Are American politics broken? A recent survey of Harvard Business School alumni suggests that the answer may be yes, and that the troubled political environment could be among the most important threats to U.S. competitiveness. When asked about 17 elements of the business environment in a survey on U.S. competitiveness, 60% of alumni said the “effectiveness of the political system” was worse in the United States than in other advanced economies. Only the “complexity of the tax code,” which received poor marks from 61% of those surveyed, was viewed more negatively.
What accounts for their concern? Research on the American political system shows that the Congress now is more divided than ever, pulled apart by two starkly different conceptions of government. Many in the media and in Congress complain that the nation’s politics have become too ideological. Congressman Jeb Hensarling, for instance, the co-chair of the supercommittee set up to trim the budget deficit, has declared that “the committee did not succeed because we could not bridge the gap between two dramatically competing visions of the role government should play in a free society.”
Yet despite much hand-wringing about the ideological divide, it’s not clear that it is the true source of the breakdown. Look closely at U.S. history, and you’ll see that deep philosophical differences aren’t new and that some of the most ideologically charged periods produced important policy advances, often delivering the best ideas from both sides. In fact, America’s economic success may be partly attributable to this best-of-both dynamic.
The real problem with American politics is the growing tendency among politicians to pursue victory above all else—to treat politics as war—which runs counter to basic democratic values and may be crippling Washington’s ability to reach solutions that capture the smartest thinking of both camps. Revitalizing the nation’s culture of democracy is essential. And because the economic stakes are so high, business leaders must play an important role in the process.
A Long History of Rancor
Political campaigns in America have always been a contact sport. During the presidential election of 1800, for example, James Callender, one of Thomas Jefferson’s agents, declared the incumbent president, John Adams, to be a “hideous hermaphroditical character, which has neither the force of a man, nor the gentleness and sensibility of a woman.” Jefferson weathered similar attacks, including one on his religious beliefs, which described him as a person “who makes not even a profession of Christianity; who is without Sabbaths; without the sanctuary, and without so much as a decent external respect for the faith and worship of Christians.”
Although the campaign of 1800 was unusually personal and bitter, extreme partisan attacks resurfaced regularly in elections. Entire books, such as David Mark’s Going Dirty: The Art of Negative Campaigning, have chronicled the no-holds-barred tactics that American politicians used in the past. Indeed, such accounts often make present-day campaigns appear tame by comparison.
What’s different now has less to do with how America’s politicians campaign than how they govern. Voting in Congress is the most polarized it has been in well over a hundred years. Although the voting patterns of members of the two political parties saw some overlap for much of the 20th century—moderate Republicans often voted to the left of the most conservative Democrats—the overlap has all but disappeared.
The political scientists Nolan McCarty, Keith T. Poole, and Howard Rosenthal uncovered this shift by tracking votes cast in Congress. They found that the mean ideological difference between the two parties started rising sharply around 1979 and is now at an all-time high in the House and close to that in the Senate. (See the exhibit “A Divided Congress.”) The evidence is plain to see. Consider that the U.S. Congress passed the laws creating Social Security and Medicare with large bipartisan majorities in 1935 and 1965, respectively, but the Obama Administration’s Patient Protection and Affordable Care Act of 2010 barely squeaked through, without a single Republican voting in favor of it.
A Divided Congress
Unfortunately, there is no consensus on what’s driving this increased polarization. Analysts point to everything from the rising role of money in politics to partisan gerrymandering to changes in the way news is covered in the age of cable television and the internet. But whatever the case, it is probably useless to focus on any single cause at this stage because many factors are now at play, all reinforcing one another. The phenomenon seems to have taken on a life of its own, and it is threatening the nation’s capacity to solve critical problems, from employment to energy to entitlements to education.
What makes this especially distressing is that the ideological divide over the government’s role, seemingly so destructive today, has historically been one of the most constructive features of American political life.
Competition That Spurred Progress
The clash between competing philosophies of government is as old as America itself (it was already visible, for example, in the grand debates between Thomas Jefferson and Alexander Hamilton). There are two archetypal views. One rests on a deep skepticism about government, particularly the federal government—a sense that it is inefficient, invasive, and easily corrupted, and that its involvement in private activity is often corrosive. The other embodies a pragmatic faith in government’s power to serve society—a conviction that it can be harnessed for good and that the public sector, however imperfect, can be deployed to solve problems that individuals and private corporations have trouble solving on their own.
While the rivalry between these two broad philosophies has been vigorous for centuries, it has often proved highly productive. Take the long-standing debate over whether government should be more or less active in the economy. In many cases, the answer policy makers arrived at was not more government or less, but both more and less, targeted in the right ways. In the 1840s, when the politicians most skeptical of government were pushing for fiscal retrenchment and balanced budget provisions in the wake of a financial crisis, those with greater confidence in government were demanding free public schooling, which amounted to a government takeover of primary education. In the end most American states put in place both balanced budget provisions and free public education.
The vigorous rivalry Between the two political philosophies used to be highly productive.
