A nonpartisan approach to fixing the politics industry

David J. BenDaniel Ethics Lecturer Katherine Gehl on how “political innovation can break partisan gridlock and save our democracy.”

“Washington isn’t broken. In fact, it’s doing exactly what it’s designed to do,” said Katherine Gehl, delivering the 2019 David J. BenDaniel Lecture in Business Ethics at the Samuel Curtis Johnson Graduate School of Management in Sage Hall on November 19. The real problem, Gehl maintains, is that our political system is designed to serve the interests of the two major parties and their biggest supporters; not the public interest.

“It was never designed for us,” said Gehl. “The system has been designed and continuously fine-tuned and optimized by and for the benefit of two private gain-seeking organizations: the two major political parties and their industry allies, which together comprise what we call the ‘political industrial complex.’

“Politics in America has become a major industry, and it functions in many ways similarly to other industries,” Gehl told the audience of students, staff, and faculty from across the Cornell SC Johnson College of Business. This particular industry is a duopoly, she said, and although its customers, the American people, might not like what it delivers, the marketplace offers no viable alternatives.

Change the rules to foster innovation

To attack this problem, Gehl recommends that Americans change the way we run elections. “The rules have been made up to serve partisans and not to solve problems,” she said. “To transform the system, we have to re-engineer the rules of the game to incent healthy competition on dimensions that serve the public interest.”

Gehl’s views on political competition grow out of a long career in the private and public sectors. She is the former CEO of Wisconsin-based Gehl Foods, a $250 million food manufacturing firm, which she sold in 2015 in order to devote more time to political innovation. As CEO, Gehl led an aggressive growth strategy, driving transformations across the company ranging from management and processes to facilities and information systems. Before that, she held roles at Bernstein Investment Research and Management, the City of Chicago, the Chicago Public Schools, and Oracle Corporation. Gehl also serves on the board of directors of the Overseas Private Investment Corporation, a federal agency.

According to Gehl, the political duopoly undermines the great American experiment. It’s not that government leaders don’t agree on the outlines of solutions to issues such as poor K-12 education, inadequately skilled workers, and high rates of infant mortality, she said. “It’s that we no longer have any ability to get things done.”

That’s because our politics are rigged mainly to help major party candidates win elections, Gehl said. When a legislator votes for solutions that would benefit a broad range of constituents, rather than bow to demands from special interests and highly ideological voters, that legislator will likely face a primary challenge from the extreme left or right in the next election.

Because they need to stoke party loyalty to win votes, elected officials often prefer not to solve our country’s problems, Gehl maintained. “If the industry keeps alive divisive issues, like immigration, guns, and healthcare, and they continue to fester, then partisans and special interests on both sides are energized to continue to vote and engage along those very compelling product lines.”

The politics industry needs healthy competition

In a healthy industry, when businesses don’t deliver what customers need, entrepreneurs jump in with fresh ideas. But our political duopoly makes such competition impossible, Gehl said.

Gehl explores this dilemma in a report co-authored with Michael Porter, Bishop William Lawrence University Professor at Harvard Business School: “Why Competition in the Politics Industry is Failing America: A Strategy for Reinvigorating Our Democracy.” In 2020, the two will publish a book on the subject, The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy (Harvard Business Review Press, June 2020).

One example of how our system kills competition is its treatment of third-party candidates, Gehl said. According to recent rules set by the two major parties, any donor can contribute up to $847,500 to either party or to both. “But if you would like to support an independent candidate, you are limited to $5,400 once every two years,” she said.

Top five primaries and ranked choice voting

Suggesting election reform as a means to break the political duopoly, Gehl described two potential innovations: top five voting in primaries and ranked choice voting in general elections.

Under top five voting, candidates of all parties would compete in one primary election. The five who won the most votes would proceed to the general election, where voters would rank candidates in order of preference. If no individual won more than half of the first-place votes, there would be an instant, computer-driven series of runoffs until someone achieved a majority.

Among other advantages, this new design would eliminate the “spoiler argument” that discourages votes for third-party candidates. It would also let elected officials vote for measures they believe make sense, with no fear of being “primaried,” Gehl said.

People who want to change the rules of our political game, to reclaim the American Dream, need to get active in the campaign, fund the effort, and evangelize for the cause, Gehl told the audience. “I sold my company in part to do this work. And I hope that a good number of you will be all in, too.”

The David J. BenDaniel Lecture in Business Ethics was established and endowed to emphasize Johnson’s strong interest in ethical business leadership and commitment to educate moral leaders.