Political Parties Are Out of Touch
Watching both parties election races has been interesting. Let’s ignore the statements and politics from both sides and focus on something else. Clearly, when #resistCapitalism is a trending Twitter hashtag on the Democratic side, and all Republicans can do is wrap themselves up in knots appealing to hard right social conservatives, we should ignore them.
The more important lesson here from both sides is the difference between hierarchal centralized planning and free market networks.
Since the beginning of political parties in the US, it has behooved them to have central planning. Strategy wise, it made a lot of sense because they could organize around a set of core principles. They could control their message. They could control their elected representatives and push their agenda. This reliance on central planning gave us the proverbial “smoke filled back room”.
Businesses do the same thing depending on their target market. Food companies often are highly centrally planned because they want consistency across every restaurant in the chain. Mrs. Field’s cookies and McDonald’s are classic cases in how to use hierarchy to bring a consistent product to a specific target market.
The world has changed though. Network beats hierarchy. A smartphone in your pocket means you can opt in or opt out of a network instantaneously. Once the network is big enough, norms form and trust flows across the network.
It can be argued the both political parties do not trust their members, hence their reliance on hierarchy.
Businesses that have embraced network models are booming. Facebook is obvious. Traditional businesses have embraced the networked model long ago. You might not have realized it. Ritz-Carlton runs it’s hotel chain through a networked model. Employees at the very lowest level are empowered to make decisions. Who knows better in the moment what the customer needs, the maid or the corporate executive that is miles away from the problem?
Both parties are clearly out of touch with their members. Republicans are more fragmented than Democrats. Their fragmentation is historical, not recent. Republican voters are also angrier than Democratic voters. The Republican voters were asked to donate money and turn out so Republicans could get a majority in Congress. What have they gotten for it?
Nothing.
Republicans pushed agendas that were out of touch with what they promised their voters. Instead of passing bills that Obama would have to veto, they mostly caved to avoid a fight. This created a climate where a candidate like Trump could rise. Trump probably has no chance of getting the nomination because the Republican central planners have turned it into a race for delegates, not popular votes.
On the other hand, Democrats are also upset. For many, this is hard to understand since they are getting most of what they want. But, look at what’s happening in their party. A socialist has the emotional pull on Democrats in a country that is a beacon for free market capitalism across the world. He has zero chance of getting the nomination because the party bosses are already lined up behind the other candidate.
To be honest, the reason people have lost faith in free markets is because both parties practiced extreme crony capitalism that makes everyone think everything is rigged.
Government in Washington has become highly centralized. The bulging, fat bureaucracy makes it even more centralized. Washington DC makes rules for everyone-and those rules don’t fit. Pensacola, Florida is not like Spokane, Washington. Washington has decided to abandon principles in favor or exact rules. Principles are flexible, edicts aren’t.
I don’t know who will win in this election cycle because it’s so volatile. I do know that long term, the party that figures out how to turn itself into a network rather than a hierarchy will control the agenda for the next generation.
