Can Political Innovation Break Partisan Gridlock and Save Our Democracy?



thank you so much for coming Michael and I are both really thrilled to be here I want to start with a quick story about my daughter a few years ago when she was 9 years old I had her captive in the car and I said hey honey did you know that our national debt is 19 trillion dollars she loves being in the car with me and she said you know really and I said yes and guess who's gonna have to pay that back she's a little concerned you oh no honey that's not how it works you you're gonna have to pay that back so now she's quite horrified and says me what did I ever do so as you can tell from the conversations that I force upon my children in the car I care deeply about our political system and that is what has brought me to be with you today there is so much talk about our divided country that I want to begin with a statement on which virtually everybody does have agreement Washington is broken we say it all the time but as my good friend current vice president here at Aspen Institute and also a former congressman Mickey Edwards originally explained Washington is broken represents a fundamental misunderstanding of the problem in fact it turns out that Washington is doing exactly what it's designed to do so the rational question is how can it be so perfectly designed and yet delivers such dismal results and the answer is that is simply not designed for us the citizens the public interest in reality today's system has been designed and continuously fine-tuned over decades by and for the benefit of to private gain seeking organizations these are our two political parties and their industry allies which together comprise what we call the political industrial complex and essentially the needs of the political industrial complex simply don't align in general with the true needs of the country so that structure that design of our system creates a huge problem which I'd like to illustrate with a Venn diagram currently there is no intersection no connection between our elected representatives acting in the public interest and the likelihood of their getting reelected so in other words if America's elected representatives do their jobs the way we need them to they're likely to lose those jobs and that's a crazy design but fortunately it's also optional we can change the design and the solutions to do that are what today's discussion is about so in 2016 I asked Michael Porter to join me on a new approach to fixing our politics using the tools of competition an industry analysis that have been for decades the gold standard in understanding competition in for-profit industries and these tools were originally developed by Michael using these tools to look at politics sheds new light on our problems because politics in America has become a major industry and it functions similarly to other industries our political problems are not due to a single cause but rather to a failure of the nature of political competition that's been created this is a systems problem the purpose of our work is very simple we wanted to figure out precisely what it would take to change the system powerfully enough to change the results that the system regularly delivers and it turns out the most powerful results the most powerful solutions center around the very foundation of our democracy how we vote the political innovations that we will recommend to you today will break partisan gridlock and drive accountability for Solutions for the country please know that when we both talk today it's certainly about politics but it's not political Michel is the Massachusetts Republican I used to be a Democrat now I'm a politically homeless centrist independent and the problem is not Democrats or Republicans or even the existence of parties per se the problem is not individual politicians the problem is indeed the system first Michaels going to review what's at stake and then I'll be back up to talk about how it's all screwed up and who's to blame but most importantly how to fix it Michael well thank you Katherine and thank you all for being here and and we truly hope that this doesn't cast a cloud over the rest of your day but this is something that has enormous impact on our country and our society and so let's talk a little bit about that and how we came to understand this so as many of you know I'm a strategy professor I work on competition and strategy I also work with countries and States on economic development and social development and as a result of that background I began in 2010 to co-chair a multi-year project at Harvard Business School which we called the u.s. competitiveness project and the reason we did this was we were seeing really disturbing economic performance in America that that started well before the Great Recession back in the late 1890s and 1990 and we wanted to really dig in and see what was going on here because these were long-term trends that broke for the in the wrong direction now as a policy guy politics was the last thing I swear to you the last thing I ever thought I would work on but that all changed that all changed because of Katherine who helped me understand just how much is at stake here and it's hard to overestimate that now if you look at some of the data that we collected this is a classic HVS two-by-two matrix this is based on the survey of all of our HBS alumni from all over the country in many different industries and it's also vetted by looking at all the actual hard data that exists so what we see here is that in the upper right hand corner America has amazing strengths strengths and entrepreneurship strengths and innovation and others you see great universities and fortunately we have those strengths those are precious those are very unique in the world but what we also see is in the lower left-hand quadrant we see some alarming weaknesses things like inadequate worker skills things like poor infrastructure things like very complicated regulation that's costly to deal with high cost legal system high cost health care system and more and these weaknesses have been leading to rising inequality among our citizens to not Americans too many Americans not actually earning an average or a living wage and we also and this is not