also love to hear whether you do see some evidence of these examples happening because
0:39:43 it does seem there has been some election reform in states and regions around the country.
0:39:44 Yes.
0:39:47 Well, when we think about reform, we have to think about really two questions.
0:39:49 Number one, is a reform powerful?
0:39:52 Will it actually change the competition?
0:39:56 So a lot of what people are proposing now is actually not going to make much difference.
0:39:59 So term limits are a great example.
0:40:05 We aren’t fans of term limits because we think that without changing the root cause incentives,
0:40:10 you’ll actually just have different faces playing the same game.
0:40:15 So number one is we have to re-engineer the election processes, the election machinery.
0:40:18 And there are three electoral reforms that are important.
0:40:20 We call it the election trifecta.
0:40:27 The first and probably the single most powerful is to move to nonpartisan single ballot primaries.
0:40:31 Currently, if you’re going to vote in the primary, you show up and you get a Democratic
0:40:37 ballot or a Republican ballot, and then you vote for who’s going to represent that party
0:40:40 in the general election.
0:40:43 And the one that’s on the farthest left or the one that’s on the farthest right has
0:40:50 a tendency to win because the people that turn out for primaries are a relatively small
0:40:53 fraction of even the party.
0:40:58 And those are the people that show up because they’re really partisans and they really have
0:41:02 special interests and they really, really care about getting somebody on the ballot
0:41:04 that’s for them.
0:41:11 In a single ballot, nonpartisan primary, all the candidates for any office, no matter
0:41:15 what party they’re in, are on the same ballot.
0:41:22 And we propose that the top four vote getters advance out of that primary to the general
0:41:23 election.
0:41:29 And the reason a single primary where everybody’s in it is so important is that if you want
0:41:34 to win, you want to appeal to as many voters as you can.
0:41:38 And therefore, you’re going to get people that are not just trying to appeal to their
0:41:39 particular extreme.
0:41:46 The second part of the Gale Porter election reform trifecta, ranked choice voting.
0:41:47 Here’s how ranked choice voting works.
0:41:52 You’ll now have four candidates that made it out of the top four primary.
0:41:56 Those four candidates will all be listed on the general election ballot.
0:42:02 And you come and vote for them in order of preference.
0:42:03 So it’s easy.
0:42:05 This is my first choice.
0:42:06 This candidate’s my second choice.
0:42:08 It’s my third choice.
0:42:09 This is my fourth choice.
0:42:17 When the votes are tabulated, if no candidate has received over 50 percent, then whoever
0:42:23 came in last has dropped and votes for that candidate are then reallocated to those voters’
0:42:33 second choice and the count is run again until one candidate reaches over 50 percent.
0:42:40 What that does is it gives a candidate a need to appeal to a broader group of voters.
0:42:46 And very importantly, it eliminates one of the hugest barriers to competition in the
0:42:51 existing system, and that is the spoiler argument.
0:42:59 So what happens currently is that if there’s, let’s say, an attractive third party candidate
0:43:04 or an independent candidate, both Democrats and Republicans will make the argument that
0:43:11 nobody should vote for them because they will simply draw votes away from a Democrat or
0:43:18 draw votes away from a Republican and therefore spoil the election for one of the duopoly
0:43:19 candidates.
0:43:24 Once you have ranked choice voting, everybody can pick whoever they want as their first
0:43:26 choice, second choice, third choice.
0:43:34 No vote is wasted and no vote spoils the election for another candidate.
0:43:38 And then the last part of the trifecta is nonpartisan redistricting.
0:43:40 Gerrymandering has to go.
0:43:45 When parties control drawing the districts, they can draw districts that will be more
0:43:52 likely to tilt in favor of their party, and they can end up having a disproportionate
0:44:00 number of “safe” Republican seats or “safe” Democratic seats by the way that they draw
0:44:05 the districts, and we want to make that go away.
0:44:10 In addition to election rule reforms, Porter and Gale would like to see changes to the
0:44:12 rules around governing.
0:44:19 Congress makes its own rules for how it functions, and over time, these rules, customs and practices
0:44:28 have been set in place to give an enormous amount of power to the party that controls
0:44:29 the chamber.
0:44:33 And this is sort of collusion in a way, is when the other party takes over, they do it
0:44:34 the same way.
0:44:43 So we propose moving away from partisan control of the day-to-day legislating in Congress
0:44:47 and also in state legislatures as well.
0:44:52 The third leg of their reform agenda is about money in politics, but their analysis led
0:44:56 them to a different conclusion than many reformers.
0:45:04 Where we differ with so many people championing these reforms is that we don’t believe that
0:45:07 money in politics is the core issue.
0:45:13 The problem is really this nature of competition that leads to this partisanship, and that’s
0:45:17 not a money issue per se, that’s a structural issue.
0:45:22 If you take money out of politics without changing the rules of the game, you’ll simply
0:45:27 make it cheaper for those using the existing system to get the self-interested results
0:45:33 that they want without changing the incentives to actually deliver solutions for the American
0:45:34 people.
0:45:42 Having said that, we do believe that there are benefits to increasing the power of smaller
0:45:50 donors, and so the reforms that we have suggested are primarily focused on increasing the power
0:45:53 of smaller donors.
0:45:58 For instance, having the government itself match donations from small donors.
0:46:03 We should note that most of the ideas Gail and Porter are presenting here are not all
0:46:07 that novel if you follow election reform even a little bit.
0:46:14 Even we poked into a lot of them, an episode called “Ten Ideas to Make Politics Less Rotten.”
0:46:20 I guess it’s one measure of how successful and dominant the political duopoly is that
0:46:26 plenty of seemingly sensible people have plenty of seemingly sensible reform ideas that for
0:46:28 the most part gain very little traction.
0:46:31 It is definitely challenging.
0:46:32 This is a ground game.
0:46:37 We’re not going to be able to do this in a year or one election cycle because the resources
0:46:43 that the current duopoly have to deploy to play their game are substantial.
0:46:48 Despite the rather depressing or at least sobering picture that you paint of the political
0:46:53 industry, throughout the report, you express quite a bit of optimism.
0:47:02 I want to know why or how because I don’t see the avenue, I guess, for optimism.
0:47:07 Well, I do think we have a basic optimism.
0:47:14 We have no sense that it will be easy to change the rules of this game for a whole variety
0:47:15 of reasons.
0:47:18 But the good news is we’ve had some progress.
0:47:21 We’ve got some nonpartisan primary states now, including California.
0:47:23 We’ve got ranked choice voting in Maine.
0:47:31 What seems to be building in America is a growing appetite and a growing recognition that this
0:47:33 isn’t working for our country.
0:47:40 I think the younger generation are particularly outraged and concerned and open to all kinds
0:48:06 of new ideas, but I think it’s going to take time.
0:48:15 Coming up after the break, Andrew Yang’s 2024 take on the duopoly and some signs of change.
0:48:16 I’m Stephen Dubner.
0:48:17 This is Freakonomics Radio.
0:48:32 We’ll be right back.
0:48:36 Since we published the original episode you just heard, America’s Hidden Duopoly, one
0:48:41 of the prominent reforms embraced by Michael Porter and Catherine Gale has been spreading
0:48:42 at least a bit.
0:48:47 Alaska and Maine have used ranked choice voting in statewide elections.
0:48:52 It has also been introduced in local elections, including the 2021 race in New York City to
0:48:54 pick a new mayor.
0:48:59 One of the candidates, Andrew Yang, was one of the most enthusiastic supporters of ranked
0:49:02 choice voting, but it didn’t seem to help him.
0:49:06 In a competitive Democratic primary, he came in fourth.
0:49:10 That was despite big name recognition from his presidential run.
0:49:16 So there would seem to be something about Andrew Yang, the candidate that voters don’t
0:49:17 love.
0:49:23 But that’s fair, because there’s a lot about the voting system that Andrew Yang doesn’t
0:49:24 love.
0:49:27 So, what’s he been up to lately?
0:49:32 I’m co-chair of the Forward Party, the third biggest political party in the country by resources,
0:49:35 though there’s a very steep drop off between number two and number three.
0:49:39 What is the drop off between number two and number three in whatever metric you’d like
0:49:41 to measure, whether it’s people, dollars, et cetera?
0:49:48 Using dollars, I’d say there’s probably something like a 98.5% drop off.
0:49:50 So what is the Forward Party?
0:49:55 What are you trying to accomplish, especially in this current election cycle?
0:50:01 The Forward Party is a movement of independent-minded Americans who are trying to reform our political
0:50:06 system, so it actually responds to us and the challenges of this era.
0:50:12 And we do that by pushing ballot reforms and backing positive candidates with any letter
0:50:13 next to their name.
0:50:17 So it could be a Democrat, it could be an independent, it could be a Republican.
0:50:20 Is the Forward Party endorsing or backing any Republicans yet?
0:50:25 We just recently announced the endorsement of a guy named John Curtis, who is running
0:50:29 for Mitt Romney’s old Senate seat, or soon to be old Senate seat.
0:50:33 There are 11 candidates in that race, eight of them have endorsed Donald Trump.
0:50:37 John Curtis has not endorsed Donald Trump and actually started something called the
0:50:40 Conservative Climate Caucus in Congress.
0:50:43 So he believes in climate change, shocker.
0:50:46 But a lot of Democrats would look up and say, “Oh, he’s gone our next to his name,
0:50:50 so, you know, can’t get behind him,” but we think that’s short-sighted.
0:50:55 So you’re not just a political person, but you’re an actual business person and you
0:50:59 understand the way the economy works, I would argue pretty well.
