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Saturday, August 20, 2005

The Politics of Ice Cream

Over on rawstory, John Steinberg offers an intriguing piece of political analysis.

Assume a beach that is 100 yards long. (It wouldn’t be an economics story if you were not asked to assume something, right?) Now assume that there are two ice cream vendors working that beach, and that people are uniformly distributed on that beach. Where should the vendors set up? You might think vendor A should set up at the 25-yard mark and vendor B at the 75-yard mark – that way, no one has to walk more than 25 yards to get their ice cream. But look at it from the standpoint of the vendors. Vendor A could move to the 30-yard line and pick up a little business at the other vendor’s expense, and run no risk that the customers who now have to walk 30 yards would choose instead to walk 75 yards to vendor B’s stand. Vendor B then gets more business by moving to the 65, Vendor A to the 40, and pretty soon the two competitors are cheek by jowl, straddling the center. Voilà – a dysfunctional outcome, courtesy of the free market.

It turns out that this concept is pretty commonly taught (something I didn’t know in those pre-Internet days) – it is formally known as Hotelling’s model, after an economist named Harold Hotelling. And its application to politics is rather obvious.

Think of the spectrum of political views as the beach, and citizens as sunbathers. A politician on the left end of the beach knows that if he moves his offering a few steps to the right, he can pick up some middle-of-the-beach customers without losing the folks to his left.

You now know pretty much everything the Democratic Leadership Council knows about presidential politics. This is how they put Bill Clinton into the White House, it is how they tried to Bubbamatize John Kerry, and it is how they think they are going to win in 2008. But what Karl Rove knows (and the folks running the DLC clearly don’t) is that there is a fatal flaw in this model.

What this simplistic model does not take into account is that, like eating ice cream, voting is optional. And when politicians or ice cream vendors put too much distance between themselves and their customers, the customers stay home.


Or, Steinberg notes, if a party shifts too much to the center, it leaves a space open for a third party to set up shop on its end of the beach.



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