Democracy’s Network Effects
On Wednesday January 6, 2021, Congress assembled, in the afternoon, to verify the results of the 2020 presidential election. The event signals the end of the interregnum — the quiet two-month period between November, when voters cast their ballots for president, and when the representative branch tallies Electoral College ballots, validating the voters’ will.
The verification is a sober affair. It is not newsworthy. In 2013, the verification of Barack Obama’s victory over Mitt Romney called for little more than a Reuters slideshow.
However, the 2021 Congressional assembly to verify Joe Biden’s victory was so different it was without precedent.
It is unusual for the election’s loser to continuously contest its results, let alone hold a rally to further stake his resistance. Yet Donald Trump held such a rally, at the same time the ballots were counted, at the Capitol. He stuck to a well-worn script: The election was stolen from me; take back the government.
At the rally’s end, frenzied attendees inspired by Trump’s fiery rhetoric descended upon the Capitol building. A riot ensued, halting the Congressional assembly. Its members were rushed to safety.
By dusk, the riot culminated in Capitol police routing the now-insurrectionists from the building. But not before they posed for photos on the dais and in top Congressional-leader offices.
The riot ended in five deaths. It later came to be known as a Covid-19 super-spreader event.
Talk of democracy’s demise ensued. Its foremost force, the United States of America, had taken another spill on the global stage. Democracy’s fragility turned into a routine talking point for leaders of both parties.
Handwringing in the face of a large-scale negative event is well justified. Democracy’s weaknesses should be open to constant criticism, especially when viewed as a system of government. But when viewed as a network-effect marketplace, which democracy surely is, the condition of US democracy couldn’t be stronger.
The Marketplace
Democracies function as a two-sided marketplace. Voters create supply where elected officials, who sell their vision, fulfill demand. The market’s currency is the public vote.
In the marketplace, citizen-voters seek representatives who share their perspectives and values across a spectrum of thought, including religious, economic, civic, moral, and global. In the US, the variety of thought is neatly divided into a two-party system, into which the United States is locked.
In theory, at least, individuals endeavor to elected office to further the consciences and rights of fellow citizens. They need votes to do it. Furthermore, one does not become an elected official by applying for the job whenever she wishes. The period when citizens cast their votes is not only fixed in time but also cyclical.
With the above in mind, it’s important to note that unlike media marketplaces, advertisers do not create a third side of the market. Advertising is a demand-side tool for both the elected official and her party to generate as many votes as possible, thereby claiming electoral victory.
The Network Effects
MIT professor David P. Reed introduced the idea that group-forming networks — or put another way, networks that create clusters — scale faster and operate more powerfully than other types of networks.
Democracy, especially in the United States, is a potent group-forming network. One may view the Democrat and Republican parties each as a vast connection of clusters.
Well-known Democrat clusters include pro-choice advocacy, welfare advocacy, and, in the pursuit of equal rights, higher-tax advocacy. Common Republican clusters include free-market advocacy, small-government advocacy, pro-life advocacy, and gun-rights advocacy.
While the participants in these clusters may not agree on every point, it is the size of these clusters, the degree of their similarities, and the propulsion of an elected official’s message that galvanize voter turnout. Propelling a message always involves denigrating the opposing side.
This is significant, because the degree of denigration that occurs between opposing clusters actually strengthens them. Why? Because the strength of any network-effect market is measured by its transactional output.
Through social media and the 24-hour news cycle, US democracy has maximized its capacity for denigration. Perversely, this has led to growing participation in democracy.
Consider: In the divisive 2020 presidential election, Joe Biden, the leader of the Democrat-party clusters, received 81.2 million votes, or the highest vote-count for a president ever. Donald Trump, who led the Republican-party clusters, received 74.2 million votes, or the second-highest vote-count for a president ever.
2020 yielded the most transactionally significant election in any democracy’s history.
Beyond these clusters, democracy benefits from an often overlooked but powerful network effect: hereditary passage. These are the views of your parents and your parents’ parents, passed on to you, and few of us are free from it.
You are surely familiar with cellular-provider family plans. The idea is to lock you into a network service for life. Democracy anticipates the same.
Democracy Survived
By now, you have noticed democracy survived the events of January 6, 2021. A new cluster that shares participants from both parties even emerged from the chaos: anti-insurrectionists.
Yet, few clusters are permanent. Most are ephemeral. Abbie Hoffman’s Yippies, for example, have receded into history, as there is no function to an anti-war cluster when there is no war to protest. Participants found definition in other ethics and new ideas.
On January 6, it appeared Donald Trump might have been removed from office within hours. Yet, just one week later only 10 Republicans from the House of Representatives voted to impeach him.
The anti-insurrectionist power weakened in mere days. The cost of switching from outrage to business-as-usual was so low that elected officials retreated back to their routine positions. In particular, the positions that shuttled them into office, in the first place. In those familiar clusters, a healthy body of constituents awaits in support.
The rationale behind elected-official behavior is simple: do not disrupt your access to votes. For it is the voting blocs that are fragile, not democracy itself.
Switching Costs
The more powerful the network effects are, the higher the cost of switching. Switching costs permeate every aspect of our lives. For example, consider the hassle of moving.
To switch homes, a mover must find a new one, fund upfront costs to secure it, pack, hire a moving company, reposition her belongings in the new space, and wait 60 or more days to receive her security deposit back from where she previously tenanted.
Consider then the steps to switch 300 million US citizens to a new system of government. Especially from the US-democracy system, which, while entirely imperfect, makes moral attempts to benefit its citizens through the principle of due process, unemployment insurance, welfare, and, as mentioned, the right to vote.
More importantly, switch to what?
2020 will surely be remembered as the year of Covid-19, but it will also be remembered as the year US voters dismissed autocracy out of hand.
Monarchies are unlikely to stage a comeback. It’s further unlikely that democracy will adopt the semi-presidential federate model of China, due to our economics. (In the US, innovation is funded through deep-liquid markets, by way of equity. In China, innovation is state funded through debt.)
So, in a few days, Joe Biden will be sworn in as the 47th president of the United States. Despite managing a unified government, his agenda will be tested. Deals will be struck, concessions will be made, new modes of thought will emerge, and new bridges will connect participants. In two short years, his efforts will be validated or repudiated by voters in Congressional elections.
Throughout it, the two-party system will stand. That is not just the power of democracy at work; it’s the power of network effects.
Originally published at https://stephenxblackwell.medium.com on January 18, 2021.
