Introduction

In 2005, celebrated author David Foster Wallace delivered a commencement address at Kenyon College. He started with a fish story: “There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, ‘Morning, boys. How’s the water?’ The two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, ‘What the hell is water?’”1

After Wallace assured the new graduates that he wasn’t positioning himself as an embodiment of the wise old fish, he got to the point of the story: “The most obvious, ubiquitous, important realities are the ones that are hardest to see and talk about.”

For most Americans, the political system surrounds us in much the same way water surrounds fish. It’s just what we know. It’s normal. And while we complain about its performance, we don’t question its nature because we don’t believe it can change. We accept dysfunction, gridlock, and government inaction—even in the face of national adversity—as normal. And when we return to our polling places on Election Day and yet again see only two choices on our ballots—neither of which we really like—we accept that as normal, too. Here’s what else has become normal for far too many Americans over the last fifty years: a quality-of-life downturn so significant that, when compared with the thirty-six other peer democratic countries with advanced economies, we Americans are near the bottom across numerous dimensions we once pioneered. We are thirty-third in access to quality education, thirty-third in child mortality, twenty-sixth in discrimination and violence against minorities, and thirty-first in clean drinking water—just to name a few.2

The actual water in America is getting bad now.

Couple this distressing societal collapse with a major slide in our global economic competitiveness, historically high levels of gridlock, and historically low trust in government, and it is not an overstatement to say the great American experiment is at risk of unraveling.

Yet political normalcy has enveloped us. Apathy and abdication blunt our personal agency—our ability to bring about change—and tamp down momentary flashes of outrage. Those who haven’t succumbed to learned helplessness try to do something about it, often by doubling down on their political party, certain that the other side is the problem. Others pin their hopes on that mythical change candidate who will finally fix things, whether through “hope and change” or by “draining the swamp.” Some dedicate themselves to major policy concerns, like the national debt or immigration. But this is about much more than people or parties or policies. The root cause of our political dysfunction is deeper, where nobody cares to look, and is centered around one unifying theme—the forces of competition—in a system that doesn’t work like you probably think it does.

Most people think of our American political system as a public institution that follows a set of high-minded principles and impartial structures and practices derived from the Constitution. But that’s hardly the whole story. Much of today’s system is a self-serving, self-perpetuating private industry composed of gain-seeking actors who write their own rules. They compete to grow and accumulate resources for themselves—not necessarily to serve the publicinterest—and create artificial barriers to prevent new competition from threatening their hold on the industry. What should be a problem-solving, outcomes-driven cycle of elections and legislative leadership is instead an industrial-strength perversion that fosters unhealthy competition and blocks the innovation and progress for which American democracy is known. Politics has become the preeminent barrier to addressing the very problems it exists to solve.

The engines of this regression are the unheralded but all-powerful rules, structures, norms, and practices (what we call the machinery of politics) that quietly determine everything from how candidates get on a ballot and how we vote to how a bill becomes a law. And both sides of the ideological divide are to blame. Waves of unchecked engineering of these rules and practices—orchestrated jointly by Democrats and Republicans—have optimized the elections and lawmaking machinery to protect and perpetuate the politics industry itself and grow its power, not to produce results. The power of new competition to rein in the runaway system has been intentionally and systematically neutralized, augmenting a state of play now bound to its own dysfunction and inaction.

Washington, D.C., is broken, right?

We say it all the time, throwing our hands in the air, ceaselessly condemning the nerve center of our politics. And the claim must be true, because seemingly every candidate for office, regardless of political party, repeats it as a rallying cry. But as former congressman Mickey Edwards (R-OK) brilliantly explained, this hackneyed phrase represents a fundamental misunderstanding of—or worse, a slippery misdirection from—what’s really going on. In fact, Washington is working exactly how it is designed to work and delivering exactly the results it is designed to deliver, because it wasn’t designed to work for us—for the citizens, the voters, the public interest.3 What appears broken to us is humming right along for the industry itself, and it will not self-correct. To force a correction, we must revive the American tradition of political innovation. To change the results our system delivers, we must change the rules of the game. That’s the singular power and sole purpose of this book, and the only legacy we care about.

Power and purpose flow from clarity; we must first—like those two young fish—see the water we’re swimming in. In the politics industry, it all boils down to the corrupted cycle of elections and legislation—and they don’t work as you think they do. They don’t work for us at all.

