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America is losing its global competitive advantage, and the “political industrial complex” is primarily to blame, according to the father of modern business strategy, Harvard Business School professor Michael Porter.

Porter and his colleague Katherine Gehl, a former dairy industry CEO and entrepreneur, have applied the tools of competitive analysis to American politics, to discover how and why America’s dysfunctional political system is threatening future peace and prosperity. Their conclusion: it’s the duopoly.

“The political system is a private industry in America,” says Porter. “It consists of the two-party duopoly. Surrounding that duopoly are other actors” – lobbyists, campaign strategists, pollsters, marketers, think tanks, and the media. “Collectively, we call those the Political Industrial Complex.”

That complex profits not by solving problems, Gehl says, but by perpetuating them. The longer a political war lasts, the more entrenched the partisans become, and the more money flows to the political industry.

As a result, “None of the critical steps that need to be taken” to sustain American prosperity “have been taken for decades,” they say. “We haven’t dealt with the federal budget, the tax system, infrastructure, immigration, [or] our public schools.” This is because “we’re stuck. We’re in gridlock. The parties are good at blocking each other. They are not incented to fix these problems.”

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“If you fix immigration, all of a sudden a lot of your most fervent supporters have less desire to affiliate with the party and give you money. . . . The parties have divided the electorate into mutually exclusive groups of special interests and partisans” devoted to single wedge issues, says Porter. “The people in the middle don’t matter.”

The partisans comprise about 30% of the total Constitutionally defined electorate. Roughly 50% of constitutionally eligible voters fail to or are blocked from registering. Of the remainder more register as independents than as either Republicans or Democrats. Combined, the unregistered and the independently registered add up to more of the electorate than Republicans and Democrats combined.

That absence of the middle not only undermines the health, happiness and well-being of Americans – it also opens a wide path for countries like China to drive their state-managed capitalist economy to the top position in global wealth, power, and political and military influence, perhaps as early as mid-century. Once that shift happens, America’s leadership will decline to second-tier status.

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