well known we also are at today a 40-year low 44 zero year low in the proportion of Americans of working age that are actually engaged in the economy this is called workforce participation our best estimate actually is that true unemployment the real-live number from a human point of view it's actually still over 10 percent it's not the 3 percent you hear because that way they calculate the 3 percent really leaves out a lot of the most important impacted citizens in the economy so if you if you look at at this chart what you see is if you look at the good part of it the upper right and you ask yourself who's responsible for those things in the upper right what do we see well the answer is private sector these are all things that the private sector does if you look down below and particularly to the left and you see and you see well whose response for all those things well I think unfortunately the answer is government these are the responsibilities of government and these things that government is responsible for have only been getting worse and you also see that box down there we asked our alumni what was the most single most concerning economic problem facing the United States and they answered overwhelmingly our political system I was surprised by this I I'm a competitiveness guy I was really focusing on on on the core economic competition and not so much seeing the big picture as a result of this analysis we put forward what we called an eight-point plan of the most pressing areas where the federal government in America needed to fix things and with many took many trips to Washington talking with members of Congress about the diagnosis and about what we need to do and you know what every single member we talked to agreed with both they agreed with what was going wrong and they agreed with what we needed to do but the surprising thing is that nothing has gotten done on any of those areas and we look back for decades we have not made any real progress on any of the key economic problems our economy faces and we haven't made progress in decades this is not a new thing this is a sustained thing now this may sound bad enough and it is but it actually gets worse because economics is only half the government's job we need to make progress on social performance things like health things like you know opportunity all kinds of social dimensions that are not crucial just in of themselves but they're also crucial for economic performance if we don't keep making progress on the social side we're gonna run out of steam on the economic side and that is as we'll see in a minute what's been going on most of us think of this country as a leader in social performance we invented many critical social policies like universal public education made in America invented in America but but historically as we thought so well about ourselves there's been no way of really measuring how well we're doing on social performance which is ultimately one of the key things government's supposed to deliver so I led another project called the social Progress Index where we put together finally the data objective data that allowed us to first for the first time benchmark across many many countries in terms of how we were doing on social progress and so let's take a look at at what we found there we go what this chart does is it compares America to the OECD countries these are the 36 other higher income countries that are really our peers in the economy and if you look at this chart at least I was very very surprised as a pioneer in almost everything on this chart America is now sunk to the bottom of the OECD countries yet we're number 35 in secondary school enrollment 35 in the world we are a 34th in the homicide rate this is a very dangerous place we're 28th in discrimination and violence against minorities and other measures of poor inclusion we're 33rd and 35th in child mortality and maternal mortality does this sound like the United States of America when with our technology with our expertise with our leadership this level of performance and by the way there's many other problems in health care in gun violence in having safe water and having a reasonable immigration policy and many many others and what we've discovered through this work is our social performance is actually declining in this country and this is really the root cause of inequality because poor social performance leads to poor opportunity and and many of the other economic problems we face today we can now actually measure objectively how our government is doing and the answer is not good what matters here is not political drama it's not who said what to who it's the results are we delivering the results that the nation and the citizens need and the answer is no our government is failing it's no longer moving this country forward in the ways that we expected to and we know what we need to do we truly do we just can't do it why not what's wrong and here's where I made a fundamental misunderstanding or had a fundamental misunderstanding is I approach this question as a policy scholar I thought we had a policy problem when this wouldn't assault work all started I thought it was you know we have the wrong policy well not really the next thing I thought was oh we have a politician problem the wrong people are in office but what Katherine helped me understand and what I think we now have great clarity on is the problem is not neither of those things the problem is we have a problem with our political system it's not designed to deliver the solutions we need and Katherine has also had this incredible idea that said we could look at politics as an industry it's a big industry now massive amounts of money involved and if we analyze the way the parties are competing on what and for whom that would give us an insight into what are the root causes of all this which have been creeping on us for now several decades so I joined her work in 2016 and have been truly obsessed with this ever since I forgotten I was an economist now I am now political scientist and the question is the reason why is if we can't change the trajectory of the results our government is achieving our performance as a nation is going to suffer badly and the division in our society is only going to