How Elections and Legislation Really Work Today

Imagine you are a member of the US House of Representatives. You are deliberating over a bill that addresses a critical national challenge that should be handled on a bipartisan basis. As an elected representative, you should consider several seemingly obvious questions: Is this a good idea? Is this the right policy for the country? Is this what the majority of my constituents want? But as a participant in our current political system, you have only one question to answer: Will I make it back through my party’s next primary election if I vote for this? If the answer to that question is no, and it virtually always is for the tough problems, then the other questions are irrelevant because the rational incentive to get reelected—to keep your job—compels you to vote against this bill.

But perhaps this time you decide to put country over party. You take the risk and publicly endorse the bill’s artful compromise solution. You ignore the pleas of your party leadership. You weather threats and temptations from special interests. And you vote in favor of the bill.

You are in trouble.

For the purposes of your upcoming reelection, it doesn’t matter if the bill passes or not. It doesn’t matter if you are lauded by pundits, good-government reformers, or local constituents for your bipartisan leadership. It doesn’t really matter if the bill is likely to produce good outcomes. What does matter, assuming you want to keep your job, is how your side of the partisan system you just bucked is going to respond.4

Here’s where one of the most powerful verbs in American politics comes into play: you’re about to get primaried.5 In the next party primary election (or partisan primary), a contest for the party’s nomination dominated by special interests and sharply ideological voters, you can expect an überleft challenger if you’re a Democrat and a hard-right opponent if you’re a Republican.6

You’ll probably lose, because rampant unhealthy competition in politics means that for an elected official there is virtually no intersection between acting in the public interest and the likelihood of getting reelected. In our current system of running for office and legislating, if you do your job the way we need you to, you’re likely to lose your job. Party primaries create an eye of the needle through which no problem-solving politician can pass. This is absurd.

Look at it from another perspective.

Suppose you’re not an elected official. Instead, you’re a person who has made a successful career in business, and like the vast majority of citizens across America, you are deeply dissatisfied with Congress. Your success in business comes from your ability to identify opportunities in the marketplace, and when you look at politics, the demand for better options couldn’t be more obvious—particularly in your district, where another lesser-of-two-evils election is just around the corner. So, ever the entrepreneur, you throw your hat in the ring, perhaps as an independent, or maybe, quite boldly, you launch a startup: a new political party.

In the beginning, the race is promising. Your policy platform and solutions-oriented messaging strikes a chord. Despite your newcomer status, you gain ground quickly. Voters are paying attention to your candidacy, and, at the least, they want to see you on the debate stage. Most of your would-be constituents favor compromise over gridlock, so you pledge to work across the aisle on Capitol Hill. Perhaps most audaciously, you commit to a positive campaign, eschewing the demonization of your opponents in favor of talking about the issues.

Your poll numbers rise. You’re beginning to seem competitive.

But there’s a hitch. With your momentum building, local opinion makers, political insiders, and even close friends reach out and implore you: Drop out. Winning is a long shot, they say, and every vote you earn is a vote stolen from a major-party candidate—the candidate you would be resigned to support if you weren’t in the race yourself. If you don’t drop out now, you might spoil the election by stealing the votes that this major-party candidate needs to win. This argument strikes you as deeply unfair. How could fewer choices—fewer new ideas—be better for voters who are craving other options? The reality of American elections becomes clear: staying in the race might well mean handing a victory to the greater of two evils—the very candidate you were working so hard to defeat in the first place.

You ran for office because you spotted an opportunity to act in the public interest—to deliver solutions ignored by the current players. Your startup campaign was poised to fill a gap in the marketplace. But in American elections, plurality voting—the dominant, first-past-the-post, winner-take-all voting system—creates the spoiler phenomenon and dissuades would-be elected officials like you from running altogether.

Frustrated and amazed by this truly un-American abuse of the free market, you do what any good, civic-minded citizen would do: you pursue legal action, believing you have a promising antitrust case. But you are quickly flummoxed yet again. Ever so conveniently, and unlike in most industries, antitrust regulation doesn’t apply to politics—and no independent regulator is coming to the rescue.7

Welcome to the politics industry, where party primaries and plurality voting combine to punish the public interest. There are few incentives to solve problems. There is little accountability for results. And there are no countervailing forces to restore healthy competition … yet.

Fundamentals of Politics Industry Theory

At the center of the politics industry are two rivals that can only be described as a textbook duopoly: the Democratic Party and the Republican Party. Around this duopoly has arisen a massive arrangement of actors and organizations, including special interest groups, lobbyists, big-money donors, super PACs, think tanks, pollsters, consultants, and the media that bridges Washington, D.C., to the rest of the country. By nearly every measure, the duopoly and the supporting bodies around it—what we call the political-industrial complex—is thriving. A recent result will hammer the point home: spending in federal elections during the 2016 cycle was more than $16 billion, which is greater than the annual budgets of at least a dozen states.

