On Barriers to Entry: Radio Essay for June 25, 2011

Perhaps you have heard of the term, “barriers to entry.” In economics, it refers to obstacles that make it difficult for another to enter a given market. It could take the form of regulation or economies of scale or global reach. This gives existing firms in a market a decided advantage. At a personal level, it may require special licensing or certification to undertake a given endeavor. Imagine if the government required everyone who shoveled snow for money to undertake a back ergonomics course to protect them from back strain. Few children would be able to shovel out their neighbor’s driveway for a couple of bucks on a snowy day.

Barriers to entry tend to protect incumbents and keep competitors from gaining a foothold. If one can yield some political influence, these barriers can become impenetrable. Free markets become distorted as fewer and fewer firms can compete: oligopolies become duopolies become monopolies.
Picture for a moment our present political scene here in Massachusetts. Did you know that there are 24 political parties registered with the Secretary of State? Sounds like we have a lot of choice, right? Can you name more than 5 parties? Well, there’s Republican and Democrat: that’s two. Independent: no, that’s a state of mind, not a party. Green-Rainbow: they ran an auditor candidate, didn’t they? That’s three. Conservative: four. Liberal: What do you mean there is no liberal party in Massachusetts? Don’t need one, I guess.

Twenty four parties constitute wide choice, perhaps too much choice. Four makes it an oligopoly. At the Federal level, we shrink immediately to a duopoly: the Republicans and the Democrats. Third parties just muck up the mathematics. Without H. Ross Perot, George Herbert Walker Bush likely defeats William Jefferson Clinton and Monica Samille Lewinsky remains an anonymous college graduate with a psychology degree rather than at the center of the impeachment of a President.

So, it’s two parties for the near future. At least that is what the incumbent powers wish you to believe. Remember “barriers to entry?” Picture this. The average Congressional candidate spent $1.6 million in the last election cycle; Senators running for reelection spent $9.1 million. Additionally, elected officials traditionally campaign while serving in their current office! Incumbents have built a levee around their rank and privilege that keeps would be challengers largely at bay. Imagine trying to raise $1.6 million in two years to really fight to win a campaign. That’s $15,000 each and every week, $50 or $100 at a time, with an occasional big donor. It requires special interest vetting or even pandering to pick up a few thousand more. It requires a machine and 100% of a candidate’s time and energy. Frankly, it requires an incumbent in some government position whose electorate is content with part time constituent service.

In short, the duopoly of the three major parties has created a situation that solidifies their situations in quick setting cement. Make it past your first or second election and the barrier to entry is too steep to breach. Play your cards right and you can parlay one job into your next without regard to serving your constituents with any real personal effort. And if it doesn’t work out, you have your existing job to return to.
If the intention of our founders is to be honored in elections to come, the way we view the present duopoly must change. We need another party to offset the excesses of the duopoly without empowering either too greatly. It is less about “finding a middle ground” argument than one of pure reason. There no longer is meaningful choice. Washington is locked into an ideological struggle for power that comes at the expense of the working people of this great country. We are asked to vote for hope and change at every turn from each party but what we get is status quo.

The third party is coming. It may complement the other two or it may supplant one but its’ time is coming and it is urgent that it comes. I know of only one major movement in this country that has the determination to meaningfully work towards this end and that is the Tea Party. Not the Tea Party of the media but the Tea Party of the people: people who have had enough already of the waste, the taxes, the inequity, the deceit and the decline; people who are actively concerned about the fall; people who are ready to rise up again and again for however long it takes to return the promise of America back to all Americans, not just the political class in Washington.

Press on.

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