get worse so let me turn it over to Kathryn and ask her to discuss why is this happening we've given you a little taste of it but there's a lot more to understand Kathryn thank you Michael okay so we're gonna go back to Washington is broken as I said that's not actually the case Washington's working exactly how it's designed to work and it's designed by and for the benefit of the duopoly the two sides of the political industrial complex not for citizens not for voters not for the public interest so with just a peek under the proverbial hood we can see that the political system actually works much differently than most of us have assumed so I'm gonna give you two quick real-life examples think back to 2009 Joe Biden becomes vice president and everybody in Delaware I'm told knew who was gonna be their next senator to take his seat from the state of Delaware and that was a gentleman named Mike castle most popular politician in the state multiple term congressman multiple term governor and he was slated to win Mike Castle ran in his Republican primary and he lost now this was very shocking but theoretically not insurmountable because after all that's just the primary so Mike castle could put his name on the ballot as an independent in November when more people turn out and he would win because he's the most popular guy of course we have never heard of Senator Mike Castle and the reason for that is that Delaware has a rather odd law and it's called the sore-loser law and what that says is if you run in your party's primary democrat or republican and you lose you are not permitted to have your name on the general election ballot in November regardless of what the citizens want so a rational question is how many states how many states have a crazy on Democratic law like this one and the answer is 44 and we're sitting in one today remember when Connecticut Senator Joe Lieberman lost his 2006 primary but then he ran as an independent in the general election and won proving that that's who the voters of Connecticut wanted for their senator the only reason Joe Lieberman could do that is because Connecticut was one of them only four states without a sore loser law there's a few other things that we should all become aware of about partisan primaries they may be publicly funded but if you think about it they're actually selection processes for the standard bearer for private partisan organizations and primaries are the reason why so many of us show up at the general election and think I really don't love the choices that I have because most elections are really decided in the primary especially in gerrymandered districts and voters who turn out for partisan primaries tend to be more ideological than voters as a whole and therefore candidates go further to the right and the left then voters as a whole really want but even more alarming then the part is that the partisan primary influence extends into actually governing passing or not legislation so imagine yourself for a moment as a politician it's not just what you have to say to get elected it's that now you've been elected and you have an opportunity in Washington DC to sign to vote YES on a bipartisan compromise piece of legislation on one of the biggest problems that Michael just discussed that we're facing as a country the questions that you must ask yourself are they is this a good idea is this the right thing for the country is this what the majority of my constituents want it's none of those the question you have to ask is will I make it back through my partisan primary if I vote for this and if the answer to that question is no and on the difficult issues it almost always is then the wrath then the answers to all the previous questions are virtually wholly irrelevant because the rational incentive to get reelected dictates that you vote no now occasionally principle might win the day and you decide to vote yes anyway and then what happens you will likely be threatened with a primary you may have noticed that primary has ceased to be just a noun it is now a verb as in we're going to primary you and what that means if you're a Republican is we're gonna run someone further to your right and take you out if you're a Democrat it means we're going to run someone further to your left and take you out never has it meant that we are going to run in more rational consensus problem-solving oriented candidate to the middle and partisan primaries combined with partisan gerrymandering are two key tools that the duopoly uses to control the political process and it effectively forces our elected officials both right and left and this makes it very difficult to govern so we can start to understand why so little gets done in Washington DC now I want to consider a second example of a partisan system and this is an example from governing not from elections but actually legislating because we see that the duopoly also perverts governance by controlling the legislative machinery that's our term for the norms and practices and rules of how laws actually get made the Hastert rule for example is a particularly egregious example of party control taking precedence over the Legislature's ability to work collectively even when constituents want it so let me describe it for you the Hastert rule is a well accepted practice of all speakers of the House Republicans and Democrats and what it says is that the speaker will not allow a floor vote on a piece of legislation unless um geordie of the majority party which is to say the speaker's party supports that legislation even if a majority of the entire house would vote to pass it so unless speakers ignore this practice which they do from time to time but rarely legislation supported by a majority of the country very often has no chance of passing because there's never even going to be a vote in our democracy so let's consider for example the 2013 government shutdown this shutdown could have been entirely averted or ended earlier if then Speaker John Boehner had allowed a floor vote on legislation that was already passed by the Senate and was supported from day one by a majority of the house which is to say virtually all the Democrats plus a minority of Republicans and in fact the shutdown ended only when speaker Hastert broke