Democrat vs Republican economics

Eric Zuess’ book “They’re Not Even Close” compares the economic record of the American political parties from 1910-2010. His analysis shows that most aspects of the US economy are historically stronger under Democratic control than under Republican control. This is also true for the individual states, in that those which lean Democrat have a strong correlation with a robust economy and educational attainment.

Given that Republicans are strongly in favour of self-reliance, big business and the free market, while the Democrats have inclusion and the common good as their official platform planks, this data appears to be counter-intuitive. It does, however, explain why the Democrats have a hard time getting anything done, as they try to please everyone.

Nash showed that each such game has at least one Nash equilibrium. This is a choice of strategies such that, if any single player changes their choice, their pay-off will decrease. Getting there requires perfect knowledge of all other choices, which is most easily achieved by cooperation.

These models explain why wolves do better than tigers, and ants beat everyone.

So what is it that Democrats do ‘better’? I would argue the concept of public spending as investment, not waste. Here are the kinds of projects usually funded by Democrats, but vehemently fought by Republicans.

Infrastructure – build better roads, water systems, airports etc, and companies can move products and workers more efficiently. In addition, construction involves well-paid jobs, which increases the tax base.

Education – better-educated people make for a better society, are healthier and less likely to commit crimes (except for fraud).

So what can we conclude? Mathematics can predict that some cooperation is better for the economy than pure competition.

However, this prediction is after the fact, which is much less useful than before. The only people who will accept the original data are those to whom it is emotionally satisfying, namely economists and Democrats. Republicans will find a way to ignore or explain it away. In other words, the book is sadly unnecessary.

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