Path Dependency and the Republican Party

Let’s apply path dependency to the plight of the national Republican Party and see where it takes us:

Writing in Fortune in the run-up to the 1962 congressional elections, Max Ways asked, “Is Republicanism a Losing Cause?” Arguing at the height of JFK’s popularity that there was nothing wrong with the party’s two main convictions, namely that individual liberty is best served by a strong, yet limited, federal government, and that “market capitalism is a beneficent force in the world,” Ways insisted that Republicans would never “reinvigorate their party so long as they let the Democrats set the terms of battle.”

After a drubbing in the 1964 election, the party was able to set the terms of battle as America’s cities burned and the war in Vietnam headlined the evening news. In Ronald Reagan, the party’s reinvigoration was complete. His ability to communicate the party’s convictions and win elections suggested that Republican dominance of the White House might be sustained. It wasn’t. But even in the aftermath of defeat, in 1992, the party could take solace in Bill Clinton’s declaration that the era of Big Government was over. Perhaps the party had truly won the battle of ideas.

But now the Republican Party has come full circle, and is again in crisis, having suffered defeat in the popular vote in five of the past six presidential elections. As was the case in 1962, there is no end to prescriptions for saving the GOP. To the accumulating heap of advice, I add this to the pile: Consider path dependency before formulating policy, conducting politics, and making appeals to voters.

California’s Republican Governor Arnold Schwarzenegger famously promised to “blow up” the boxes of a bloated government in Sacramento—and then not much happened. At the national level, Republicans have been promising to repeal, dissolve, and defund laws, agencies, and programs since the 1930s, with little overall success, notwithstanding the odd victory here and there. The yearning to begin anew may be alluring, but there ain’t no going back.

In rhetoric, Republican Party leaders still call for ratcheting back Leviathan, at least on the economic front. Yet, just as Governor Schwarzenegger did, they falter when it comes to actually blowing up the boxes of government. Republicans make poor revolutionaries. At the same time, they seem to have eschewed democratic politics as a means to their ends. Perhaps, in their view, playing politics would constitute an exercise in making “socialism” more efficient, in which they allegedly hold no interest. But by failing to reconcile ideas and ideals with path dependent history, the party is becoming ever more out of touch.

Gaining an appreciation for path dependency may help the party connect with voters: a prerequisite to articulating effectively a vision of a political economy based on individual liberty, limited government, and market capitalism. After all, if no one is listening, it doesn’t really matter what you might be saying.

Another problem: It’s rather difficult to figure out what the Republican Party stands for these days. Since the 1980s, its calls for racheting back Big Government have been long on promising a return to some ideal state and short on mapping a pragmatic path toward reining in the actually existing state. Interestingly, the rhetoric heats up when the party is out of power, casting doubt on the sincerity of those spouting it. When they have occupied the Oval Office, Republicans have had no less a penchant increasing the size and scope of government than the Democrats they accuse of being enthusiasts for socialism. The Bush administration used the crisis of 9/11 to increase government surveillance of private citizens and expand Washington’s interventions overseas. The crisis of the Great Recession served as occasion to bail out Wall Street. Indeed, in economic terms, Republicanism has come full circle, not from the free soil, free labor, and free men days of Lincoln, but from the Gilded Age. Where the rubber hits the road, that is, in terms of implementation, there is little evidence that the Republican Party holds individual liberty, limited government, and market capitalism as core convictions. But let’s stipulate, for the sake of this post, that Republicanism at its core remains grounded in the two main convictions identified by Mr. Ways.

So how might a consideration of path dependency help to right the listing Republican ship?

In a previous post, I applauded Daron Acemoglu and James A. Robinson for their effective deployment of path dependency in Why Nations Fail: The Origins of Power, Prosperity, and PovertyThey showed that “critical junctures” that disrupt the existing political and economic balance in society launch nations down their respective dependent paths. And once embarked on a dependent path, the weight of history makes it extremely difficult for a nation to change course.

In America, as Robert Higgs has shown, two world wars, with a great depression sandwiched in between, constituted the critical junctures—or critical episodes, as he calls them—that resulted in an immense expansion in the scale and scope of the U.S. government. With the passage of time, the American people have accepted most aspects of Leviathan—especially when it comes to social insurance—as the norm. In Higg’s view, there is no going back because the federal government’s responses to successive crises engendered a sea shift in ideology among the people. Writing in 1987, Higgs doubted that the Reagan Revolution would live up to its billing. And he was spot on.

For an intraparty conversation on the appropriate scale and scope of government to be productive and persuasive, it ought to begin with coming to terms with the state as it “really is” and reflecting on how it came to be (including the many contributions of all postwar Republican administrations to expanding said state).

Take Social Security. Opposed on the Right, it was passed in a form that didn’t please the Left. But over the years, Social Security expanded in scope and size under Democratic and Republican administrations alike. It’s now been around for more than 75 years. Talk of entitlement reform as Baby Boomers age, at least in terms of assessing, funding, and perhaps adjusting future liabilities? Absolutely. But apocalyptic talk of Social Security’s impending bankruptcy as prelude to overhauling this mainstay of middle-class entitlements surely has lost more votes than it has gained. And to what end? Leaving aside the question of individual liberty, replacing mandated contributions to a government plan with mandated contributions to private ones introduces risk for which future retirees seemingly have no appetite. Path dependency does not mean that all doors to reform are shut for all time. But Republicans have little hope of blowing up this box.

So, what to do? First, acquire a deep appreciation for the path dependencies embedded in America’s laws, regulations, policies, and political institutions. Use the exercise to identify potentially winning issues that align with core convictions, as stipulated. Then embrace the democratic process as a platform from which to win hearts and minds and accomplish realistic goals.

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