Voting Cartels are Anticompetitive

In 2010, a surge in Tea Party activism helped elect Sen. Marco Rubio (and many other conservatives) to congress.  In June, though, Rubio dealt a huge blow to the very electorate that had supported him, by voting for a bill that would provide a path to citizenship for illegal immigrants.  The bill passed (1).  Tea Party members were furious, calling Rubio a backstabber, a traitor, and the like.  In short, he bit the hand that feeds.  And the Tea Party is promising that, in the event of a 2016 presidential run, Rubio will feel the blowback.  As one prominent Tea Party leader put it: “The most powerful thing we have as a movement is our feet and our vote.” (2)

Sen. Marco Rubio (R-Fla)

As an aside, I think it’s strange that the Tea Party so vehemently opposes immigration.  Don’t libertarians support the free market?  Our labor market has certainly expressed a desire for cheap immigrant labor.  Why hasn’t the Tea Party? Stranger still is that they take a position in the first place.  As I recall, the original partiers dumped their tea into Boston Harbor because it was too heavily taxed, not because it was picked by immigrants (weren’t we the immigrants back then?).  That’s beside the point, though.  I came here to talk about another interesting aspect of this story: the Tea Party’s decision to collectively turn its back on Senator Rubio.

By voting as a unit, the Tea Party carries immense political power.  Rubio might be wise to consider changing his stance on immigration, simply to avoid losing the Tea Party voting bloc.  But is organized, collectivized voting fair?  I hold that such voting is anticompetitive, which adds to the irony of the whole situation, given that competition is a core tenet of the libertarian values system.

Consider an analogous situation: that of labor unions.  As individuals, workers have little bargaining power.  If Robber Baron decides to lower wages from $8.00 per hour to $7.50, and Joe Workman is unhappy with the change, he can threaten to quit, but Robber doesn’t care.  However, if every worker decides that they’re not working for under $8.00, Robber suddenly faces the prospect of losing his entire workforce, and is forced to scrap the wage change.  Thus workers gain bargaining power by acting as a unit.

I believe that unions are unfair, in the same way that monopolies are unfair.  If Apple and Microsoft can’t come together and decide to up the price of their computers, why can workers come together and decide to up the price of their labor?  Both behaviors are anticompetitive.  In the monopoly example, the tech companies win and consumers lose.  In the unions example, the union wins and the company loses.  Now, it’s much more palatable to see companies lose than to see people lose.  But consider that, in the unions case, also losing is everyone in the workforce not in a union.  They’ll have a harder time finding or keeping a job, given that companies have less money to spend on labor.  Also, when companies lose, we’re all hurt in the long run.  How do you think Detroit went bankrupt?  Ford and GM lost market share to non-unionized foreign automakers!  Well, mismanagement may have also been a factor.  In any case, though, both unions and monopolies represent collusion, and shouldn’t be allowed.

So, what about the aforementioned voting cartel?  I think it’s also unfair, even dangerous.  Sure, it’s great for its members; voting together increases the chance of a successful vote. Put it this way: when you decide to vote for Marco Rubio, the chances your vote will matter are astronomically small.  However, when the leader of the Tea Party, through social media or whatever platform, decides to tell everyone to vote for Marco Rubio, the chances that his decision will influence the outcome of the election are high indeed.  In fact, imagine a voting cartel so huge it encompasses the majority of the electorate.  The likelihood that this cartel’s decisions will be decisive is 100 percent!  Of course, it would be difficult to unite such a large population under one ideology, and the risk that its members would defect or split into factions would be high.  Still, though, if such a group could remain cohesive, it would possess complete control of the government, which would be quite dangerous indeed.

This brings me back to my point: while voting cartels are great for its members, they, like any other organization designed to reduce competition, hurt everyone else.  Imagine that, in response to Tea Party pressure, Rubio changes his stance on immigration and fights against amnesty.  He would be taking a stance that he doesn’t believe in, simply because he couldn’t withstand the influence of one powerful voting group.  Of course, pandering for votes is an inevitability, but voting cartels only increase the opportunity to pander.  If everyone votes as an individual, no one opinion is elevated over any other.  However, if people vote as a bloc, the opinion held by that bloc holds a lot of weight, since losing that bloc could be detrimental to reelection prospects.  Voting cartels could gain so much power that politicians have to choose between siding with the cartel and unemployment.