0:51:05 What are the downsides of duopoly writ large, whether it’s in an economic system or a political
0:51:06 system?
0:51:10 Because one might say, “Well, maybe it makes sense, because if there’s too much choice,
0:51:11 it gets baffling.”
0:51:15 And also, the bigger and more powerful you get, the more resources you have, the more
0:51:16 you know what you’re doing.
0:51:19 So maybe we should be in favor of duopoly.
0:51:23 Well, in the political sphere, what’s interesting, Stephen, is the vast majority of us, about
0:51:28 70% of Americans, live not under two-party rule, but one-party rule.
0:51:33 It’s not like Democrats are really trying to run and win in rural Missouri.
0:51:37 It’s not like Republicans are really trying to run and win in San Francisco.
0:51:44 You have these only 5% to 10% genuine swing districts, and then the major exception to
0:51:47 this is in the presidential.
0:51:50 Even in the presidential, your vote won’t matter, my vote won’t matter.
0:51:55 The only votes that are going to matter are based in Michigan, Pennsylvania, Wisconsin,
0:51:57 Arizona, Nevada, Georgia.
0:52:01 And that’s something that most Americans also just sort of shrugged and said, “I guess
0:52:08 that’s the way we do things,” but the duopoly is effectively one-party rule for about two-thirds
0:52:09 of the country.
0:52:15 So if, as you’re saying, making most districts basically one-party district is the root cause
0:52:19 of so much of this, what good would a third or fourth or fifth party do?
0:52:25 Well, the goal of any independent party, if they’re smart, is to try and reform the voting
0:52:30 system so you have more true accountability and a feedback loop between people and our
0:52:31 leaders.
0:52:37 In Alaska, they shifted to an all-party primary where voters can vote for a candidate of any
0:52:42 party with a top four getting through to the general and chosen via ranked-choice voting.
0:52:48 So a little-known former vice presidential nominee named Sarah Palin was on the ballot
0:52:52 in ’22, and in a customary system, she wins the Republican primary and probably wins the
0:52:55 general because it’s a red-leaning state.
0:53:00 But in the new system, there was a general election with multiple candidates, including
0:53:07 a fairly innocuous state legislator named Mary Paltola, who is very pleasant and congenial,
0:53:13 and a critical number of Alaskan voters placed Mary Paltola as their second choice, thus edging
0:53:16 out Sarah Palin.
0:53:21 And if Sarah Palin was back in D.C., we’d all be subject to clips of her saying something
0:53:26 crazy every week because there’d be a TV camera in her face every week.
0:53:31 And we were spared that because they changed the voting system in Alaska.
0:53:36 In the Senate race, in that same cycle in ’22, Lisa Murkowski was up for reelection.
0:53:39 She voted to impeach Donald Trump, which is a no-no.
0:53:43 It makes you run afoul of the base, eight out of 10 of the Republican House members
0:53:47 who made the same choice did not make it back to the primaries.
0:53:52 But Lisa Murkowski made it back because, again, Alaska essentially replaced their Republican
0:53:54 primary with an all-party primary.
0:53:59 And so Lisa Murkowski was able to get through in the general election because a critical
0:54:01 number of Alaskan voters ranked her second.
0:54:03 So a couple of things here.
0:54:06 Is an all-party primary the same as an open primary?
0:54:07 An open primary is different.
0:54:12 An open primary is something where, hey, you’re an unregistered voter.
0:54:17 You can show up and vote in our primary this once, and in some case, you have to register
0:54:21 as that party for the purposes of that vote, and then you can unregister.
0:54:26 A closed primary is you have to be registered four months in advance or something like that.
0:54:31 Nonpartisan primary, what they did in Alaska is the most dramatic, which is, hey, everyone
0:54:34 show up in the same primary.
0:54:35 You vote for your candidate.
0:54:36 I vote for my candidate.
0:54:38 We can all vote for whichever candidate we want.
0:54:42 We can even have multiple candidates from the same party running.
0:54:48 And then the true measure of popular will and representation will emerge as opposed to
0:54:52 slicing us into one party or another.
0:54:57 Were the Alaska outcomes more about the all-party primary or more about the ranked choice voting,
0:55:01 or did they dovetail perfectly?
0:55:05 You know, it’s an element where one plus one equals three, where nonpartisan primaries
0:55:08 are dramatic improvement, ranked choice voting, general elections are dramatic improvement,
0:55:13 but you put them together and you wind up with a candidate who genuinely has the backing
0:55:18 of more than 50.1% of the people.
0:55:19 So here’s the thing.
0:55:20 I know you a little bit.
0:55:21 We’ve spoken on this show a few times.
0:55:27 We’ve spoken off the show a few times, and I know you to be sincere and intelligent and
0:55:31 decent person who I think wants the best for a lot of people.
0:55:37 You also sound a little bit bonkers to me right now because you are tilting at windmills
0:55:39 that are gigantic.
0:55:44 You speak with sincerity, and I believe you, but do you expect to have any real effect
0:55:50 on the political system, whether in 2024 or in the next 10 years, with this forward party?
0:55:51 Oh, yeah.
0:55:56 We already have dozens of elected officials who are aligned with the forward party.
0:56:03 Two state senators in Pennsylvania, Lisa Boscola and Anthony Williams, the mayor of Fort Collins,
0:56:04 Colorado.
0:56:07 I mean, these are electeds who stood up already and said, “You know what?
0:56:12 I want to represent my constituents and I don’t want to be answerable to this mega party
0:56:18 that may or may not actually align with what the folks I represent believe in and value.”
0:56:24 And this is despite having a sliver of the resources of either the parties.
0:56:31 So if you could be a czar of some kind, even though we’re not a country that embraces czars
0:56:38 historically, and you had the ability to remake the political system, the electoral system,
0:56:44 and you’re not trying to do it in a drastic draconian overnight way, let’s say you could
0:56:51 build a 10-year plan, what would be the first three or five tenets of that 10-year plan?
0:56:56 We need elections that actually make our representatives answerable to us.
0:56:58 That’s the main thing.
0:57:03 We’ve let a bunch of negative things build up and our leaders are unresponsive.
0:57:07 If you had a genuine feedback loop, then all of a sudden our leaders would say, “Wait
0:57:08 a minute, what?
0:57:09 Like young people can’t afford a house?
0:57:10 That’s a problem.
0:57:16 What the cost of being a middle-class person with housing and transportation and education
0:57:20 and health care is going up and up and you feel distraught about it?
0:57:23 Let’s actually get to some of the root problems.”
0:57:28 And the way to do that visibly in an era when it’s very difficult to imagine our elected
0:57:33 leaders doing something against their self-interest is to go to states where they have the means
0:57:38 to change the voting system and say, “Look, guys, let’s just make it so that anyone can
0:57:45 vote for any candidate of any party, Allah, Alaska, Allah, we hope Nevada as of November,
0:57:50 and just march through as many states as possible freeing our elected leaders from party primaries
0:57:56 that right now keep them from making any meaningful progress on issues.
0:57:58 Here’s the thing about Andrew Yang.
0:58:04 He’s enthusiastic and he’s enthusiastic about ideas that I think are generally good ones.
0:58:10 But is he too enthusiastic about the odds of successful reform?
0:58:15 What do you make of his prediction that someone like him can push our political system in
0:58:17 a strong, positive direction?
0:58:25 No offense to Andrew Yang but his track record as a political forecaster is not so good.
0:58:29 Last year, he told me that Dean Phillips, the Minnesota congressman who challenged Joe
0:58:35 Biden in the Democratic presidential primaries, was going to perform very well in the early
0:58:40 states, so well that he would shake up the entire 2024 election.
0:58:45 But Phillips didn’t perform well and he ran back into the arms of his party and endorsed
0:58:46 President Biden.
0:58:50 You want to know why Phillips ran in the first place?
0:58:57 He was worried that Joe Biden was simply too weak a candidate to win and that backing him
0:59:03 would pave the way for a Trump victory, which Phillips being a Democrat did not want.
0:59:09 So getting back to Andrew Yang’s prediction, he was wrong that Dean Phillips would get
0:59:14 a lot of primary support by attacking Biden, but after Biden’s disastrous performance in
0:59:19 that first debate, many Democrats and their supporters, including the New York Times editorial
0:59:25 board, are calling for the president to be replaced on the Democratic ticket.
0:59:30 So maybe Andrew Yang was on to something after all.
0:59:31 That’s our show for today.
0:59:33 Sorry about my sore throat.
0:59:34 Thanks for listening.
0:59:40 I’d love to hear any feedback you have about this episode or the political duopoly in general
0:59:42 or anything else you want to say, really.
0:59:46 Our email is radio@freakonomics.com.
0:59:52 Coming up next time on the show, Daniel Kahneman is perhaps best known as the author of Thinking
0:59:58 Fast and Slow, but he also helped revolutionize the fields of both psychology and economics,
1:00:01 and his influence has been enormous.
1:00:03 Kahneman recently died at age 90.
1:00:09 A bunch of his peers, friends, and mentees recently got together to sort out just where
1:00:15 that influence has landed, and we were there with microphones.
1:00:19 He felt that this is the right way to do science.
1:00:24 I mean, partly, Daniel’s to blame, although he didn’t learn that before he passed away.
1:00:31 In adversarial collaborations, the arbiter is the research assistant, the tiebreaker,
1:00:34 and occasionally the therapist.
1:00:37 Did they pay you for that?
1:00:40 I’m getting paid the same as you, Maya.