How can an industry so successful fail its customers—the American public—so mightily? In any other industry this large and thriving, with this much customer dissatisfaction, some entrepreneur would see this as a phenomenal opportunity and create a new competitor responding to what customers want. But that doesn’t happen in politics. Why not? The answer to these questions lies in understanding the nature of competition in elections and legislating.

The key methodology we apply is the Five Forces framework, which was originally developed four decades ago to understand industry structure and its effects on the nature of competition in for-profit industries.8 The framework has been the gold standard ever since. The approach recognizes that an industry is a complex system, involving numerous actors who compete but also collaborate.

As we will see, the politics industry is driven by the same five forces that shape competition in any industry: rivals, buyers, suppliers, the threat of new entrants, and the threat of substitutes. By exploring each of these competitive forces and how they relate to one another, we will illuminate the grave implications of unhealthy competition—the perverse incentive structure, the poor results and lack of accountability, and the absence of countervailing forces to inject competition—and reveal how to address other essential questions:

  • Why is the United States innovative in so many areas, but not in politics?
  • Why is it normal to have limited—and often disappointing—choices at the ballot box?
  • Why doesn’t Washington, D.C., get anything done?
  • Why does an independent candidate rarely stand a chance of getting elected?
  • What outcomes should we expect from an optimally functioning political system?
  • And, most importantly, what can we do to start achieving those great outcomes?

Looking at politics through this new lens, we can see why our political challenges have not been solved by substituting one party with the other, or one elected official with another. Nor have new policies or any number of well-meaning political reform efforts solved these problems. This lens also empowers us to fulfill the promise of this book: the political innovation needed to break partisan gridlock and save our democracy. By understanding how the system works, we can more objectively determine how our innovation energy is best spent.

Currently, most efforts to change the politics industry revolve around a laundry list of reforms spanning myriad ideas, such as ending gerrymandering, reducing money in politics, instituting term limits, or establishing Election Day as a national holiday. While we endorse elements of the popular reform agenda, many of its propositions fail to address the root causes of system failure, or aren’t viable from the start. Or both. What is doable and worth doing? What is powerful and achievable? Political innovation. (See figure I-1.)

FIGURE I-1

Political Innovation Is a Nonpartisan Framework for Targeting Root Causes of System Failure in Order to Deliver Measurable Results

image

Let’s distinguish these two elements of political innovation. Powerful innovations address the root causes of dysfunction (not just the symptoms) and are designed to help the political system deliver results in the public interest. Achievable innovations are uncompromisingly nonpartisan (no Trojan horses for partisan gain), and success is theoretically possible in years, not decades (constitutional amendments, for example, do not pass this bar).

Politics Industry Theory is the key to unlocking this framework. By demystifying the nature of politics and mapping the complex forces at work, the prescription for innovation becomes clear: change the machinery of politics—the rules that govern elections and legislating. As is always the case in life, the rules of the game affect how the game is played and the outcomes of that game. The net result of the rules of the game in the politics industry is unhealthy competition. And the result of unhealthy competition, in any industry, is that customers are not well served. So, let’s change the rules. Here’s what we propose.

For elections machinery, we propose “Final-Five Voting,” a package that (1) replaces closed, party primaries with nonpartisan open primaries that send the top five finishers to the general election, and (2) replaces plurality voting in the subsequent general elections with ranked-choice voting. (Don’t worry, this will all be clear—how it works, and its transformative power—when you get to chapter 5.)

For legislative machinery, we propose replacing the bloated and outdated rules, practices, and norms of lawmaking with a model, modern approach designed from the ground up to foster cross-partisan problem solving.

Collectively, these innovations will change the very nature of competition in American politics—and get results.

Our Purpose, Process (and Politics)

Our core endeavor is unlocking the forces of healthy competition in American politics to restore a system that fixes real problems in real people’s lives—more choice, more voice, better results.9 This endeavor revolves around a handful of key distinctions that clarify our research and inform our conclusions.

First, from the beginning our purpose has been action, not merely analysis. Analysis, no matter how insightful, is not enough. We work hard to understand the politics industry only to figure out how to fix it. So much of political analysis dwells on commentary, lamentations, or explanations. But it is often short on prescribing real, substantive solutions. As we’ve said, that’s the legacy we care about.

Second, do not confuse our use of this competition lens drawn from business with the idea that government should be run like a business. We don’t believe this. Government has mandates and structures that are profoundly different from those of business. We are concerned here with the political system—not the government itself (the agencies, the departments, the civil service, etc.). The tools used to understand competition in business help illuminate the challenges of, and solutions for, our political system.