American history is full of such examples of constructive competition. Although Jefferson and Hamilton personified important elements of the two opposing philosophies, both served in the cabinet of President George Washington and were able to put aside their differences and broker deals when necessary, notably in managing the national debt when America’s finances were still shaky. The philosophies often became intertwined in other policy issues—from early broadcast regulation, when the government nationalized the airwaves but left broadcasting almost entirely in private hands, to New Deal financial legislation, which regulated commercial banks with a heavy hand but exerted a relatively lighter touch over the rest of the financial system.
Perhaps the most remarkable example involves the struggle between protectionists and free traders. For much of its early history, the United States promoted the growth of its industries by instituting tariffs and other forms of protection. Unlike other developing countries, however, it usually reduced tariffs after its infant industries had matured. This helped prevent companies from becoming complacent and slow as a result of continued protection. The competition between rival philosophies—especially between the protectionists in the North and free traders in the South—made permanent protection impossible. The rough balance of power ensured a distinctive mix of policies over the long term: not moderate tariffs all the time, but high tariffs during early industrialization and low tariffs in later periods.
The Descent into Take-No-Prisoners Politics
However, the fierce competition between opposing views of government may now be degenerating into something toxic. Policy making in America is approaching all-out war, where victory is paramount, “compromise” is a dirty word, and virtually any issue or development can become a weapon for bludgeoning the other side.
The premium placed on ideological purity and the desire to win at any cost are dangerous trends—almost Leninist in their orientation, according to MIT’s Stephen Van Evera, a distinguished political scientist. In 1924, Victor Chernov, a political rival of Vladimir Lenin, wrote in Foreign Affairs: “Politics to him meant strategy, pure and simple. Victory was the only commandment to observe; the will to rule and to carry through a political program without compromise, that was the only virtue; hesitation, that was the only crime.” For Lenin, he continued, “politics is disguised war [and] the rules of war constitute its principles.”
The focus on political purity and winning at any cost is a dangerous, almost Leninist trend.
This absolutist approach to politics feels disturbingly familiar in America today. The fervor to win too often appears to trump everything else—including respect for opponents, the integrity of institutions, and even the health of the democracy itself. The idea of allowing each side to win part of its agenda is increasingly seen as tantamount to surrender in many quarters.
This dangerous turn in U.S. politics became particularly evident during the debt-ceiling crisis of July 2011, when the federal government came perilously close to defaulting on its obligations. Some politicians even suggested that a government default or shutdown would be less damaging than compromise. “It’s an inconvenience, it would be frustrating to many, many people, and it’s not a great thing,” one Senate candidate warned just before being elected in 2010. “At the same time, it’s not something that we can rule out. It may be absolutely necessary.”
Though the crisis was resolved (for the short term) at the 11th hour, Standard & Poor’s downgraded the U.S. credit rating from AAA to AA+ just days later. Voicing its sense of alarm over the “political brinksmanship of recent months,” the ratings agency explained that “the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened….” To Standard & Poor’s and many others, American politics had radically changed.
Politics and U.S. Competitiveness
Standing Up for Democracy
It’s impossible to know just yet if American politics have truly gone astray. Years from now people may marvel at how the U.S. political system, seemingly at war with itself, managed to carry the nation successfully through a most difficult period. But it’s also possible that they will look back and wonder how the country allowed bad politics to undercut a mighty economy. It seems reasonable, therefore, to start looking for ways to strengthen the political system.
What’s needed is something basic but demanding: a renewed sense of commitment to the health of the democracy—above party, economic interest, and ideology. That’s critical because the competition between opposing views of government seems to prove most fruitful when it takes place in the context of such a shared commitment: Disagreements may be intense, but they are taken only so far—as in a family.
Revitalizing America’s culture of democracy is essential. Everyone has a role to play, but business leaders can take four steps to make a difference:
Speak out for democracy.
CEOs should make it clear at every turn that a vibrant republic is the foundation of a strong economy, and that all Americans—including business leaders—must be careful not to let their zeal for winning overshadow their commitment to the integrity of the political process.
Clarify public priorities.
CEOs should build a bipartisan council on public priorities. The goal should be not merely to split the difference between liberals and conservatives but to help each side articulate its highest priorities, with an eye toward facilitating the implementation of the best of both over time.
Invest in history.
Business leaders should promote a deeper understanding of how American democracy functioned in the past. The effort could involve everything from funding new research on the history of American democracy to sponsoring educational television programs, lecture series, and book clubs.
Stand up for civics.
Business leaders should urge public officials—and the public at large—to restore civics to its rightful place in the classroom. Data show that many schools fail to effectively teach the workings of U.S. democracy or the responsibilities that go with citizenship. Just as America cannot be globally competitive without a well-educated workforce, it cannot retain its economic edge without a well-educated electorate that is ready to meet the relentless challenges of democratic governance.There’s nothing wrong with competing views of government. They have served the United States well in the past. For the competition to prove constructive, however, Americans need to remind themselves that the nation’s progress has been rooted in two great philosophies of government, not one. Putting the health of the democracy first is the surest way to get the best of both.