1:00:42 That’s next time on the show.
1:00:47 Until then, take care of yourself and, if you can, someone else too.
1:00:49 Freakonomics Radio is produced by Stitcher and Renbud Radio.
1:00:55 You can find our entire archive on any podcast app, also at freakonomics.com, where we publish
1:00:57 transcripts and show notes.
1:01:01 This episode was produced by Greg Grzalski and Zak Lipinski.
1:01:06 Our staff also includes Alina Kulman, Augusta Chapman, Dalvin Abouaji, Eleanor Osborne,
1:01:12 Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, Julie Canfer,
1:01:17 Lyric Bowditch, Morgan Levy, Neil Coruth, Rebecca Lee Douglas, Sara Lilly, and Theo Jacobs.
1:01:20 Our theme song is Mr. Fortune by the Hitchhikers.
1:01:23 Our composer is Luis Guerra.
1:01:26 As always, thank you for listening.
1:01:28 I can see myself, but is this audio only?
1:01:29 It’s audio only.
1:01:31 You can take off your pants if you want.
1:01:32 Nice.
1:01:45 The Freakonomics Radio Network – the hidden side of everything.
1:01:46 Stitcher.
1:01:48 (soft music)
1:01:50 you
0:00:15 have found yourself thinking, “Really, these are the two best candidates the United States
0:00:16 has to offer?
0:00:19 How did that happen?”
0:00:23 The episode you’re about to hear can help explain how that happened.
0:00:29 The core of this episode was first published in 2018 during Donald Trump’s presidency.
0:00:33 This is an update, but we’ve also added a new voice.
0:00:36 Andrew, it’s Stephen.
0:00:37 How are you?
0:00:38 Hey, Stephen.
0:00:39 How are you, my friend?
0:00:40 First of all, just introduce yourself, please.
0:00:41 I am Andrew Yang.
0:00:49 I’m an all-around, interesting Bon Vivant.
0:00:51 Andrew Yang has been on this show before.
0:00:57 The first time was in early 2019 in an episode we called “Why Is This Man Running for President?”
0:01:02 Yang did run as a Democrat in the 2020 election, and for a time he was everyone’s favorite
0:01:07 entrepreneur, a businessman with a taste for policy research.
0:01:11 He offered sharp diagnoses and prescriptions for some of our country’s biggest economic
0:01:13 and social problems.
0:01:19 In support, there arose a substantial Yang gang, and his campaign caught fire for a while.
0:01:25 He made the big Democratic debate stage in 2020, but ultimately he flamed out.
0:01:29 In 2021, he ran for mayor of New York City.
0:01:31 He lost that election, too.
0:01:36 Soon after, he left the Democratic Party and launched what is called the “Forward Party.”
0:01:37 Why?
0:01:43 Imagine if you had a business, a restaurant, eight out of ten of your customers were unhappy,
0:01:48 and then you proceeded to change absolutely nothing for years at a time.
0:01:51 That’s the way most Americans interact with our political system.
0:01:56 Okay, so you recently gave this TED talk called “Why U.S. Politics Is Broken and How
0:01:57 to Fix It.”
0:01:59 Can you give me the TLDR on that?
0:02:00 Sure thing.
0:02:03 Why are we so ticked off all the time?
0:02:04 A lot of us are, at least.
0:02:07 And I tried to make the case in numbers.
0:02:13 There’s a 15% approval rating for U.S. Congress today and a 94% re-elect rate for incumbent
0:02:14 House members.
0:02:20 So the fiction we’ve been sold is our leaders have to make 51% of us happy to stay in office.
0:02:23 That’s actually not true for nine out of ten seats.
0:02:28 The real job of members is to stay on the good side of their party’s base voters.
0:02:33 And if they win their primary, they cruise, but all of their attention and energy is on
0:02:34 making sure they win the primary.
0:02:38 Is it fair to overall call that setup a duopoly?
0:02:43 Oh yeah, of course it’s fair to call it a duopoly, where the two parties have carved
0:02:48 up the country into blue zones and red zones, and it’s very hard for certainly anyone else
0:02:52 to run and win in the vast majority of locations.
0:02:55 And what other duopolies does our political duopoly remind you of?
0:02:59 You know, the first thing that popped into my mind for me was something like Microsoft
0:03:00 and Apple.
0:03:03 I don’t know if there are others that pop into people’s minds.
0:03:05 Pepsi and Coke, maybe?
0:03:06 Pepsi and Coke, sure.
0:03:07 Boeing and Airbus?
0:03:08 Yeah, definitely.
0:03:09 Visa MasterCard?
0:03:12 The Discover fans would agree.
0:03:20 OK, the episode you are about to hear is called America’s Hidden Duopoly, first published,
0:03:22 as I mentioned, several years ago.
0:03:27 We’ve updated facts and figures as necessary, but things being what they are, there wasn’t
0:03:29 all that much updating needed.
0:03:33 What is new is a conversation later on with Andrew Yang about what could and should be
0:03:34 done.
0:03:39 I think this is one of the most important episodes we’ve ever made, and that is reflected
0:03:42 in the amount of correspondence we still get about this topic.
0:03:46 And that’s why we thought this episode was due for an update.
0:03:52 As always, thanks for listening.
0:03:57 Imagine a gigantic industry that’s being dominated by just one or two companies.
0:03:59 Actually, you don’t have to imagine.
0:04:04 Google has more than 90% of the global search engine market.
0:04:08 So not quite a monopoly, but pretty close.
0:04:14 Such cases are rare, but not so rare is the duopoly when two firms dominate an industry
0:04:21 like Intel and AMD and computer processors, Boeing and Airbus and jet airliners, the Sharks
0:04:25 and the Jets and the fictional gangs from the 50s industry.
0:04:34 But surely the most famous duopoly is this one.
0:04:45 The rivalry between Coca-Cola and Pepsi-Cola goes back to the 19th century.
0:04:50 Coke was long dominant, but in the 1970s and 80s, Pepsi gained ground and marketed hard
0:05:05 to younger consumers.
0:05:11 Coke’s internal research found that most people, even Coke employees, preferred Pepsi.
0:05:17 In 1985, they abandoned their classic recipe in favor of New Coke, which tasted more like
0:05:18 Pepsi.
0:05:19 This did not work out so well.
0:05:22 I’m Don Keough, president of the Coca-Cola Company.
0:05:26 When we brought you the new taste of Coke, we knew that millions would prefer it and
0:05:27 millions do.
0:05:31 What we didn’t know was how many thousands of you would phone and write asking us to
0:05:35 bring back the classic taste of original Coca-Cola.
0:05:38 Coke eventually got rid of New Coke altogether.
0:05:43 And despite the flip-flop, or maybe because of it, and the attendant-free media, in any
0:05:46 case, Coke regained the top spot.
0:05:52 Today, even as soda consumption falls, the rivalry rages on, with both companies adding
0:05:56 juices, teas, and waters to their portfolios.
0:06:01 You can afford to make those big acquisitions when you’ve got a ton of cash on hand, when
0:06:05 you’re one of just two companies sharing a huge market.
0:06:11 And there’s another advantage to being half of a duopoly, self-perpetuation.
0:06:16 This was covered pretty extensively in the media during the so-called cola wars.
0:06:19 The quote “war” is good for both of them.
0:06:26 I believe the Coke and Pepsi together, this cola war they’ve been in for decades now,
0:06:30 actually helped each other sell an awful lot of product.
0:06:35 There are plenty of reasons why duopolies exist, and they’re not necessarily all sinister.
0:06:41 In capitalism, scale is really important for all sorts of advantages to being big, which
0:06:47 leads big companies to get even bigger, gobbling up smaller companies and essentially dictating
0:06:50 the rules of their market.
0:06:53 Not everyone likes this trend.
0:06:58 In many quarters, there’s a strong appetite for a smaller scale, for mom-and-pop and Indian
0:06:59 artisanal.
0:07:06 But, let’s be honest, that smaller scale idea is cute, but it’s not winning.
0:07:09 What’s winning is dominance.
0:07:12 Other industries dominated by just a couple behemoths.
0:07:18 We’ve already given you a few examples from a variety of industries, but there’s another
0:07:24 duopoly, a mighty one, that you probably don’t even think about as an industry.
0:07:25 Which duopoly am I talking about?
0:07:27 I’ll give you some clues.
0:07:30 Let’s go back over what we just discussed about duopolies.
0:07:35 They’re big institutions that take advantage of their size to get even bigger.
0:07:39 I’m talking to consultants on both sides, many of whom have been doing this for a long
0:07:43 time, and they’ve never seen this amount of money.
0:07:49 As we said, not everyone likes this trend, but the opposition is not winning.
0:07:54 I’d like to see more competition, you know, competition makes a better product.
0:07:58 And this leaves an entire industry run by just two behemoths.
0:08:06 Ladies and gentlemen, my mother, my hero, and our next president.
0:08:13 And I could not be more proud tonight to present to you and to all of America my father and
0:08:21 our next president, Hillary Clinton, Donald J Trump.
0:08:26 Does it surprise you to hear our political system characterized as an industry?
0:08:28 It surprised this guy.
0:08:29 Absolutely never thought of it in those terms.
0:08:33 And that’s Michael Porter, the world famous business strategist.
0:08:36 And at the core of it is what we call the duopoly.
0:08:40 Comparing our political system to something like Coke and Pepsi, I can’t be right, can
0:08:41 it?
0:08:43 No, Porter says.
0:08:44 It’s worse than that.