with his party and broked a Speaker Boehner thank you Speaker Boehner broke with his party and broke the Hastert rule to allow the vote so effectively this completely made-up rule cements majority party control in a legislature that is supposed to represent all US citizens and in this particular case it cost the country twenty four billion dollars for 16 days shutdown that 90% of Americans didn't support from the start so think about it for a moment in the context of your own organizations if you wanted to solve your biggest problems I suspect one thing you might not do is bring everybody together in a room like this and then say hold on just a minute before we get started I want to count off by twos and then we'll divide into warring teams and get straight to work but effectively that is Washington DC every single day our founders warned against political parties to a man John Adams said there is nothing which I dread so much as a division of the Republic into two great parties each arranged under its leader and concerting measures in opposition to each other clearly politics doesn't work exactly how Schoolhouse Rock once taught me that it did I recruited some laughing people over here but they are not doing their jobs you got to wake up okay my daughter this this next one's better my daughter has a favorite joke I promised I'd share it with you if Khan is the opposite of Pro then isn't Congress the opposite of progress she's funnier than I am in the duopoly the players advance their own interests instead of the public interest and what's unique about the politics industry is compared to every other industry is that there's no independent regulation the actors in the industry are the ones that themselves make and police the rules of the game many of us think that the rules of the game are actually set in the Constitution but that's not true it turns out that the rules most of the rules that govern the incentives that drive day-to-day behavior are set by and for the political industrial complex and for their benefit for example you've all heard of the pocket Constitution and here is mine in this powerful but small document there are six tiny paragraphs dictating how the House and the Senate should work and this is the House Rules book this is 1500 pages of legislative machinery it is well I know without reading and I admit even on all the research I have not read it what's not in here is best practices of problem solving what we have is a book about how to divide up the spoils of power this is a book that in trenches partisanship in legislating a book made up to serve partisans not to solve problems and I think it gives new meaning to government over-regulation if I didn't want to waste more paper I would pile on top of here an identical column making up the Senate rules book and I'll just leave that here so we can get some inspiration from it as is always the case in life the rules of the game affect the way the game is played and the net result of the rules of the game operating today in politics is unhealthy competition unhealthy competition in elections and unhealthy competition in the process of legislating and the result of unhealthy competition in every industry is that customers are not well served so thus the actors in the political system are thriving and yet the American public has never been more dissatisfied just last fall a new Gallup poll came out and 61% of Americans think a new major third party is needed and the percentage of Americans self-identified as independents is at an all-time high as of last July 43 percent independence and this compares with 29 percent identifying as Democrats 25 percent Republicans in any other industry this large this thriving for the players in the industry with this much customer dissatisfaction some entrepreneur I always say someone from Kellogg Business School where I went Michael kind of thinks it's HBS but nonetheless some entrepreneur would see this as a phenomenal business opportunity and they would create a new competitor responding to what customers want but that doesn't happen in politics because as Michael's going to show you in a moment the Indus the duopoly works very well together in one particular way and that is to rig the rules of the game to protect themselves jointly from new competition they erect huge barriers to entry put another way politics isn't broken it's fixed this looks like a promising antitrust case but you won't now be surprised to know that ever so conveniently antitrust legislation doesn't apply to the politics industry and troublingly there's no accountability for this and there's no accountability because the customer only has two choices the only thing that either side has to do to win is to convince the average voter to choose them as the lesser of two evils or because at least they say therefore what that voter believes but what the parties don't have to do in this duopoly is to deliver results because no matter how disappointed you are you still likely prefer what your side says therefore than what the one other side says therefore so therefore instead of results in the public interest we get gridlock this chart shows the percentage of salient issues meaning the big stuff that's gridlocked in Congress and we see a relentless increase from 1947 to today leading to the high-water mark of 74% of issues gridlocked in 2014 and when we do get something done it's partisan so here we see a striking implication of the industry structure landmark legislation used to pass with bipartisan support so see the combination of red and blue votes starting at the left for Social Security highways civil rights Medicare welfare reform but today important legislation is only passed on partisan lines so you'll see all blue for health care and dodd-frank and all red for tax cuts and when the other party retakes power they focused not on improving but on repealing this happens in part because there simply aren't enough moderates left to bridge the gaps between the two sides this slide shows the decline in moderates over time on both Republican and Democrat sides and everyone knows it's broken look here at the dramatic decline in public trust from 1958 to 2017 now if the competition the politics industry were healthy industry