Primaries and Markets

October 27, 2007
Posted by Jay Livingston

My friend Marty Schram, who is a Real Journalist and not a blogger, had a column this week about what he calls “Campaign Calendar Leap-Frog.” So far, four states have rescheduled their presidential primary elections to come earlier than the traditional firsts, the Iowa caucuses and the New Hampshire primary. Other states may join in the madness.

I see it as an example of classic laissez-faire – a negative example.

The Market is supposed to be a magical invisible hand that transforms self-interest into public good. Through each participant pursuing his own self-interest, the competition in the market generates the greatest amount of total satisfaction. Therefore, all we need to do is stop regulating and let people pursue their self-interest, and everyone will be better off.

The classic counter example is the guy who stands up at the ball game to get a better view. He’s doing what’s best for himself. But by standing, he blocks others’ view, so they in turn stand, and so on until everyone winds up standing for the entire game rather than sitting comfortably. Even if the Red Sox win, everyone winds up worse off than they were before.

The primaries are doing the same thing, though in the dimension of time rather than height. Michigan and Florida have decided that it is in their interest to have an early primary. They’re probably right. Early primaries bring lots of candidates with lots of money to spend. But then Iowa, still wanting to be first, has to leap frog its caucuses back to January 3, 2008. Maybe other states will get in the race as well. New Hampshire may hold its 2008 presidential primary in 2007.
In the free market of primary scheduling, most of the states will wind up worse off than they were before. More crucially, the system will probably not be as good at doing what the primaries are supposed to do – giving the public the candidates it wants and that can best serve their parties and the nation.

Maybe the free market doesn't always have mojo.

(Marty has a neat solution – regional primaries. But that would require a very visible hand of regulation telling each state when to hold its primary.)