0:08:49 Coke and Pepsi don’t control their market nearly as fully as the Republicans and Democrats
0:08:50 do.
0:08:53 Even in soft drinks, we have a lot of new competitors.
0:08:57 Even though Coke and Pepsi are so big, they don’t truly dominate.
0:09:02 Indeed, Coke and Pepsi only control about 70 percent of the soft drink market.
0:09:08 At least they’ve got the Dr. Pepper Snapple Alliance to worry about, whereas Republicans
0:09:14 and Democrats, you can take all the libertarians and independence, the Green Party, working
0:09:20 families party, the American Delta Party, the United States Pirate Party, which is a
0:09:21 real thing.
0:09:26 You add them all together and they’re not even close to Dr. Pepper.
0:09:31 And yet from both Republicans and Democrats in Washington, we’ve been hearing the same
0:09:33 complaint for decades now.
0:09:36 Washington is totally broken.
0:09:38 Washington is broken.
0:09:40 This system is broken.
0:09:41 It’s not working.
0:09:42 Washington is not working.
0:09:46 Mr. Speaker, Washington is broken.
0:09:50 But what if the Washington is broken idea is just a line?
0:09:53 I like to teach the world to sing.
0:09:57 Maybe it’s even a slogan, but the industry approves.
0:10:04 Yeah, what if they’re just selling and we’re buying?
0:10:05 What if it’s not broken at all?
0:10:10 The core idea here is that Washington isn’t broken.
0:10:17 In fact, it turns out that Washington is doing exactly what it’s designed to do today on
0:10:19 Freakonomics Radio.
0:10:22 Is Washington really an industry just like any other?
0:10:23 How to get that way?
0:10:25 And what’s it mean?
0:10:44 And when the duopoly wins, does that mean the rest of us lose?
0:10:50 This is Freakonomics Radio, the podcast that explores the hidden side of everything with
0:11:01 your host, Stephen Dubner.
0:11:07 Once upon a time, there was a dairy products company in Wisconsin called Gale Foods, G-E-H-L.
0:11:09 My name is Katherine Gale.
0:11:11 Katherine Gale was the CEO of the company.
0:11:15 It had been founded well over a century earlier by her great-grandfather.
0:11:21 For years, Gale Foods sold the standard dairy items, butter, milk, ice cream.
0:11:25 In the 1960s, they got into pudding and cheese sauces.
0:11:31 And more recently, Gale Foods kept keeping up with the times, high-tech food manufacturing,
0:11:37 meaning low-acid, aseptic processing and packaging using robots, which creates shelf-stable foods
0:11:40 without the use of preservatives.
0:11:45 The process is also useful for products like weight loss shakes and iced coffee drinks.
0:11:50 After Katherine Gale, Gale Foods had more than 300 employees and was doing nearly $250 million
0:11:55 a year in sales, but there were a lot of challenges.
0:11:56 Why?
0:12:00 Because the food industry is incredibly competitive.
0:12:06 There are new competitors all the time, also new technologies, new consumer preferences.
0:12:11 So to plot a path forward, Gale turned to one of the most acclaimed consultants in the
0:12:12 world.
0:12:13 I’m Michael Porter.
0:12:18 I’m a professor at Harvard Business School, and I work most of the time on strategy and
0:12:20 competitiveness.
0:12:22 Porter is now in his late 70s.
0:12:26 As an undergraduate, he studied aerospace and mechanical engineering.
0:12:30 Then he got an MBA and a PhD in business economics.
0:12:36 So he understands systems as well as how things are made within those systems.
0:12:41 He’s written landmark books called Competitive Strategy and On Competition.
0:12:45 He is cited more than any other scholar in the field.
0:12:50 He’s best known for creating a popular framework for analyzing the competitiveness of different
0:12:51 industries.
0:12:55 The framework that I introduced many years ago says that there’s these five forces.
0:12:59 These five forces help determine just how competitive a given industry is.
0:13:07 The five forces are the threat of new entrants, the threat of substitute products or services,
0:13:13 the bargaining power of suppliers, the bargaining power of buyers, and rivalry among existing
0:13:15 competitors.
0:13:20 We’re not there yet, but if you want to jump ahead and consider how these forces apply
0:13:24 to our political system, I’m going to say them again, the threat of new entrants, the
0:13:29 threat of substitute products or services, the bargaining power of suppliers, bargaining
0:13:33 power of buyers, and rivalry among existing competitors.
0:13:39 Anyway, you can see why someone like Catherine Gale, the CEO of a century old food company,
0:13:44 might want to bring in someone like Michael Porter to figure out what to do next.
0:13:47 It was a classic business strategy exercise.
0:13:53 Now Gale, in addition to her family business, had another abiding interest, politics.
0:14:00 Yes, I’ve certainly moved around in the partisan classification.
0:14:03 During high school, she was a Republican.
0:14:04 Over time, she drifted left.
0:14:11 My daughter actually, when she was six, came to me and said, “Mommy, I think I’m a Republican
0:14:16 or maybe a Remicrat, and I think that gives a good sense of where things are at in our
0:14:17 household.”
0:14:23 In 2007, Gale joined the National Finance Committee of Barack Obama’s presidential campaign.
0:14:26 She became one of his top fundraisers.
0:14:30 A couple of years after Obama was elected, Gale joined the board of a government organization
0:14:37 called the Overseas Private Investment Corporation, which helps U.S. firms do business in emerging
0:14:38 markets.
0:14:43 I was paying a lot of attention to what was happening in Washington, D.C.
0:14:48 Gale did not like what she saw in Washington, D.C. She didn’t like it one bit.
0:14:55 It became really clear to me that this fight was not about solving problems for American
0:14:56 people.
0:15:00 This fight was about one party beating the other party and that the parties were more
0:15:06 committed to that than to actually solving problems or creating opportunities.
0:15:14 Eventually, I understood that it didn’t matter who we elected, it didn’t matter the quality
0:15:16 of the candidates.
0:15:22 Once it became clear to me that it was a systems problem, I switched from investing my time
0:15:29 in searching for the next great candidate and turned an eye to the fundamental root-cause
0:15:36 structures in the political system that pretty much guarantee that as voters, we are perpetually
0:15:37 dissatisfied.
0:15:42 So, she started raising money for nonpartisan organizations working toward political reform.
0:15:49 And one of the things that became clear is that there was no thesis for investment in
0:15:51 political reform and innovation.
0:15:55 In other words, people didn’t want to give money to nonpartisan organizations working
0:15:57 toward political reform.
0:16:01 They only wanted to give money to political parties and their candidates.
0:16:05 In fact, Catherine Gale found that potential donors had a hard time believing that such
0:16:09 a thing as nonpartisan political reform even existed.
0:16:14 That’s how conditioned they were to seeing the political system through a two-party lens.
0:16:19 It was around this time that Catherine Gale began meeting with Michael Porter.
0:16:23 She had brought him in to Gale Foods to help figure out the company’s strategy going forward,
0:16:28 keeping in mind his five famous forces about industry competitiveness.
0:16:34 New rivals, existing rivalries, substitute products, supplier power, and customer power.
0:16:42 I would consistently make the case to Michael that, wow, how we’re analyzing this industry
0:16:47 of low-acid aseptic food production, which is the business I was in, all of these tools
0:16:51 are directly applicable to analyzing the business of politics.
0:16:56 Frankly, I knew almost nothing about politics, but the more I heard and the more we talked,
0:17:00 the more it became clear that we really needed to take a fresh look here.
0:17:08 So it was out of that crucible of analyzing a traditional business strategy and at the
0:17:13 same time devoting so much time to political reform and innovation that it became clear
0:17:19 that politics was an industry, the industry was thriving, and that all of the tools of
0:17:22 conventional business analysis were applicable here.
0:17:28 And that’s where looking at this as an industry starts to provide some power.
0:17:29 Okay.
0:17:35 So you came to the conclusion that politics is an industry much like many of the other
0:17:39 industries that you’ve been studying over your career.
0:17:42 You never really thought of it in those terms before?
0:17:44 Really never thought of it in those terms.
0:17:50 We always thought of politics as a public institution, that the rules were somehow codified
0:17:53 in the rule of law and in our constitution.
0:17:59 But what we came to see is that politics is really about competition between largely
0:18:02 private actors.
0:18:05 And at the core of it is what we call the duopoly.
0:18:08 The duopoly, Republicans and Democrats.
0:18:18 And that competition has been structured around a set of practices and rules and in some cases
0:18:25 policies that have been created over time, largely by the actors themselves.
0:18:32 Actually the founders left a lot of room in terms of how the actual plumbing would work,
0:18:40 but it was interesting multiple of our founders actually expressed a deep fear that parties
0:18:41 would take over.
0:18:46 John Adams said at one point, “There is nothing which I dread so much as a division of the
0:18:49 Republic into two great parties.
0:18:53 Each arranged under its leader in concerting measures in opposition to each other.”
0:18:59 And if you take a look at Washington’s farewell address, which he wrote in 1796, he talks
0:19:06 about dangers which could come in front of the Republic in the future and he specifically
0:19:07 focuses on two.
0:19:12 One is foreign influence and the other is partisanship.
0:19:18 The other danger is the formation of strong parties.
0:19:22 Having come to the conclusion that the political system operated more like a traditional industry
0:19:28 than a public institution, Catherine Gale and Michael Porter set down their ideas in
0:19:29 a Harvard Business School report.
0:19:36 It’s called “Why Competition in the Politics Industry is Failing America.”
0:19:41 When you read the paper, right there under key findings is this sentence in bright red
0:19:42 print.