actors would be competing to serve to advance the public interest and they would be held accountable for that but as we've just illuminated they aren't why not let's use the tools under Michaels guidance to understand the industry structure Michael well thank you Katherine and now let's go back to really the core of what the competition that's going on here that isn't delivering what we need why is that why isn't it serving the public interest and to understand that we have to realize that we can look at this competition between Democrats and Republicans just hoping look at any competition in any industry it's the same basic ideas now hopefully a few or many of you in this room have been exposed to the what's called the five forces framework anybody in Business School probably was forced to learn that which I'm grateful for which provides a holistic way of looking at an industry and looking at the kind of structure that will then drive the nature of competition in that industry and and this is kind of a slide that kind of describes just what those five forces look like in politics at the core of any industry competition is the rivals Coke versus Pepsi in the politics industry as Kathryn has said the rivalry is between our two dominant political parties the Republicans are the Democrats and they are fighting it out they're competing to win elections and they're competing to get their way in governing to pass the kind of policies they like okay so there's this fierce competition between these these two rivals which is really at the core of this industry we see though that the the rivals the parties are really surrounded by a number of other actors that are also having an influence on the nature of competition and also the ability to sustain their dominance in the industry and and this this set of actors that you see here is what really are the political industrial complex it's it's the suppliers it's well it starts with the customers customers are us in this industry but as we'll see not all customers are equally important to the parties like all smart business people they choose the customers they're going to target they're not just competing for everybody the parties reach us citizens through various channels of getting their word across getting their ideas across and you see the channels there's the direct engagement what's called the ground game there's advertising there's independent media there's social media there's a variety of channels that that are used to communicate with us and and we'll talk about that a little bit in in in a bit because they are and the shifts in those channels have shifted the nature of competition unfortunately not in a powerful way like in every industry the parties depend on suppliers of the critical technology and talent and data that they need to compete and you see the key suppliers there I mean it starts with candidates but then there's the campaign Talent so today in this system today you will see a very odd situation with respect to the supplier relationship with the parties I'll talk about that in a minute a crucial aspect of every industry that Catherine's already mentioned is what are the barriers to entry of new competition that would do it in a different way in politics a new competitor would be a new party and they all kind of know that we've never heard of any of the new parties after a year or two they all go away and then the final part of industry structure is what we call here substitutes these are disruptors these are new competitors that figure out that they should compete in a different way then the incumbents are competing like uber versus the taxi industry that's a disrupter and in politics disrupter or a substitute could be for example independent candidates running without their problem without a party at all and as we see a lot of Americans identify themselves as independents so why can't a large majority of Americans actually elect any independence that becomes a very very important question to understand so let's use this lens to understand the root causes of dysfunctional unhealthy competition polarization it's all about this pole versus that pole never the middle gridlock we don't get much done and finally lack of solutions we don't move the ball forward how does that emerge from this industry structure and let me just highlight a few of the critical dimensions here the first critical dimension is there's only two competitors and they dominate the industry and that has a lot a big effect on how these organizations set their strategy it also has a very profound effect on something Catherine mentioned a minute ago and that is their willingness to cooperate there's only two of them and they cooperate in many areas at the same time as they're competing fiercely as we've described the second key idea here that we all have to understand and it's very depressing the core customers of the parties are not the average voter that's not who they're trying to reach in any business the savvy competitors try to identify the most profitable customers the prosper the customers that will deliver the most benefit if we can win them over and in this industry the parties the parties are really going after the core customer group which consists of really two two segments of the industry one is the partisan primary voter now we all know that partisan primary voters are more ideological they're more partisan so those are one of the core core segments in which the parties are trying to deliver and the other core segment of customers is special interest and there's lots of special interests out there of many types that are aligned with a particular party's ideology so some interest groups are aligned with the left some interest groups are aligned with the right and what parties have done is they divided the voters that they care about into these two mutually exclusive groups and that's the way they think about how to compete and what customers they really want to serve and that means that the who's left not in those two core groups the average of the average voter the you know nonpartisan voter is stuck with only these two very extreme choices and Catherines explain why with only two and if they're two so different it's very hard to switching doesn't happen