Third, our focus is on the results that government delivers to its citizens. It is not centered on theoretically better or more fair democracy, or representation as an end in itself. We are committed to democracy and the freedom and equality it promises. For us, no other system compares. But we are practical as well. Freedom, equality, and representation are not enough to support American democracy on their own. The innovations we propose support democratic values, representation, and democracy writ large. But critically, they will increase the likelihood that government delivers results in the public interest. When government does not deliver, people become angry. As history shows, people the world over become willing to trade the freedom of representative government for the hard fist of authoritarianism.10

Finally, while this is a book about politics, it is not political—or partisan. As coauthors, we’ve got the political spectrum covered. Katherine was a Democrat who now calls herself a “politically homeless centrist independent.” Michael is a lifelong Massachusetts Republican. Additionally, it would be neither correct nor helpful to assign blame to one side or the other, if for no other reason than that the root problems do not revolve around political parties or politicians. We repeat: the root cause that endures across all election cycles and administrations, is the system—the politics industry—not specific people, parties, or policy.

A Guide to Reading This Book

As you read, you’ll notice some new (and perhaps strange) terms we’ve adopted to talk about politics differently—and think about politics differently. For instance, we’ve already referred to the duopoly: our two major political parties who dominate the industry. Our use of this term is neutral and intended to describe the industry dynamic more precisely.

The duopoly exists within what we call the political-industrial complex, a term that further clarifies the industry structure by encompassing the full ecosystem that works in and around our politics, and the amalgamation of actors who interact with today’s political parties and benefit at the expense of most everybody else. In this case, we are hardly neutral about it; in its current form the political-industrial complex presents dire implications for the public interest.

The duopolistic competition plays out chiefly in two arenas: elections and legislating. We’ve noticed that it’s tempting for people to assume that these two arenas are immutable structures beyond anyone’s reach. But that’s not true, as will become clear. To describe these structures, we use the term elections and legislative machinery. Machines are designed by people to reliably deliver a product based on specifications. Today’s elections and legislative machinery comprise the rules, norms, and processes that the duopoly has optimized to afford itself more control over how elections are won and how legislation is passed. This machinery has a profound and reliable impact on the outcomes our politics delivers.

Finally, when we refer to elections and legislating, we’re principally talking about Congress. We’ve chosen this focus for a few reasons. First, fixing Congress is at the sweet spot of powerful and achievable. Second, the Framers intended Congress to be the first branch of the US government, as established in Article 1 of the Constitution. Despite the extraordinary growth and centralization of power in the executive branch, Congress was meant to be the heart of our representative democracy. Third, Congress is where the ramifications of unhealthy competition are most evidently pervasive and destructive. At any given point in time, about half of the country approves of the White House’s job, and half doesn’t. But an overwhelming majority find Congress’s performance to be, shall we say, lacking. Fourth, while much of our analysis and subsequent recommendations are applicable to state (and even municipal) elections and governing, national politics is what is driving us apart.

As long as Congress remains captive to the current incentives of the political-industrial complex, these challenges will only deepen. We explore these challenges and make our case for a new era of political innovation in two parts of this book.

In part 1chapters 1 through 3—we will explore the who, what, when, where, why, and how of competition in the politics industry. In part 2chapters 4 through 6—we focus on political innovation both through the study of American history and by translating our research and theory into a powerful and achievable game plan for breaking partisan gridlock and saving our democracy: Final-Five Voting, and a model, modern legislative machinery. In the conclusion, we describe the way forward and how to take action.

.  .  .

One final note: In light of this book’s release date, it’s quite possible that you’re reading this in the summer or fall of 2020. The timing means that the roar of the presidential campaign is approaching full volume. If you picked up this book amid all this noise, it’s unlikely you believe that the election machinations du jour are bringing out the best in us. We are with you.

When we started this journey, November 2020 seemed light-years away in terms of the political calendar. The theory of the politics industry first took root in 2013, and before it matured into this book, it yielded the Harvard Business School report that we took on the road to pressure-test our thinking and foster discussion. Along the way, we became keenly aware that the theory’s relevance does not ebb and flow with the tides of our elections. Unless the critical political innovations we prescribe in these pages have already been embraced and implemented, it doesn’t matter whether the 2020 presidential conventions are coming for you next month or already came and went. There is no better time than now for this book.

If we fail to address the fundamentals of the system, we will be forever stuck on the same, unhealthy page—yesterday, today and tomorrow. We’re here to turn the page, with you.

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