0:19:46 “The political system isn’t broken, it’s doing what it is designed to do.”
0:19:54 In other words, it was no coincidence that politics had become self-sustaining, self-dealing
0:19:56 and self-centered.
0:20:01 They were the blue team and the red team, kind of like Pepsi and Coke.
0:20:06 Essentially, they divided up an entire industry into two sides.
0:20:13 We ended up seeing that it wasn’t just the parties competing, it’s that they had created
0:20:19 influence and in a sense captured the other actors in the industry.
0:20:27 You have media and political consultants and lobbyists and candidates and policies all
0:20:32 divided onto one of two sides.
0:20:35 What you see is the system has been optimized over time.
0:20:41 For the benefit of private, gain-seeking organizations are two political parties and
0:20:46 they’re industry allies, what we together call the political industrial complex.
0:20:52 This industry has made it very, very hard to play at all if you’re not playing their
0:20:53 game.
0:21:00 How does the political industry compare in size and scope, dollars, employees, direct
0:21:06 and indirect, penetration and influence to other industries that you’ve studied, pharmaceutical
0:21:08 industry, auto industry and so on?
0:21:13 It’s a great question and we have done enormous amounts of work on it.
0:21:19 It turns out to be very difficult to get what I would call a completely comprehensive answer.
0:21:26 We estimate that in the most recent two-year election cycle, the industry’s total revenue
0:21:29 was approximately $16 billion.
0:21:37 This is not the biggest industry in the economy, but it’s substantial.
0:21:42 It would be one thing if this large industry were delivering value to its customers who
0:21:45 are supposed to be us, the citizenry.
0:21:49 But Gail and Porter argue that the political industry is much better at generating revenue
0:21:56 for itself and creating jobs for itself while treating its customers with something closer
0:22:01 to disdain, think about cable TV on steroids.
0:22:04 And the numbers back up their argument.
0:22:10 Customer satisfaction with the political industry is at historic lows, just 16% of Americans
0:22:14 currently say they trust the federal government.
0:22:20 In terms of popularity, it ranks below every private industry that includes the healthcare
0:22:25 and pharmaceutical industries, the airline industry and yes, cable TV.
0:22:31 Generally, in industries where customers are not happy and yet the players in the industry
0:22:34 are doing well, you’ll see a new entrant.
0:22:40 You’ll see a new company come into business to serve those customers.
0:22:47 A new company like Netflix or Hulu or Amazon Prime or Sling TV or, well, you get the point.
0:22:53 So in today’s world, we have the majority of voters say in polls that they would rather
0:22:55 have an independent.
0:23:00 So in a normal industry, you’d have a whole new competitor coming up that was about independence
0:23:02 to serve that unmet need.
0:23:06 And yet in politics, we don’t see any new entrants.
0:23:07 So why is that?
0:23:14 Well, it turns out that our political parties work well together in one particular area.
0:23:22 And that is actually colluding together over time behind the scenes to create rules and
0:23:30 practices that essentially erect barriers to entry, ways to keep out new competition.
0:23:37 In their report, Gail and Porter identify the five key inputs to modern political competition.
0:23:44 Banks, campaign talent, voter data, idea suppliers and lobbyists.
0:23:49 Here’s what they write, “Increasingly, most everything required to run a modern campaign
0:23:55 and govern is tied to or heavily influenced by one party or the other, including think
0:23:59 tanks, voter data, and talent.”
0:24:06 What’s happened is the parties have now divided up the key inputs to political competition.
0:24:12 And if you’re not a Republican or a Democrat, then you’re in trouble in even finding a campaign
0:24:17 manager, much less getting the best up-to-date voter data and the best analytics and so forth.
0:24:21 It’s not enough to monopolize the campaign machinery.
0:24:25 Gail and Porter argue that the political industry has essentially co-opted the media, which
0:24:29 spreads their messages for free.
0:24:31 This helps Donald Trump tonight.
0:24:38 This is a big, big beginning to the end of what has been a witch on.
0:24:42 Trump Watch, now man in the White House is behaving now like a character on that old
0:24:45 detective show, Colombo.
0:24:51 Perhaps most important, the two parties rig the election system against would-be disruptors.
0:24:58 The rules they set allow for partisan primaries, gerrymandered congressional districts, and
0:25:00 winner-take-all elections.
0:25:05 Each side of the duopoly, Republicans and Democrats and the players that are playing
0:25:15 for those teams, have, over time, worked to improve their own side’s fortunes.
0:25:24 But collectively, they also have come together to improve the ability of the industry as
0:25:32 a whole to protect itself from new competition, from third parties that could threaten either
0:25:35 of the two sides of the duopoly.
0:25:38 What the parties have done is they’ve been very, very clever.
0:25:43 They don’t compete head-to-head for the same voters.
0:25:46 They’re not competing for the middle.
0:25:56 It’s likely that we have a much more powerful center, a much more powerful group of moderates
0:26:00 than our current duopoly demonstrates.
0:26:06 What they’ve understood is competing for the middle is a sort of destructive competition.
0:26:08 It’s kind of a zero-sum competition.
0:26:14 So the parties have divided the voters and kind of sort of ignored the ones in the middle
0:26:16 because they don’t have to worry about them.
0:26:22 Because if the middle voter is unhappy, which most middle voters are today in America, what
0:26:23 can they do?
0:26:31 The only thing either party has to do to thrive, to win the next election, is to convince the
0:26:39 public that they are just this much less hated than the one other choice that the voter has.
0:26:45 That gives those two companies, the Democrats and the Republicans, the incentive to prioritize
0:26:48 other customers.
0:26:55 Their target customer on each side is the special interest and the partisans.
0:27:00 They get a lot of resources and a lot of campaign contributions and massive amounts of lobbying
0:27:07 money to try to get their support with whatever those partisan or special interest needs are.
0:27:16 There is now an entire industry of politics that moves forward independent of whether
0:27:20 that industry actually solves problems for the American people.
0:27:25 What’s happened is that the barriers to getting into this industry and providing a different
0:27:34 type of competition have been built to enormous heights, which has allowed the parties to
0:27:41 structure the nature of the rivalry among themselves in a way that really maximizes
0:27:50 their benefit to them as institutions, but doesn’t actually serve the public interest.
0:27:54 Well, that’s depressing, isn’t it?
0:27:58 Insightful, perhaps, but depressing nonetheless.
0:28:02 So do Catherine Gale and Michael Porter have any bright ideas for tackling this problem?
0:28:03 Yes.
0:28:04 Yeah.
0:28:05 Oh, yeah.
0:28:06 Oh, my God.
0:28:19 That’s coming up right after this.
0:28:24 The business strategist Michael Porter and the CEO turned political reformist Catherine
0:28:29 Gale argue in a Harvard Business School report that our political system has been turned
0:28:32 into an industry with no real competition.
0:28:39 The industry’s primary beneficiaries are itself and its many ancillary participants,
0:28:43 including the media, but the vast majority of Americans who are somewhere in the middle
0:28:45 are feeling very, very disaffected.
0:28:50 The lack of vigorous competition, they argue, has allowed the Democrats and Republicans
0:28:56 to carve out diametrically opposed political bases, fairly narrow and extremely partisan.
0:29:03 Years ago, we created partisan primaries in order to take the selection of a candidate
0:29:08 out of this quote-unquote smoke-filled back room and give the selection of the party candidate
0:29:10 choice to citizens.
0:29:13 So that was designed to give more control to citizens.
0:29:19 It turns out it has had a very deleterious effect on competition and has increased the
0:29:21 power of the parties.
0:29:26 And the parties, Gale and Porter argue, use those partisan bases to support the desires
0:29:32 of the political industry’s true customers and its wealthiest, special interests, industries
0:29:38 like healthcare, real estate and financial services, also labor unions and lobbyists.
0:29:45 In this duopolistic business model, polarization is a feature, not a bug.
0:29:50 We have a chart in our report that just selects what we call landmark type legislation over
0:29:53 the last 50, 60 years.
0:29:59 And if you go back even 20 or 30 years ago, the landmark legislation was consensus.
0:30:08 For instance, the Social Security Act of 1935 had 90% Democratic support and 75% Republican.
0:30:16 The Civil Rights Act of 1964 had 60% Democratic support and, again, 75% Republican.
0:30:21 Now for the last decade or two, that’s been the opposite pattern.
0:30:26 The only way landmark legislation gets passed is one party has enough votes to pass that
0:30:27 by itself.
0:30:33 The Affordable Care Act, also known as Obamacare, was passed in 2010 with zero Republican votes
0:30:35 in Congress.
0:30:42 President Trump’s 2018 tax reform bill, zero Democratic votes.
0:30:48 So your diagnosis suggests that this industry serves itself incredibly well.
0:30:55 It suggests that it serves us, the citizenry, really poorly, and also suggests that more
0:31:00 competition would improve the industry as it does in just about every industry.
0:31:06 But just having more competition in parties doesn’t seem to be the answer alone.
0:31:09 I mean, there are plenty of multi-party political systems around the world that have similar
0:31:14 cases of dysfunction and corruption and cronyism like ours.
0:31:20 So how direct a step or direct a prescription would that be?
0:31:26 I think in our system in particular, where we have only two and they have been able to
0:31:33 actually set up the rules of competition that reinforce their partisan competition, dividing
0:31:39 voters and so forth, more competition I think would be incredibly valuable.
0:31:41 But it has to be a different kind of competition.
0:31:47 It can’t be just another party that’s going to split our electorate into three partisan
0:31:48 groups.
