Two recent U.S. political developments trouble me deeply. One is the split that seems to be occurring within the Republican Party. The second relates to court rulings that will change the landscape of campaign finance.

These developments raise a critical question: Will the loosening of restrictions within the world of campaign finance exaggerate our political differences and accelerate the creation of new factions and political parties in the United States?

I worry it might.

But why is this worth fretting over? Many Americans would like to see an increase in the number of political parties. They are tired of the traditional Democrat-Republican split. They want options. They long for a “democratization” of the two-party system.

Two great thinkers, as well as recent experience in many parts of the world (especially Latin America), however, point out the potential havoc that such changes could wreak.

Presidents, Multiple Parties, and Painful Politics

Juan Linz, a preeminent political scientist and Professor Emeritus of Yale, has written extensively on the breakdown of democratic systems and the causes of such breakdowns. His work, “The Failure of Presidential Democracy,” points out that successful presidential democracies are the exception and not the rule (with parliamentary systems being much more common and generally more stable).

But what would make a presidential democratic system more vulnerable to breakdown? As Linz sees it, the key factor is the way power is divided between a democratically elected executive (i.e. president) and separately but also democratically elected legislature. When different parties control the two branches, stalemate often occurs and little gets done. New legislature is vetoed by the executive, and the president’s agenda is stalled by an uncooperative congress.

If you think this has created problems in the U.S. where we only have to worry about two parties sharing power, consider the situation in Latin America, for example, where most nations are presidential AND multi-party. There, you frequently have a president who is elected not by a true majority but only as a result of multiple rounds of voting. In addition, power in the legislature may be divided between dozens of different groups with little in the way of inter-party coalitions (which are a necessary part of the parliamentary system).

With political “ownership” so severely fragmented, governments may accomplish virtually nothing and, in so doing, prevent society from adequately progressing. In the case of Latin America, this exact scenario has been a key factor in de-legitimizing both democracy and capitalism in the eyes of many constituents.

Potential Gridlock in the Political Economy

Now consider Michael Heller, professor of law at Columbia and author of “The Gridlock Economy.” Heller is a widely recognized expert in how markets can breakdown as a result of fragmented private ownership.

Common sense states that a strong patent system and intellectual property rights are critical to creating the incentives needed to spur innovation and economic progress.  But Heller shows that overly fragmented private ownership – going too far with private property – actually prevents progress.

When commercial flight began to take off in the early 20th century, property rights nearly killed the nascent industry. At the time, U.S. common law held that ownership of land gave the proprietor rights to not just the surface area of the land, but rather to what was essentially a column of property running from the center of the earth up to the heavens. So any plane flying over your house, and then your neighbor’s house and your neighbor’s neighbor’s house, was technically trespassing.

Similarly, Heller discusses Quaker Oat’s Klondike “Big Inches” promotion in the 1950s. In an attempt to boost sales, Quaker Oats gave away a title to a square inch of land in the Yukon to each individual who bought their product.  With millions of owners each claiming a tiny piece of such a large plot of land, developing it for any reason would have been impossible.

These types of “tradegies of the anti-commons” are all around us.  And they are killing innovation and costing lives, argues Heller.

Tying it all together, fragmentation within the U.S. political party system could create a game of “big inches” that would make legislating exceptionally difficult and stall political and economic progress.

That’s why I’m concerned. What do you think?

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