and so the duopoly doesn't need to deliver results in order to win elections I mean if you look at the slides I showed you earlier our government is delivered pretty much nothing for decades except highly partisan stuff that ultimately has been attacked and and you know focused to efforts to repeal why do we have the same parties competing in the same way well the answer is that because the choices are very extreme in fact nobody switches very few switch because the because of that extremity that Katharine described now to get even more problematic here what are the parties actually compete on and the answer is they don't compete on solving problems they compete on advancing their ideology whatever that is now what do we know about ideology and and I hope it I'm not gonna offend anybody here well we know about ideology is this a cartoon of the world it's not real it's too simple we know that almost every important issue to resolve that issue we have to take into account multiple points of view of multiple types of people that cuts across ideology we've got a it's it's this complex compromise and integration and an insight into how to put together a package of things that actually will work that is critical to government working effectively but what the parties do instead is they sort of create a false choice a good example will be free trade which is more right and protectionism which is more on the left we got to protect ourselves okay now the parties will tell you those are two choices and the answer is neither of them is a real choice they're all more complicated the real trade policy that we need is some complicated mixture of the two that reflects the reality of how the international economy works and so forth and so on this is one of many false choices the parties give us false choices between this and that that aren't real choices the answer is somewhere in a more complicated Center and and what the parties have also done is we if we're not on their side they call us the enemy not just a citizen of America that has relevant and appropriate interests that ought to be served as well that's not the way the competition works now the partisan competition is amplified not only by this kind of strategy that the parties used but also by the kind of connection the parties have built with the suppliers and the channels what we see is that the parties actually control their suppliers so you're either a democrat campaign manager or public and campaign manager you can't switch or you're done your career is over the same is true in in many of the other supplier the voter data company is either left or right and so forth and the channels are are connected the media have now divided so that there's this media for this group and this media for this group and they don't switch and what this means is the parties get even more power and control and even more incentive for partisan ships by this structure that's been put in place also and we're kind of starting to kind of get to the end of understanding this complicated game despite the failure of delivering good for the citizens for the public even all the dissatisfaction scores you just saw the reason that there's no new competition is because this catherine mentioned there's high barriers to entry there's economies of scale locking up suppliers locking up the channels huge economies of scale from running elections all over the country a new party has has no shot in this world and we see that the parties also cooperate so the irony here is at the same time as they're competing they are cooperating and what are they cooperating to do to set the rules for elections and governing to benefit them and to reinforce the partisan divide which is the whole kind of strategy that is driving the way our political system works today an example just just to give you one is fundraising rules to you do you know that if you want to give money to a candidate or committee of a National Party Democrat or Republican you can give a single donor can give eight hundred forty five thousand forty seven thousand five hundred dollars per year to a candidate if they're a major party candidate if you want to give money to an independent you know how much you can give five thousand four hundred per two year cycle so that's three 113 times more in the rules set by the parties you can give to their candidate versus the rules that are set for independence and independence running so when we put all this together we end up with three very very distressing implications one the parties and the complex around them don't really want to solve the nation's problems not really they like issues to fester they like there to be wedge issues where the partisans on either side are energized to support their party that's not what the citizens want but that's what the parties want they prefer gridlock to compromise it happens over and over again and by the way it's both parties all of this is both parties it's not one or the other we also have seen that the parties have infiltrated our government not just legislating partisan competition has now extended to our executive agencies and government our regulatory agencies like the FTC and our courts it used to be that to get made a head of an agency or appointed as a judge you had to demonstrate competence and even-handedness now the only way to get one of those jobs is to be a very loyal partisan and so the ability to have consensus and and and and votes where where everybody votes together those days are almost over finally and I think this should be clear at this point from what we've already said there's no countervailing forces right now to change any of this despite the fact that there's overwhelming dissatisfaction there's still no accountability those are the parties nothing is changing what do we have to do we have to change the rules that are distorting the competition that we are forced to participate in now to understand how to do that and to get hopefully a little bit of optimism and excitement about our possibilities in America let me turn it back over to Kathryn so actually we've arrived at the lots of optimism section I want to summarize the theory of change in any game board games sports games serious games like politics rules of the