0:31:56 And so in our work, we focus on what would it take to make the competition less about
0:32:02 dividing the voters and how could we make the competition more around building up more
0:32:06 choices for voters that were more about solutions.
0:32:10 By the way, let me be clear, we’re not against parties per se.
0:32:18 What we are against is the nature of the competition that our existing dominant parties have created.
0:32:23 When you suggest that these rules were carefully constructed, I guess if I were thinking about
0:32:29 something other than politics, the first thought that would come to mind then is, well, collusion,
0:32:30 right?
0:32:36 If I can be one member of a duopoly, I actually hate my rival much less than I hate the idea
0:32:41 of anybody else who would interrupt that rivalry because we’re splitting the spoils now.
0:32:46 Do you have any evidence of collusion between the parties to create a system that essentially
0:32:47 keeps the rest out?
0:32:49 First of all, that is the right word.
0:32:51 It is collusion.
0:32:55 There’s probably a legal definition of collusion, which I don’t know, I’m not a lawyer, but
0:32:57 the effect is exactly the same.
0:33:05 The parties have agreed on a set of rules that benefit the duopoly and preserve this nature
0:33:07 of competition.
0:33:10 You can really put rules into a number of buckets.
0:33:14 There’s legislative machinery, as we call it, which is how the Senate and the Congress
0:33:20 are run, and then there’s the election rules having to do with what is the primary process
0:33:26 like and what does it take to get on the ballot as an independent and the various campaign
0:33:29 finance stuff that surrounds elections.
0:33:35 Has anyone ever considered filing whether an earnest or not an antitrust suit against
0:33:36 Republicans and Democrats?
0:33:43 Stephen, that’s a great question.
0:33:45 I have.
0:33:52 We’ve actually had a significant effort to see if that’s feasible, what the law is, looking
0:33:57 at the antitrust statutes, but this is absolutely what antitrust policy is all about.
0:34:03 It’s creating open, effective competition that serves the customer and the public interest.
0:34:06 This industry cries out for that.
0:34:10 In the report, you discuss the many advantages the two parties have.
0:34:15 I think we all recognize that there’s real power in size and there’s leverage, especially
0:34:18 when you’re making your own rules for your own industry.
0:34:23 You write that they use those advantages to retain control and to constrict competition,
0:34:24 so on.
0:34:31 That’s me, that Donald Trump really got around a lot of those advantages.
0:34:36 You write that the parties, quote, control the inputs to modern campaigning governing,
0:34:39 but he didn’t rely on that, really.
0:34:44 You wrote that the parties co-opt channels for reaching voters, but he kind of co-opted
0:34:49 or maybe took advantage of his own channels, including free media and his own social media
0:34:50 accounts.
0:34:55 You write that the parties, quote, erect high and rising barriers to new competition, but
0:35:00 in the case of Trump, you know, his own party tried as hard as they could to erect the highest
0:35:02 barrier and couldn’t keep them out.
0:35:09 And so on those fronts, it would strike me that the parties failed, failed to constrict
0:35:11 a certain competitor.
0:35:17 So I don’t know how you personally feel about President Trump, but according to those advantages
0:35:23 and his end run around them, it would sound as though he is at least one example of the
0:35:25 solution to the problems that you’re describing.
0:35:31 Well, yeah, I think that is definitely a good question, and we must take that on.
0:35:34 I would say a couple of things.
0:35:41 First of all, the best choice that President Trump made was to run in a party.
0:35:46 He had to pick one side of the duopoly because he knew he couldn’t win as an independent.
0:35:53 He had actually explored running as an independent in previous years, but that in the current
0:35:57 system is not seen to be a winning strategy.
0:36:02 The other thing I would say about him was that he had resources.
0:36:08 In the end, he didn’t have to use that many of them, but he could almost have self-financed
0:36:15 and he was appealing to a certain subset of the partisans, maybe a somewhat neglected
0:36:18 subset of the people on the right.
0:36:26 And he had a very strong existing brand identity, so he was able to get a lot of recognition
0:36:30 and coverage without having to spend that much on advertising.
0:36:38 He represents a personality-driven campaign within a party, but we don’t believe that
0:36:45 he represents fundamentally transforming the structure of competition in the industry.
0:36:51 So far, Trump is just the third in a row president that may have said that he was going to do
0:36:55 things differently and cut across lines and all that kind of stuff.
0:37:00 But frankly, he didn’t, Obama didn’t, and President Bush didn’t.
0:37:05 Even though President Obama and President Bush campaigned on bipartisanship and bringing
0:37:07 people together, they failed.
0:37:11 So I think that those recent case studies are sobering.
0:37:17 Okay, remember, this conversation was from 2018 just to put this in context.
0:37:23 But back to the core issue, some political scientists argue that Gale and Porter’s analysis
0:37:26 of party power has it backwards.
0:37:30 These scholars say our political system is in bad shape because the parties have gotten
0:37:32 weaker over time.
0:37:37 They argue that stronger parties could help beat back special interests and produce more
0:37:39 compromise and moderation.
0:37:44 You want some interesting evidence for this party’s are weak argument?
0:37:47 Think back to the 2016 presidential election.
0:37:52 You had one national party, the Democrats, that tried as hard as it could, to the point
0:37:59 of cheating, essentially, to pre-select its candidate, Hillary Clinton, who then lost.
0:38:04 And you had the other national party, the Republicans, try as hard as it could to keep
0:38:10 a certain candidate off the ballot, but they failed and he won.
0:38:16 It’s true that the parties are not as strong as they were in the past.
0:38:21 But both sides of the political industrial complex, Democrats and Republicans, are as
0:38:22 strong as ever.
0:38:26 It’s just that the power may not all reside within the party.
0:38:30 If parties were stronger, that doesn’t mean they’d be moderating forces.
0:38:31 That’s what some people say.
0:38:33 I really don’t understand that argument.
0:38:36 The stronger they are, the less moderating they’re going to be, given the nature of
0:38:39 the competition that’s been created.
0:38:45 I think we are really asking for too little when we say let’s tinker around the edges
0:38:51 and get stronger parties so that we can have a little bit of a cleaner process.
0:38:57 What we believe is we need to create structural reforms that would actually better align the
0:39:05 election process and the legislative process with the needs of the average citizen.
0:39:06 All right.
0:39:11 So you’ve diagnosed the problem in a really interesting and profound way by overlaying
0:39:17 a template that’s more commonly applied to firms to the political industry.
0:39:20 And of course, it theoretically leads to a different set of solutions than we’ve typically
0:39:21 been hearing.
0:39:24 So then you discuss four major solutions.
0:39:26 Let’s go through them point by point.
0:39:30 Number one, you talk about restructuring the election process itself.
0:39:34 Give me some really concrete examples of what that would look like.
0:39:38 I’d also love to hear whether you do see some evidence of these examples happening because
0:39:43 it does seem there has been some election reform in states and regions around the country.
0:39:44 Yes.
0:39:47 Well, when we think about reform, we have to think about really two questions.
0:39:49 Number one, is a reform powerful?
0:39:52 Will it actually change the competition?
0:39:56 So a lot of what people are proposing now is actually not going to make much difference.
0:39:59 So term limits are a great example.
0:40:05 We aren’t fans of term limits because we think that without changing the root cause incentives,
0:40:10 you’ll actually just have different faces playing the same game.
0:40:15 So number one is we have to re-engineer the election processes, the election machinery.
0:40:18 And there are three electoral reforms that are important.
0:40:20 We call it the election trifecta.
0:40:27 The first and probably the single most powerful is to move to nonpartisan single ballot primaries.
0:40:31 Currently, if you’re going to vote in the primary, you show up and you get a Democratic
0:40:37 ballot or a Republican ballot, and then you vote for who’s going to represent that party
0:40:40 in the general election.
0:40:43 And the one that’s on the farthest left or the one that’s on the farthest right has
0:40:50 a tendency to win because the people that turn out for primaries are a relatively small
0:40:53 fraction of even the party.
0:40:58 And those are the people that show up because they’re really partisans and they really have
0:41:02 special interests and they really, really care about getting somebody on the ballot
0:41:04 that’s for them.
0:41:11 In a single ballot, nonpartisan primary, all the candidates for any office, no matter
0:41:15 what party they’re in, are on the same ballot.
0:41:22 And we propose that the top four vote getters advance out of that primary to the general
0:41:23 election.
0:41:29 And the reason a single primary where everybody’s in it is so important is that if you want
0:41:34 to win, you want to appeal to as many voters as you can.
0:41:38 And therefore, you’re going to get people that are not just trying to appeal to their
0:41:39 particular extreme.
0:41:46 The second part of the Gale Porter election reform trifecta, ranked choice voting.
0:41:47 Here’s how ranked choice voting works.
0:41:52 You’ll now have four candidates that made it out of the top four primary.
0:41:56 Those four candidates will all be listed on the general election ballot.
0:42:02 And you come and vote for them in order of preference.
0:42:03 So it’s easy.
0:42:05 This is my first choice.
0:42:06 This candidate’s my second choice.
0:42:08 It’s my third choice.
0:42:09 This is my fourth choice.
0:42:17 When the votes are tabulated, if no candidate has received over 50 percent, then whoever
0:42:23 came in last has dropped and votes for that candidate are then reallocated to those voters’
0:42:33 second choice and the count is run again until one candidate reaches over 50 percent.
0:42:40 What that does is it gives a candidate a need to appeal to a broader group of voters.
