In a short radio segment today I heard some pundit speculate, matter of factly, that Hillary Clinton “obviously wishes that Bernie Sanders would have faded in the primaries much earlier than he did so that she wouldn’t have had to tack so far and for so long to the left.” I quote here from memory, but this sort of sentiment is commonplace in discussions of politics. Political scientists and pundits and reporters – and, surely, many members of the general public – recognize as a plain fact of politics that candidates for political office often take positions merely to attract more voters but with no intention of actually sticking to those positions when in office – or even in later stages of the same campaign.
This reality of outright lying during campaigns is so familiar that we excuse it. It’s just what politicians do.
But suppose that a business owner did the equivalent in the market. Such behavior wouldn’t be tolerated by customers or by law-enforcement officials. For example, suppose that the owner of Acme Furniture, in a scheme to get more sales, outright lies with a radio ad that promises that everyone who buys any piece of furniture from Acme will get half of the purchase price refunded in 12 months. “Wow! Darn good deal!” consumers think. They flock to Acme and buy furniture.
One year later, Acme customers submit their applications for the refunds of half of the purchase prices they each paid. But these customers, rather than getting what Acme promised, instead get a note from Acme explaining that the promise of a refund was made in jest; it was designed only to get more consumers to buy furniture from Acme. “But don’t worry!” the letter from Acme continues, “you’re still better off having bought furniture from Acme than from any of Acme’s competitors. Trust me on this! Yours Sincerely,….”
From time to time unscrupulous (and, typically, also really stupid or myopic) business people pull fraudulent stunts such as this one. Yet – rightly – no one excuses these stunts as being par for the course in business. One reason, of course, is that such stunts are not par for the course in private business; far from it. But such stunts are indeed par for the course in politics. And yet, despite this reality, we are constantly told that businesses operating in competitive markets cannot be trusted to behave honestly unless they are regulated by politicians and bureaucrats operating in political ‘markets.’
Politicians lie and such lying is excused because it’s normal. But it’s not normal; it’s not normal in the private sector; it’s normal only in the very abnormal world of politics.
Strange, that. Very strange indeed.
I continue below the fold with a wonkier version of this point – a version that brings in Harold Hotelling’s spatial model of competition.
When political scientists and public-choice economists teach about the above-explained and often-observed political behavior they typically use an example first developed, I believe, by the late Harold Hotelling in a 1929 article in the Economic Journal (“Stability in Competition“). The version of the example that is most familiar begins by asking students to imagine people – swimmers, sun-bathers, life-guards – arrayed evenly spaced along a long stretch of beach. Merchants selling drinks come to the beach in hopes of earning as much profit as possible, but there’s competition. No merchant enjoys an exclusive privilege of selling drinks on the beach.
So where on the beach does each merchant set up his or her stand and umbrella? Suppose there are two merchants – A and B – each one selling products that are pretty much identical to the products sold by the other, and also at prices pretty much the same as the other. The only factor determining which merchant the people on the beach choose to buy from is the distance from each customer to each merchant. Swimmer Jones will buy his bottled water from merchant A if, and only if, merchant A is physically closer to Jones than is merchant B.
If merchant B wants Jones’s patronage, B has to move closer to where Jones is.
It’s easy to show that with only two merchants under these conditions, both merchants will soon wind up in the middle of the long stretch of beach. The reason is that a merchant who stubbornly chooses to stay put near, say, the southern end of the beach will get as customers only those people who are even further south on the beach than is the merchant, as well as those relatively few customers who are to that merchant’s north and closer to this merchant than they are to the other merchant who is located further north along the beach. If this ‘southern’ merchant loses his stubbornness and moves his stand a bit further northward, but not as far north as the other merchant, he will still get the patronage of all the customers who are to his southward side plus the patronage of a larger number of northward-located customers. So this merchant moves northward.
The more northerly located merchant follows the same competitive strategy and moves his stand further southward. These movements continue until both merchants are in the center of the beach, with each one serving half of the customers on the beach.
The analogy with voting is obvious. A candidate who wants to win office above all yet who starts out on the far left of the range of voters and further left than his political opponent, will “tack” rightward. By doing so this candidate can still count on the votes of the voters on the far left while increasing the number of votes he gets from voters further to the right.
Now, because in modern U.S. national elections each party chooses its candidates in primary elections, with the primary-winning candidates then going on to face each other in the November general election, the story is only a bit more complicated – but not much. Democrats being, as a group, further to the left than Republicans, the Democrat who wins the primary elections must, to have won, staked out a position in the primaries that is further to the left than that candidate will find to be a winning strategy in the general election. Ditto for the Republican candidate, except, of course, the primary-winning GOP candidate will have staked out in the primaries a position that is further to the right than he or she will find to be a winning strategy for the general election.
Come the general election, each candidate will then – because now all voters, Democrats and Republicans (and others) are up for grabs – tack to the center: the Democrat will tack right and the GOP candidate will tack left. Again, this reality is commonplace and widely recognized and understood – and (again) excused as being simply in the nature of politics.
But – and here’s the point of this blog post – this Hotelling analogy has a fatal flaw. Each merchant on the beach actually conducts business from the location that that merchant is situated. For the Hotelling analogy to be closer to the reality of politics, each merchant would appear to customers to be at the center of the beach, but when the typical customer gets to a merchant’s stand and lays down her money for a bottle of water or a Corona, the merchant, taking the money, informs the customer that she, the customer, must now walk several hundred feet away from the stand in order to pick up the item she purchased. That is, the merchant only moves to the center to get the customer to pay up, but in fact the merchant – by delivering products from a location on the beach different from what the customer was led to believe – does not actually supply the customer with the service the customer bargained for.
In short, in Hotelling’s model the merchants actually do move to the center and conduct their business there. Customers get what they expect and pay for. But in real-world politics, politicians are chiefly in the business of lying about what their positions are. Voters don’t really know what they’re getting.
