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Are Republicans (and Democrats) inferior goods?

12 Nov
You might think an inferior good is something like the lesser of two evils.

It’s actually a piece of basic economics jargon.  An inferior good is a good that people buy less of as they earn higher incomes or accumulate more wealth, unlike a normal good.  For example as people earn more money they usually buy more square footage of housing (as well as buying more in terms of a higher price as they move to better locations and more luxurious construction and finishes) – housing is a normal good.  Vacation homes are a normal good; people buy more of them as they become (or in inflationist economies, believe) that they are wealthier.

Inferior goods are things like second hand mobile homes, or cheap beer, or dented bin items, or merchandise at the dollar store.  Few people buy more of these as they get wealthier.  But they buy more of them as they become poorer.

Now let’s consider what “being wealthier” means to an economist.  Ultimately it means being able to make more and more exchanges so you can trade what you have for more of the things that you want, thereby satisfying more of your desires.  So having more options is having a higher psychic income, just as having a higher monetary income tends to give you more options (since you can buy or rent a wider range of goods and services).

So the question is:  is the conventional two party election a form of poverty?

Having more options on the ballot makes voters wealthier, in that they have more options, even if they continued to choose to buy the same product.  Which is what they would do if the products they had been buying were normal goods.

But apparently the establishment parties and their candidates are not normal goods.  When you end barriers to entry to the political market, either by managing to get past the barrier to entry created by ballot access laws and getting a new party on the ballot, or by raising even a fraction of the money the establishment parties have and doing enough advertising that a small share of the marketplace of voters knows there is another product, people stop buying the product they used to buy and start buying the new product by voting for the new party.  As the recent Virginia gubernatorial race shows, this happens even when the new product (the Libertarian Party) spends $3 per customer on advertising and the old firms outspend it, paying $15-30 per consumer in advertising.

Republicans and Democrats are inferior goods.  People only buy them when they are impoverished in terms of choices and information.