'Politics as Markets' Reconsidered: Natural Monopolies, Competitive Democratic Philosophy and Primary Ballot Access in American Elections

Abstract

Over the past decade, mainstream election law scholarship has been based largely on a simple but forceful set of analogies: politics are like markets, parties are like competing firms and voters are like consumers that decide at election-time which party's public policies they would like to buy. Proponents of this theory have been criticized for taking the analogy between markets and politics too far and for relying too heavily on one method - electoral competition - to solve all the problems of American democracy. However, the true problems of the "politics as markets" theory lie at the inverse of these criticisms. Our understanding of markets can explain a great deal about electoral behavior, but scholars have failed to apply the lessons of economic theory to the central fact of American politics: the existence of a two-party system. Economists have developed a long literature explaining how to regulate markets that, as a result of extreme economies of scale, trend toward having only a few participants (known as the problem of natural monopoly). These ideas - which permit a natural monopolist (or, in the case of elections, a natural duopoly) to become entrenched but regulate its pricing behavior, and deregulate downstream markets that are not naturally monopolistic - should be the basis for any analysis of American elections based on a market metaphor.

Moreover, competition is not too narrow a concept on which to base the regulation of elections, but rather too broad. There are a number of conflicting normative justifications for using competition as a guide for electoral regulation, each of which suggests different policy outcomes. Specifically, electoral competition can promote the ends of representative government or decisive electoral results, but policies that enhance one of these often harm the other. Rather than assume away the benefits of either representation or decisive outcomes, as much of "politics as markets" scholarship does, judges should balance these ends when determining the constitutionality of state regulation of electoral competition.

The Supreme Court has created one line of cases that does not suffer from these flaws. Its holdings in primary ballot access cases like Timmons v. Twin Cities Area New Party, California Democratic Party v. Jones and Clingman v. Beaver, much pilloried by "politics as markets" scholars, are in fact consistent with the application of economic theory to electoral markets and feature a balanced approach to the conflicting normative justifications for favoring competition. This paper stands as a defense of the Court's approach to resolving the constitutional law of primary ballot access as a matter of economic theory and competitive democratic theory.

Keywords: Law and Democracy, elections, Schumpeter, economic theory, natural monopoly, natural duopoly, Timmons v. Twin Cities Area New Party, California Democratic Party v. Jones, Clingman v. Beaver, Two-party system