0:42:46 And very importantly, it eliminates one of the hugest barriers to competition in the
0:42:51 existing system, and that is the spoiler argument.
0:42:59 So what happens currently is that if there’s, let’s say, an attractive third party candidate
0:43:04 or an independent candidate, both Democrats and Republicans will make the argument that
0:43:11 nobody should vote for them because they will simply draw votes away from a Democrat or
0:43:18 draw votes away from a Republican and therefore spoil the election for one of the duopoly
0:43:19 candidates.
0:43:24 Once you have ranked choice voting, everybody can pick whoever they want as their first
0:43:26 choice, second choice, third choice.
0:43:34 No vote is wasted and no vote spoils the election for another candidate.
0:43:38 And then the last part of the trifecta is nonpartisan redistricting.
0:43:40 Gerrymandering has to go.
0:43:45 When parties control drawing the districts, they can draw districts that will be more
0:43:52 likely to tilt in favor of their party, and they can end up having a disproportionate
0:44:00 number of “safe” Republican seats or “safe” Democratic seats by the way that they draw
0:44:05 the districts, and we want to make that go away.
0:44:10 In addition to election rule reforms, Porter and Gale would like to see changes to the
0:44:12 rules around governing.
0:44:19 Congress makes its own rules for how it functions, and over time, these rules, customs and practices
0:44:28 have been set in place to give an enormous amount of power to the party that controls
0:44:29 the chamber.
0:44:33 And this is sort of collusion in a way, is when the other party takes over, they do it
0:44:34 the same way.
0:44:43 So we propose moving away from partisan control of the day-to-day legislating in Congress
0:44:47 and also in state legislatures as well.
0:44:52 The third leg of their reform agenda is about money in politics, but their analysis led
0:44:56 them to a different conclusion than many reformers.
0:45:04 Where we differ with so many people championing these reforms is that we don’t believe that
0:45:07 money in politics is the core issue.
0:45:13 The problem is really this nature of competition that leads to this partisanship, and that’s
0:45:17 not a money issue per se, that’s a structural issue.
0:45:22 If you take money out of politics without changing the rules of the game, you’ll simply
0:45:27 make it cheaper for those using the existing system to get the self-interested results
0:45:33 that they want without changing the incentives to actually deliver solutions for the American
0:45:34 people.
0:45:42 Having said that, we do believe that there are benefits to increasing the power of smaller
0:45:50 donors, and so the reforms that we have suggested are primarily focused on increasing the power
0:45:53 of smaller donors.
0:45:58 For instance, having the government itself match donations from small donors.
0:46:03 We should note that most of the ideas Gail and Porter are presenting here are not all
0:46:07 that novel if you follow election reform even a little bit.
0:46:14 Even we poked into a lot of them, an episode called “Ten Ideas to Make Politics Less Rotten.”
0:46:20 I guess it’s one measure of how successful and dominant the political duopoly is that
0:46:26 plenty of seemingly sensible people have plenty of seemingly sensible reform ideas that for
0:46:28 the most part gain very little traction.
0:46:31 It is definitely challenging.
0:46:32 This is a ground game.
0:46:37 We’re not going to be able to do this in a year or one election cycle because the resources
0:46:43 that the current duopoly have to deploy to play their game are substantial.
0:46:48 Despite the rather depressing or at least sobering picture that you paint of the political
0:46:53 industry, throughout the report, you express quite a bit of optimism.
0:47:02 I want to know why or how because I don’t see the avenue, I guess, for optimism.
0:47:07 Well, I do think we have a basic optimism.
0:47:14 We have no sense that it will be easy to change the rules of this game for a whole variety
0:47:15 of reasons.
0:47:18 But the good news is we’ve had some progress.
0:47:21 We’ve got some nonpartisan primary states now, including California.
0:47:23 We’ve got ranked choice voting in Maine.
0:47:31 What seems to be building in America is a growing appetite and a growing recognition that this
0:47:33 isn’t working for our country.
0:47:40 I think the younger generation are particularly outraged and concerned and open to all kinds
0:48:06 of new ideas, but I think it’s going to take time.
0:48:15 Coming up after the break, Andrew Yang’s 2024 take on the duopoly and some signs of change.
0:48:16 I’m Stephen Dubner.
0:48:17 This is Freakonomics Radio.
0:48:32 We’ll be right back.
0:48:36 Since we published the original episode you just heard, America’s Hidden Duopoly, one
0:48:41 of the prominent reforms embraced by Michael Porter and Catherine Gale has been spreading
0:48:42 at least a bit.
0:48:47 Alaska and Maine have used ranked choice voting in statewide elections.
0:48:52 It has also been introduced in local elections, including the 2021 race in New York City to
0:48:54 pick a new mayor.
0:48:59 One of the candidates, Andrew Yang, was one of the most enthusiastic supporters of ranked
0:49:02 choice voting, but it didn’t seem to help him.
0:49:06 In a competitive Democratic primary, he came in fourth.
0:49:10 That was despite big name recognition from his presidential run.
0:49:16 So there would seem to be something about Andrew Yang, the candidate that voters don’t
0:49:17 love.
0:49:23 But that’s fair, because there’s a lot about the voting system that Andrew Yang doesn’t
0:49:24 love.
0:49:27 So, what’s he been up to lately?
0:49:32 I’m co-chair of the Forward Party, the third biggest political party in the country by resources,
0:49:35 though there’s a very steep drop off between number two and number three.
0:49:39 What is the drop off between number two and number three in whatever metric you’d like
0:49:41 to measure, whether it’s people, dollars, et cetera?
0:49:48 Using dollars, I’d say there’s probably something like a 98.5% drop off.
0:49:50 So what is the Forward Party?
0:49:55 What are you trying to accomplish, especially in this current election cycle?
0:50:01 The Forward Party is a movement of independent-minded Americans who are trying to reform our political
0:50:06 system, so it actually responds to us and the challenges of this era.
0:50:12 And we do that by pushing ballot reforms and backing positive candidates with any letter
0:50:13 next to their name.
0:50:17 So it could be a Democrat, it could be an independent, it could be a Republican.
0:50:20 Is the Forward Party endorsing or backing any Republicans yet?
0:50:25 We just recently announced the endorsement of a guy named John Curtis, who is running
0:50:29 for Mitt Romney’s old Senate seat, or soon to be old Senate seat.
0:50:33 There are 11 candidates in that race, eight of them have endorsed Donald Trump.
0:50:37 John Curtis has not endorsed Donald Trump and actually started something called the
0:50:40 Conservative Climate Caucus in Congress.
0:50:43 So he believes in climate change, shocker.
0:50:46 But a lot of Democrats would look up and say, “Oh, he’s gone our next to his name,
0:50:50 so, you know, can’t get behind him,” but we think that’s short-sighted.
0:50:55 So you’re not just a political person, but you’re an actual business person and you
0:50:59 understand the way the economy works, I would argue pretty well.
0:51:05 What are the downsides of duopoly writ large, whether it’s in an economic system or a political
0:51:06 system?
0:51:10 Because one might say, “Well, maybe it makes sense, because if there’s too much choice,
0:51:11 it gets baffling.”
0:51:15 And also, the bigger and more powerful you get, the more resources you have, the more
0:51:16 you know what you’re doing.
0:51:19 So maybe we should be in favor of duopoly.
0:51:23 Well, in the political sphere, what’s interesting, Stephen, is the vast majority of us, about
0:51:28 70% of Americans, live not under two-party rule, but one-party rule.
0:51:33 It’s not like Democrats are really trying to run and win in rural Missouri.
0:51:37 It’s not like Republicans are really trying to run and win in San Francisco.
0:51:44 You have these only 5% to 10% genuine swing districts, and then the major exception to
0:51:47 this is in the presidential.
0:51:50 Even in the presidential, your vote won’t matter, my vote won’t matter.
0:51:55 The only votes that are going to matter are based in Michigan, Pennsylvania, Wisconsin,
0:51:57 Arizona, Nevada, Georgia.
0:52:01 And that’s something that most Americans also just sort of shrugged and said, “I guess
0:52:08 that’s the way we do things,” but the duopoly is effectively one-party rule for about two-thirds
0:52:09 of the country.
0:52:15 So if, as you’re saying, making most districts basically one-party district is the root cause
0:52:19 of so much of this, what good would a third or fourth or fifth party do?
0:52:25 Well, the goal of any independent party, if they’re smart, is to try and reform the voting
0:52:30 system so you have more true accountability and a feedback loop between people and our
0:52:31 leaders.
0:52:37 In Alaska, they shifted to an all-party primary where voters can vote for a candidate of any
0:52:42 party with a top four getting through to the general and chosen via ranked-choice voting.
0:52:48 So a little-known former vice presidential nominee named Sarah Palin was on the ballot
0:52:52 in ’22, and in a customary system, she wins the Republican primary and probably wins the
0:52:55 general because it’s a red-leaning state.
0:53:00 But in the new system, there was a general election with multiple candidates, including
0:53:07 a fairly innocuous state legislator named Mary Paltola, who is very pleasant and congenial,
0:53:13 and a critical number of Alaskan voters placed Mary Paltola as their second choice, thus edging
0:53:16 out Sarah Palin.
0:53:21 And if Sarah Palin was back in D.C., we’d all be subject to clips of her saying something
0:53:26 crazy every week because there’d be a TV camera in her face every week.
0:53:31 And we were spared that because they changed the voting system in Alaska.
0:53:36 In the Senate race, in that same cycle in ’22, Lisa Murkowski was up for reelection.
