May 4, 2009

The Party's Over?

The Party's Over?

American party politics have had a few major realignments over the 220 years since we adopted our Constitution.  I took a class on this in school, but that was a long time ago, and I'll never remember all the details.  What I do remember is that they're somewhat chaotic.  And that they typically take several election cycles to take root.

I think we're in the middle of one now.  Arlen Specter's decision to become a Democrat is a particularly poignant example of it, though the fact that something like only 25% of the country now identifies with the Republican party is another.  With Specter, it's not that he changed his ideology — it's that his party changed its ideology.  Whether or not you view his switch as a cynical attempt to keep his job is irrelevant.  He has been a Republican for his whole public life of more than 40 years with a fairly consistent point of view and is a very popular public servant with his constituency at large, and now he believes he can't win a primary voted in mainly by party activists against Republican opponents. 

Something I read today – either the Journal or Politico – had a quote from a Republican hardliner that is further signifying the realignment:

South Carolina Senator Jim DeMint and welcome Mr. Specter's defection as an ideological cleansing. "I would rather have 30 Republicans in the Senate who really believe in principles of limited government, free markets, free people, than to have 60 that don't have a set of beliefs."

That doesn't say much for the future of the GOP now, does it?  That said, I think prognostications of a permanent Democratic majority are unfounded. If I remember my history correctly, a realignment occurs when one party gets too powerful and too big — its opponents are the ones who realign as a check and balance.  Examples range from the Anti-Federalists becoming the original Republicans in the early 19th century, to the rise of the Whig and then Republican Party in the mid 19th century, to the Roosevelt era in the mid 20th century, to the Reagan Revolution in the late 20th century.  American politics are streaky.  Parties usually have a stranglehold on at least one branch of government for long periods of time, then a realignment shakes things up for a while, then control switches.  With the Whigs/Republicans, once they settled down with the election of Lincoln, for example, the party dominated the Presidency for 80 years, winning 6 consecutive presidential elections, 11 of 13, and 14 of 18 from Lincoln up through Franklin Roosevelt. 

I guess my point is that Republicans as we know them today may be doomed, but Democrats shouldn't spend too much time dancing on their grave.  Realignments won't take 20 years to kick in any more.  We move too quickly, information is too freely available, and public opinion is fickle.

What's the lesson here for a business?  It's all about competition.  Having a commanding market share is a great thing, but it's unusual for it to last.  Smaller competitors attack when you least expect it.  They attack in ways that you pooh-pooh based on your perspective of the world.  And they can often combine with other smaller players, whether through M&A or just alliances, in ways that challenge a leader's hegemony.  They redefine the market — or the market redefines them.

So be mindful of market realignment — whether you are CEO of the Democratic Party or CEO of, Inc.  Don't focus on what people have bought from you in the past, or why.  Focus on what they'll be buying in the future, and why.

9 responses to “The Party's Over?”

  1. Old Cynic says:

    Specter started his political career as a Democrat and switched to the GOP when he was in trouble once before. He's generally thought of in the Western part of the state (PA) as a whore from Philadelphia who has always been for sale. He pretends to be one thing or the other, but fame and center stage is his mistress.

  2. I have no religion about Specter.  I’m just saying that his switch is a sign of things to come since it’s driven by underlying demographic changes.

  3. I expect more trouble for the Republicans before they can sort things out. Like many leading businesses, I think the GOP took their eye off the ball while they were in power while the Democrats methodically chipped away at the their market share. In order to balance the scales, the GOP will need to come together and unify themselves around concrete platforms rather than taking random pot-shots at the other party.

  4. Yes, AND they’re going to have to realize that in a two-party system, you have to be big tent and not 100% ideologically driven.  I was thinking about this more this morning as I was reading this week’s Economist.  It used to be that Democrats pandered to the base during primary season and then stuck to their hardcore positions when governing, and Republicans pandered to the base during primary season and then governed pragmatically from the middle.  Since Clinton, the Democrats have switched; and since Bush junior, the Republicans switched, too.

  5. It says a lot when you come in 3rd place in a two-party system. I think there is some merit to your point about the parties reversing roles. It might help to explain my recent acceptance of the Democratic party in recent years. I thought it was my age and a growing ability to focus on more than just my own issues and problems.

  6. Yeah – they say that most people get more conservative with age.  I think the reverse will start happening more and more with our generation, especially with the Republican party shrinking into oblivion.

  7. i like how you related this to business at the end. anyone who gets too powerful (IBM, Microsoft, now Google) will get taken down by the market forces that align against them

  8. Doug K. says:

    We're even seeing this with Apple and their mocking of the NetBook. Perhaps they will come out with something this time that addresses the challenge but one of these times they won't, and you will see market forces bring them down.

  9. We need to focus on what people will be buying in the future, and why.Don't focus on what people have bought from you in the past, or why. I am total have the same feeling.