game affect the way the game is played and affect the outcome of the game so you can change the rules of the game for example in basketball and Institute three-point line and you change the way the game is played to change the outcomes you can change the rules of the game in any industry and get different behavior and we can do that in politics because remember the rules aren't fundamentally in the Constitution they've been made of the problem as I said before is that the rules have been made up to serve partisans not to solve problems so to transform the system we have to re-engineer the rules of the game to incent healthy competition on dimensions that matter to the public interest what we need is a comprehensive innovation strategy and every innovation in the strategy is at the intersection of another Venn diagram what we call powerful and achievable so anything we recommend is powerful meaning that innovation addresses a root cause of the political dysfunction and additionally it's got to be achievable for us to recommend it and by achievable we mean two things one it's not a Trojan horse for either party's advantage and two we can theoretically measure success in years not decades so for example constitutional amendments need not apply to be in this strategy only innovations that are in this intersection do we have so let's take a look at what that is fundamentally are we have a comprehensive strategy with three pillars re-engineering elections re-engineering the legislative machinery which is all of this and also opening up near-term competition but today I'm gonna focus only on the first and that's the election machinery changing the rules for how we vote the reason is because these silly Shen's are the most powerful progress driven disruptors that we can achieve much sooner than many of us would have thought so let me back up for a moment there's two critical structural problems with our existing elections first of all the partisan primaries which we already talked about think of them as creating sort of a proverbial eye of the needle through which no problem-solving politician may pass the second problem is plurality voting which we haven't talked about yet but let's think about it in the United States elections can usually be won with having the most votes a plurality of votes even if you don't have a true majority for example in a three-way race you could win with 34% but that would mean at the same time that 66 percent of voters preferred someone else and plurality voting is believe it or not the single greatest structural impediment to new competition and the reason is a spoiler argument which I'll explain so sometimes we don't vote for the candidate we really want I would have feared that we will inadvertently contribute to the election of the candidate that we like the least so for example in 2016 you're not supposed to vote for Jill Stein because you'll take votes away from Hillary spoil the election for her and help elect Donald Trump you're also not supposed to vote for libertarian gary johnson because you'll take votes away from trump spoil the election for him and inadvertently help elect Hillary and if you think about it earlier this year you may have seen that Howard Schultz former CEO of Starbucks was exploring an independent run for the president and the Democrats were really up in arms in that case basically they came out and said not only are you not supposed to vote for Howard Schultz he wasn't even supposed to be allowed to run and if we think about it politics is the only industry where we're regularly told that less competition is good for the customer but as we saw in the Howard Schultz case this structural problem of spoilers being created when there's new competition is what's wielded against all the potential competition outside the door plea and it's the key reason why most potential competition never even makes it to the starting line the two elections innovations that we propose when implemented as a as a package will fundamentally change what politicians are incented to do elections machinery innovation number one is to Institute top four primaries and here's how that works you go to vote and we have a lemon in your primary we've eliminated partisan primers where you vote in the Democratic primary or the Republican primary now when you show up on primary day there's only one single ballot and everybody running is on the same ballot you pick your favorite when the election is over the top four finishers automatically advance to the general election so you can have more than one Republican more than one Democrat advancing as well as independence greens new parties election machinery number two is to Institute oh I'm sorry top four primaries this way is what would eliminate the eye of the needle partisan primary problem and thus allow legislators significantly more leeway to legislate in the public interest election machinery innovation number two is to institute rank choice voting in the general elections and here's how that works so now you have the top four finishers on the ballot and when you go to vote you see your four choices and it's easy you pick your favorite just like always but then if you would like you can also select your second choice your third choice and your last choice you can rank as many or as few as you want here's a sample ballot in my ranked choice voting election so in this case Alexander Hamilton is my favorite because I like the musical and then I choose Thomas Oh George Washington's second Thomas Jefferson third my last choice is James Madison now imagine the polls close the first-place votes are counted and if someone gets a true majority then the elections over that candidate wins but if after the first place votes are counted nobody has a true the leader doesn't have a true majority then the candidate that came in last place is dropped from the election and voters who had selected the candidate who is now out have their second choice vote counted instead and you recount the votes until until you have a true majority winner it's basically just a series of run offs but instead of having to come back for another election you cast all your votes at once rank-choice voting eliminates the spoiler argument and ensures we always