Why the political duopoly is losing market-share

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Opinion Why the political duopoly is losing market-share

If you hadn’t noticed, economic policy and politics are closely entwined. And economic journalism is a just specialty within political journalism. But some parts of economics – agency theory and industrial organisation, for instance – are surprisingly useful in understanding how politics works.

In real life, many markets are characterised by “oligopoly” – they’re dominated by a small number of large firms. Many decades of firms pursuing economies of scale do a lot to explain why we see so many oligopolistic markets.In the sub-discipline of “industrial organisation”, economists seek to explain why oligopolistic markets differ from that basic model of “perfect competition”. They’ve found that the few big firms are not so much competitors as rivals.

This, of course, reduces the choice available to customers. So, does it surprise you that, as the two sides of politics become more similar – as they crowd around the political centre – more people set up fringe parties, and more people vote for them? “So, does it surprise you that, as the two sides of politics become more similar – as they crowd around the political centre – more people set up fringe parties, and more people vote for them?”

The more professional politicians become, the more they focus on advancing in the political game, and less on the things they got into politics to fix. They used to have to guess at what the voters wanted; now the majors spend a fortune on polling and focus groups. They’re more inclined to give the voters what they now know they want, and tell them what they know they want to hear.

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Is it because the both suck?

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Why the political duopoly is losing market-shareGiven the strong links between economics and politics, does it surprise anyone that as the two sides of politics - the “duopoly” of Labor and the Coalition - become more similar more people set up fringe parties, and more people vote for them? 1RossGittins Because we don't have proper common sense, left call it far right, political force. Party which would build power stations, close borders, took care of Aboriginals, not by a paring more money on them but by eliminating crime. We have Labor left, and Lib/Nat light left.
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