So, should organized voting be illegal?  Well, maybe in theory, but it would be extremely hard to identify and enforce.  If an influential Tea Party leader isn’t allowed to tweet “Vote for Candidate A,” am I barred from posting a Facebook status urging my friends to “Vote for Candidate B?”  It seems that collectivized voting, and the danger that comes with it, is just another problem inherent to democracy.

References:

  1. Senate passes sweeping immigration bill
  2. For some in Tea Party, Rubio is not conservative enough
  3. Marco Rubio Spurned by Original Tea Party Supporters Over Immigration
Advertisements

4 comments on “Voting Cartels are Anticompetitive

  1. Ben says:

    “If Apple and Microsoft can’t come together and decide to up the price of their computers, why can workers come together and decide to up the price of their labor? Both behaviors are anticompetitive.” It’s true that collusion, in both cases, draws us away from the competitive market outcome. We shouldn’t too quickly assume, though, that these market outcomes are social optima! Certain market scenarios could unwittingly tend towards inefficiency.

    That’s not to say, of course, that labor markets must tend towards suboptimum. If they did, though, then one solution could lie in some sort of collectivization. In particular, if business tended towards monopoly and wages tended downwards, unionization might be the solution.

    The “winners” and “losers” you describe are correct. Whether these “redistributions” are on-the-net positive, however, is an empirical question. When the answer happens to be affirmative, a union could be justified.

    I’d disagree that the Tea Party qualifies as a “cartel” in any meaningful sense. Unlike union members, Tea Party affiliates are hardly bound to vote along party lines, and punishment for “scabs” couldn’t extend beyond, at worst, social shaming (provided that the breach were even discovered). More importantly, though, the incentive structure is different. In cartels, the arrangement benefits the members, though members may benefit slightly more by breaking the cartel. It’s a classic prisoner’s dilemma, and it tends towards dissolution. In political parties, the picture is different. A party’s members don’t explicitly benefit from their membership, except by gaining information, and there’s no consistent motive to defect.

    Rather, the Tea Party is an information distribution mechanism. In a seminal paper, political scientist Anthony Downs describes parties as “persuaders” in a world of imperfect information. If information were perfect and complete, voters would vote based on “utility income” alone. Given that information is not perfect, however, party leaders may employ selective information distribution in an attempt to achieve electoral outcomes they consider desirable.

    Many of your claims, though, still remain true, albeit partially. It’s not true that the Tea Party, through collective compulsion, controls the votes of its members. Tea Party leaders still, though, wield much more electoral power than the common man, albeit through influence rather than coercion. This benefits the Tea Party leaders, though perhaps not its members, whose votes are being influenced from without. The Tea Party is surely a powerful collective.

    But are these power imbalances bad? One might argue that our society is better off with voters “informed” by political parties than it is with voters uninformed and apathetic altogether. One could respond, here, that this “information” is no such thing, but more closely resembles selfishly motivated indoctrination. One could respond, yet further, that, in the presence of multiple political parties, competition will leave voters balancedly and appropriately informed. This conclusion too could be disputed, and we quickly reach mounting complexity.

    Perhaps parties are neither good nor bad, but rather not enough. Many have argued that voters (with or without parties) will tend, perhaps even rationally, towards ignorance. We could fix this through systematic education initiatives, or even by discouraging the uninformed from voting.

  2. Richard says:

    Josh says “I believe that unions are unfair, in the same way that monopolies are unfair. If Apple and Microsoft can’t come together and decide to up the price of their computers, why can workers come together and decide to up the price of their labor? Both behaviors are anticompetitive.”