elect the candidate with the broadest appeal to the most number of voters and these are not crazy new ideas by the way all the way back in 2002 we had in Alaska a referendum to institute rank-choice voting and a famous politician recorded a robo call supporting that referendum let's listen hello this is Senator John McCain I'm calling the urge your support for ballot measure 1 on August 27 as a presidential candidate and as a senator I've worked hard to open up the political process for all Americans ballot measure one will adopt a fairer voting method it will lead to good government because Alaska will elect leaders who have the support of a majority of voters please vote YES on measure 1 on August 27 and also in 2002 in Illinois where I lived we had Illinois Senate bill 1789 proposing rank-choice voting for all congressional and state primaries the sponsor then state Senator Barack Obama John McCain and Barack Obama two talented politicians who absolutely knew how the game is played they were ahead of their time on reform but now that time has come together these reforms top four primaries plus rank-choice voting in the general as a package will powerfully alter incentives and support the reinvigoration of the political middle so let's reimagine Congress post election machinery reform now when members of Congress are presented with that same opportunity to solve potentially the decide to vote YES on the same bill we talked about earlier a compromise bipartisan measure on our biggest problems they can vote yes if it's in the public interest they can say well under the old system I never would have made it back through my partisan primary if I voted for this but under the new system I'm pretty confident I can survive in the top four in the primary and then in the general election appealing to everybody in my district with a combination of first and second-place votes I'll be able to craft a win under this system elected officials now owe their election to a broader group of voters and are incented to be responsive to their entire district rather than to an or narrow swath of primary voters in special interests and the existing incentives for Scorchers the campaigning are reduced but most importantly for our country the barriers to new competition are dramatically lower leading to healthy competition to serve the public interest so let's revisit our initial Venn diagram and we are almost done here was our current unhealthy competition under the current rules of the game there's no intersection between doing what needs doing and getting reelected but here it is with the solution we implement election innovations top for primaries rank-choice voting general and we create that intersection so the actors in the politics industry are now incented to do what we as a country need them to do and that is the very exciting power of political innovation so what's next we need to implement top for primaries rank-choice voting across the country the Constitution delegates versus virtually everything about elections to the state so each state has to do this individually and it's an incredibly exciting time right now because there are campaigns for these reforms being created all over the country and one year ago this month the state of Maine became the first state in the country to pass rank-choice voting the results came in after midnight and I actually woke my daughter up at her request because she knew because I told her but she knew that this was the most important election of her lifetime to date of course this effort takes resources and everyone asked what it's going to cost and it's totally reasonable question I believe that political philanthropy what we call a special interest for the general interests offers the best potential ROI of any philanthropy out there and the dollars aren't actually as prohibitive as we might think so signers of the bill Melinda Gates giving pledge for example have collectively pledged over 400 billion dollars and all the mannequins annually give another 400 billion dollars in the cost to deliver top for an RC v per state well it's anywhere from five million dollars in a small legislative State to 20 million dollars in a large referendum state like California so if we take even an aggressive average of 15 million dollars per state that gives us 300 million to deliver this in 20 states and 300 million is less than five percent of the billions that were spent in 2016 Federal Elections alone and yet this 300 million for top for our CV is far more likely to sustainably impact the effectiveness of four trillion dollars of government spending and to transform the trajectory of our democracy so this is both powerful and achievable historically the United the American political system was the foundation of United States success and today it stands in the way of every important issue we need to address yet we have every reason to be optimistic I believe even profoundly optimistic because the reasons for our dysfunction are not a mystery and we have a strategy for transformation this country was founded on the greatest political innovation of all times and one of modern times and once again political innovation is the key to our future so I'd like to close with an invitation to action Thomas Jefferson is said to have said my HBS fact-checker said he didn't really say it but he should have in America we don't have government by the majority we have government by the majority who participate and historically for most of us we thought that meant we need to participate by voting but it turns out that what it means is that we also need to participate in the design of the rules of this most important game so imagine our political system restored to order imagine our elected representatives tackling our greatest challenges paving the way for a bigger and brighter future than any of us have been able to dare to dream in the last number of years imagine our democracy reinvigorated a beacon to the world reclaiming the promise of our republic the great American experiment is the challenge and the opportunity of our times and together we can deliver that promise for us and for future generations thank you so much please join us [Applause]

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