The Democrats and the Republicans are about to lose badly to the Internet

San Francisco Chronicle ^ | January 11, 2004 | Everett Ehrlich

[John Jorsett]

For decades, the Republican and Democratic parties were the most effective ways to organize like-minded people to achieve political ends. But now, they have been upstaged by the Internet, as Howard Dean demonstrated.

The person whose theories predicted this landmark transition was not a politician, a spin-doctor, or a high-powered campaign consultant, but a British economist named Ronald Coase who wrote seven decades ago.

[ladyrustic]

I knew this internet thing was going to be big.

[reed_inthe_wind]

over time, tension will develop between the notion of a federal representative who is bound to a geographic district, and the desire for dispersed but like minded voters who want to elect their particular representative from a virtual district.

Neocons who create new democracies may build the first such virtual district in places like Iraq.

It should not be assumed that the internet will divide people, the intermingling of ideas in forums like this may create a larger demand for truth and wisdom.

In the end, game theory may trump transaction cost analysis, resulting in a virtual deadheat election every time - and ensuring the two party system, RINOs and all.

[Joe Bonforte]

An insightful article, but the author misses one major point. Companies have to flatten out because they have competition that forces them to do so. They have no other recourse. But political parties *do* have recourse. They can change the rules of the game.

It's already very hard for third parties to get on the ballot in many places. The major political parties, since they control the law-making apparatus, could easily make it even harder. I don't know if this capability will be enough for them to maintain their duopoly, but it might be if they are willing to go to the mat to get the laws they need to suppress third parties.

Add in the fact that our voting system naturally favors two major parties. These dinosaurs may hang on after all (though I would wish otherwise).

[Mini-14]

Sooner or later, it's going to happen. All because of what an economist named Ronald Coase wrote seven decades ago Al Gore invented the Internet.

[mrsmith]

These liberal idiots kill me: now Dean's internet campaign (or Moveon) is supposed to be the new Salon LOL!

The internet just prevents the media from squelching debate. Everything else in politics is pretty much the same.

[Gorjus]

ping for later

[Spirited]

Thump!

[Professional Engineer]

One question remains. Will be call ourselves the FReeper party or the Internet party?

[expatpat]

The Coase theory is fine for functions like marketing and out-sourcing, but there are still factors: (a) economy of scale, (b) division of labor, that are important in the corporate world. For example, it's much more efficient for a company of 1000 people to provide all the reports and tax returns required by Government than for 10 companies of 100 people to provide it ten times. Assembling cars is more efficient with division of labor on a line, than one guy building a whole car.

That being said, voting is a function where you'd think the Coase theory should apply, although the need for humans to interact face to face is a powerful force -- for party rallies, for example.

[xzins]

Third, the evangelical right will become a separate political party in the near future, and will hold its own conventions and primaries. Like the Conservative Party in New York state, it will usually endorse Republican candidates. But evangelicals will use their inherent party-ness to make the Republican candidate stand in front of them and give a separate acceptance speech.

This is a bad idea for the evangelical right.

Differences in evangelicalism also make it unlikely.

[Gritty]

The major political parties, since they control the law-making apparatus, could easily make it even harder. I don't know if this capability will be enough for them to maintain their duopoly, but it might be if they are willing to go to the mat to get the laws they need to suppress third parties.

You have hit on something here.

It is also precisely the aim of "Campaign Finance Reform". It is not only to eliminate third parties, but also to control the flow and amount of information, thereby maintaining the supremacy of the "old media" and entrenched political machines. They both despise the unrestricted flow of information as it threatens their very existence.

[Free_at_last_-2001]

I knew this internet thing was going to be big. - Naw it'll never catch on!

[general_re]

Third parties aren't likely to be any more successful now than they have been for the last hundred years. Aside from the structural disadvantages that you point out, historically what has tended to happen is that, as soon as a third party pops up with an idea that looks like it will resonate with a fair number of people, that same idea is taken and incorporated by one of the two major parties.

But here, there's not really an issue for the Democratic party to steal from Dean, because he's aiming for an absolute once-in-a-lifetime window of opportunity. Howard Dean is not going to "re-emerge as a third-party force four years from now" - his one different idea, opposing the war in Iraq, is not going to be an issue in four years, because for all intents and purposes, it'll be over. Once Iraq settles down and we leave, Howard will have lost his "hook" - he'll just be another ordinary Dem from a boring little state with no ideas or experience to separate him from the rest of the pack. And he'll have ended his career in politics, because if he muffs it this time around, nobody will want a thing to do with him in four years. The days when a William Jennings Bryan could run for and lose the presidency four times are long gone - nobody has the patience or attention span to back proven losers a second time any more.

[tahiti]

"Everett Ehrlich,... was undersecretary of commerce for economic affairs in the Clinton administration.

...He is also a regular economics commentator on National Public Radio's Morning Edition,

...He lives with his wife and three children in Bethesda, Maryland."

This author is a big time statist. He has very little, if any credibility with me and should be the same for all liberty lovers.

And here is the sentence that gives his "statist" position away.

"And finally, a third-party candidate will win the presidency within the lifetime of most of us. Issues -- to my thinking, the shared, bipartisan responsibility for the coming fiscal debacle and the inescapable abrogation of promises made on Social Security and Medicare -- will give the third-party candidate an opening."

Several "third-party" candidates, now, have already attempted this "opening" and cannot get the electorates attention not to vote Republican or Democrat.

[Jack Black]

Add in the fact that our voting system naturally favors two major parties

Exactly. We have a winner take all system. This drives people to form coalitions that result in 51% majorities, which make them the winner. Parlimentary systems that reward proportional representation allow for lots of third parties. That's why Israel, Germany, Italy and the rest all have them and we don't. Our system is deeply ingrained and hard to change (notice how far Hillary! got on the elimination of the Electoral College). Therefore I think we'll see two parties for the forseeable future. The internet may help people take over one of them, as Dean has tried to, but soon everyone will use that equally and it will be just another factor.

I do not think Evangelicals will form their own party. Why should they. They are smart enough to know that it would only result in them failing to hit the magic 51% and having no power. As it is they exert significant influence on the Republican Party, which is the current winner of all the marbles.

[Ciexyz]

John Nash game theory bump.

[Da Mav]

A provacative and interesting article. However the internet hardly reduces transaction costs to zero.

Take eBay as an example of the new internet market. A great of expense is put into validating buyers and sellers, and post-transaction litigation on bad or bungled deals. Somebody has to set up the infrastructure for such a market, and it has cost billions in capital. Yet the transactions involve what should be relatively simple goods of exchange. Imagine more complex service transactions such as for creating mailers or canvasing.

While the internet may reduce transaction costs, it hardly eliminates them. He takes Coase to an extreme.

[johnb838]

Everything else in politics is pretty much the same.

I generally am skeptical of arguments that the internet is going to take over everything, but it does have an effect on my political power. It's a lot easier for me to vote with my wallet in any race in the country that I want than it ever was before. For example, last cycle every time Dschle would piss me off it was a snap to drop another 20 on Thune. Or when Cornyn would look like he was getting in trouble I would throw him another bone. And I've never donated to political campaigns in the past. It's just so easy.

[mrsmith]

People were always able to do that through their membership in organizations which would alert them to other candidates to support.
But you're right that it's easier, and lessens the power of the special interest organizations.

I see the internet's corrective effect on the media so overwhelming any other impact though. Dean, Clark or any Dem candidate cannot be successfully portrayed in the media as a "moderate" these days. That makes it nearly impossible for them to run a candidate acceptable to their small base of voters.