    Unions certainly are anticompetitive, which is exactly the point. Their purpose is to protect workers from the harmful effects of over-exposure to a working environment in which they are less competitive than others. Whom does this threaten? The companies, yes, but, more specifically, those who benefit most from the companies’ profit margins; and these are usually the minority, a small number of individuals.

    Josh also says “… when companies lose, we’re all hurt in the long run. How do you think Detroit went bankrupt? Ford and GM lost market share to non-unionized foreign automakers!” Isn’t the internal tension in this almost creaming at us? If foreign automakers profited, then they are companies who benefited, while some (not ‘all’) were hurt. The fact that other companies (Ford and GM) lost out in this need not be blamed on the presence of unionization so much as the lack of it in the foreign companies! Only in an environment of predatory free-marketers is unionization likely to result in job loss. Blame the predators, I say.

    On a dominant voting cartel in government Josh says, “… if such a group could remain cohesive, it would possess complete control of the government, which would be quite dangerous indeed.” Now, let’s think. When there is more than one interested party with respect to some outcome in society, a monopoly on that outcome would be unfair. The exact same considerations should, by parity of reasoning, lead us to say that when there are more than two interested parties with respect to some outcome in society, a duopoly on that outcome would be unfair. But just look at US politics. It is a duopoly. It is bipartisanship run wild. And, I agree with Josh, it is dangerous and has proven itself to be so.

    Josh continues: “This brings me back to my point: while voting cartels are great for its members, they, like any other organization designed to reduce competition, hurt everyone else.” This is simply false, as stated, and some of Ben’s comments go towards showing this. If there is no coercion in the voting cartel (and deceitful persuasion is, in my view, a form of coercion), then there need be nobody hurt by a voting cartel. In fact, a cartel sounds like it might just be an environment in which people who think they have similar values and goals can decide how best to achieve their desired outcomes through voting. BUT that’s definitive of democracy! If there were only one such voting cartel, then it might work out that its eventual collective policy is something which is decided by the members in an intra-cartel vote, prior to elections. But imagine if that initial intra-collective vote were itself just the election vote. In such a scenario, with only one ‘cartel’, the initial voting among members would be tantamount to direct democracy – what more could one wish for? Something like this existed in ancient Athens, and aside from those who were denied the vote and had little education opportunities prior to voting, it worked pretty well. So, when Josh says “collectivized voting, and the danger that comes with it, is just another problem inherent to democracy” I think he’s relying on a crude conception of a voting cartel according to which its members are coerced into how they vote. They need not be, and if they’re not, then a voting cartel is just plain ol’ democracy. The only problem is that direct democracy is almost practically impossible given the ingrained traditions which prevent it from emerging. The size of the state and population is also relevant. Athens was a mere city, maybe that’s why direct democracy could flourish there.

    • Josh says:

      I agree that unions fight back against unfair labor practices. However, I’d rather see unfair labor practices quashed with laws targeting unfair labor practices than with unions. The latter fights fire with fire, and unions can become too powerful, to the point where business is hurt.

      You say that hurting business hurts only a very few people; those who benefit from high profit margins. I would disagree with this. I think most everyone who works for a company benefits from that work. Everyone who works at Google, for example, benefits from being employed. They’re not slaves, after all; they’re working voluntarily. So, if workers employed by Google’s chipmaker unionize, and then Google has to pay more for chips, then it has to pay less to each salaried employee. So, every worker at Google loses, not just the CEO. Of course, lots of CEOs make ridiculous and obscene amounts of money, and I in no way would object to seeing those salaries dropped. But it would be naive to say that companies have infinitely deep pockets, and that costs can rise as much as that want, where rising costs are simply offset by decreasing executive pay.

      There need not be coercion in a cartel for it to remain cohesive and be damaging, provided that members of that cartel are participating in a “multi-turn game”. This is elaborated much more extensively in this post. I think this will touch on a lot of the points you have made.

      • Ben says:

        “So, if workers employed by Google’s chipmaker unionize, and then Google has to pay more for chips, then it has to pay less to each salaried employee. So, every worker at Google loses, not just the CEO.”

        Not to mention every consumer of computers in the world, who now has to pay higher prices.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s