0:53:39 She voted to impeach Donald Trump, which is a no-no.
0:53:43 It makes you run afoul of the base, eight out of 10 of the Republican House members
0:53:47 who made the same choice did not make it back to the primaries.
0:53:52 But Lisa Murkowski made it back because, again, Alaska essentially replaced their Republican
0:53:54 primary with an all-party primary.
0:53:59 And so Lisa Murkowski was able to get through in the general election because a critical
0:54:01 number of Alaskan voters ranked her second.
0:54:03 So a couple of things here.
0:54:06 Is an all-party primary the same as an open primary?
0:54:07 An open primary is different.
0:54:12 An open primary is something where, hey, you’re an unregistered voter.
0:54:17 You can show up and vote in our primary this once, and in some case, you have to register
0:54:21 as that party for the purposes of that vote, and then you can unregister.
0:54:26 A closed primary is you have to be registered four months in advance or something like that.
0:54:31 Nonpartisan primary, what they did in Alaska is the most dramatic, which is, hey, everyone
0:54:34 show up in the same primary.
0:54:35 You vote for your candidate.
0:54:36 I vote for my candidate.
0:54:38 We can all vote for whichever candidate we want.
0:54:42 We can even have multiple candidates from the same party running.
0:54:48 And then the true measure of popular will and representation will emerge as opposed to
0:54:52 slicing us into one party or another.
0:54:57 Were the Alaska outcomes more about the all-party primary or more about the ranked choice voting,
0:55:01 or did they dovetail perfectly?
0:55:05 You know, it’s an element where one plus one equals three, where nonpartisan primaries
0:55:08 are dramatic improvement, ranked choice voting, general elections are dramatic improvement,
0:55:13 but you put them together and you wind up with a candidate who genuinely has the backing
0:55:18 of more than 50.1% of the people.
0:55:19 So here’s the thing.
0:55:20 I know you a little bit.
0:55:21 We’ve spoken on this show a few times.
0:55:27 We’ve spoken off the show a few times, and I know you to be sincere and intelligent and
0:55:31 decent person who I think wants the best for a lot of people.
0:55:37 You also sound a little bit bonkers to me right now because you are tilting at windmills
0:55:39 that are gigantic.
0:55:44 You speak with sincerity, and I believe you, but do you expect to have any real effect
0:55:50 on the political system, whether in 2024 or in the next 10 years, with this forward party?
0:55:51 Oh, yeah.
0:55:56 We already have dozens of elected officials who are aligned with the forward party.
0:56:03 Two state senators in Pennsylvania, Lisa Boscola and Anthony Williams, the mayor of Fort Collins,
0:56:04 Colorado.
0:56:07 I mean, these are electeds who stood up already and said, “You know what?
0:56:12 I want to represent my constituents and I don’t want to be answerable to this mega party
0:56:18 that may or may not actually align with what the folks I represent believe in and value.”
0:56:24 And this is despite having a sliver of the resources of either the parties.
0:56:31 So if you could be a czar of some kind, even though we’re not a country that embraces czars
0:56:38 historically, and you had the ability to remake the political system, the electoral system,
0:56:44 and you’re not trying to do it in a drastic draconian overnight way, let’s say you could
0:56:51 build a 10-year plan, what would be the first three or five tenets of that 10-year plan?
0:56:56 We need elections that actually make our representatives answerable to us.
0:56:58 That’s the main thing.
0:57:03 We’ve let a bunch of negative things build up and our leaders are unresponsive.
0:57:07 If you had a genuine feedback loop, then all of a sudden our leaders would say, “Wait
0:57:08 a minute, what?
0:57:09 Like young people can’t afford a house?
0:57:10 That’s a problem.
0:57:16 What the cost of being a middle-class person with housing and transportation and education
0:57:20 and health care is going up and up and you feel distraught about it?
0:57:23 Let’s actually get to some of the root problems.”
0:57:28 And the way to do that visibly in an era when it’s very difficult to imagine our elected
0:57:33 leaders doing something against their self-interest is to go to states where they have the means
0:57:38 to change the voting system and say, “Look, guys, let’s just make it so that anyone can
0:57:45 vote for any candidate of any party, Allah, Alaska, Allah, we hope Nevada as of November,
0:57:50 and just march through as many states as possible freeing our elected leaders from party primaries
0:57:56 that right now keep them from making any meaningful progress on issues.
0:57:58 Here’s the thing about Andrew Yang.
0:58:04 He’s enthusiastic and he’s enthusiastic about ideas that I think are generally good ones.
0:58:10 But is he too enthusiastic about the odds of successful reform?
0:58:15 What do you make of his prediction that someone like him can push our political system in
0:58:17 a strong, positive direction?
0:58:25 No offense to Andrew Yang but his track record as a political forecaster is not so good.
0:58:29 Last year, he told me that Dean Phillips, the Minnesota congressman who challenged Joe
0:58:35 Biden in the Democratic presidential primaries, was going to perform very well in the early
0:58:40 states, so well that he would shake up the entire 2024 election.
0:58:45 But Phillips didn’t perform well and he ran back into the arms of his party and endorsed
0:58:46 President Biden.
0:58:50 You want to know why Phillips ran in the first place?
0:58:57 He was worried that Joe Biden was simply too weak a candidate to win and that backing him
0:59:03 would pave the way for a Trump victory, which Phillips being a Democrat did not want.
0:59:09 So getting back to Andrew Yang’s prediction, he was wrong that Dean Phillips would get
0:59:14 a lot of primary support by attacking Biden, but after Biden’s disastrous performance in
0:59:19 that first debate, many Democrats and their supporters, including the New York Times editorial
0:59:25 board, are calling for the president to be replaced on the Democratic ticket.
0:59:30 So maybe Andrew Yang was on to something after all.
0:59:31 That’s our show for today.
0:59:33 Sorry about my sore throat.
0:59:34 Thanks for listening.
0:59:40 I’d love to hear any feedback you have about this episode or the political duopoly in general
0:59:42 or anything else you want to say, really.
0:59:46 Our email is radio@freakonomics.com.
0:59:52 Coming up next time on the show, Daniel Kahneman is perhaps best known as the author of Thinking
0:59:58 Fast and Slow, but he also helped revolutionize the fields of both psychology and economics,
1:00:01 and his influence has been enormous.
1:00:03 Kahneman recently died at age 90.
1:00:09 A bunch of his peers, friends, and mentees recently got together to sort out just where
1:00:15 that influence has landed, and we were there with microphones.
1:00:19 He felt that this is the right way to do science.
1:00:24 I mean, partly, Daniel’s to blame, although he didn’t learn that before he passed away.
1:00:31 In adversarial collaborations, the arbiter is the research assistant, the tiebreaker,
1:00:34 and occasionally the therapist.
1:00:37 Did they pay you for that?
1:00:40 I’m getting paid the same as you, Maya.
1:00:42 That’s next time on the show.
1:00:47 Until then, take care of yourself and, if you can, someone else too.
1:00:49 Freakonomics Radio is produced by Stitcher and Renbud Radio.
1:00:55 You can find our entire archive on any podcast app, also at freakonomics.com, where we publish
1:00:57 transcripts and show notes.
1:01:01 This episode was produced by Greg Grzalski and Zak Lipinski.
1:01:06 Our staff also includes Alina Kulman, Augusta Chapman, Dalvin Abouaji, Eleanor Osborne,
1:01:12 Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, Julie Canfer,
1:01:17 Lyric Bowditch, Morgan Levy, Neil Coruth, Rebecca Lee Douglas, Sara Lilly, and Theo Jacobs.
1:01:20 Our theme song is Mr. Fortune by the Hitchhikers.
1:01:23 Our composer is Luis Guerra.
1:01:26 As always, thank you for listening.
1:01:28 I can see myself, but is this audio only?
1:01:29 It’s audio only.
1:01:31 You can take off your pants if you want.
1:01:32 Nice.
1:01:45 The Freakonomics Radio Network – the hidden side of everything.
1:01:46 Stitcher.
1:01:48 (soft music)
1:01:50 you
American politics is trapped in a duopoly, with two all-powerful parties colluding to stifle competition. We revisit a 2018 episode to explain how the political industry works, and talk to a reformer (and former presidential candidate) who is pushing for change.
- SOURCES:
- Katherine Gehl, former president and C.E.O. of Gehl Foods.
- Michael Porter, professor at Harvard Business School.
- Andrew Yang, co-chair of the Forward Party and former U.S. presidential candidate.
- RESOURCES:
- “Why U.S. Politics Is Broken — and How to Fix It,” by Andrew Yang (TED, 2024).
- The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy, by Michael Porter and Katherine Gehl (2020).
- “Why Competition in the Politics Industry is Failing America,” Katherine Gehl and Michael Porter (Harvard Business School, 2017).
- “Stronger Parties, Stronger Democracy: Rethinking Reform,” by Ian Vandewalker and Daniel I. Weiner (Brennan Center for Justice, 2015).
- On Competition, by Michael Porter (2008).
- Competitive Strategy: Techniques for Analyzing Industries and Competitors, by Michael Porter (1980).
- EXTRAS:
- “Andrew Yang Is Not Giving Up on Politics — or the U.S. — Yet,” by People I (Mostly) Admire (2021).
- “The Future of New York City Is in Question. Could Andrew Yang Be the Answer?” by Freakonomics Radio (2021).
- “Why Is This Man Running for President? (Update),” by Freakonomics Radio (2019).
- “Ten Ideas to Make Politics Less Rotten,” Freakonomics Radio (2016).