Republicans chained to the South

I know Logan has brought up the topic of Southern politics and Tom Schaller's Whistling Past Dixie before, but I wanted out how "in vogue" this topic has become recently. The Lexington column from this week's Economist asked this rhetorical question about the GOP: "A national party no more?" Harold Meyerson's column in today's Post also jumps of the bandwagon.

All of this new attention on the Republican-South connection has got me thinking about a few things:

1. How much can one lean on the midterm election results as proof of this notion of GOP regionalization? Sure, most of the House and state legislative seats that changed hands in November were outside of the South, but that says little about total composition. Only 17 of the 49 Republicans in the Senate come from what are traditionally termed "southern states." The South may be a regular strong hold for Republicans, but there are plenty of purple districts out there that change hands relatively frequently.

2. Meyerson's pot shot at Walmart being a southern business model that has invaded the rest of the country is dubious. What about the business models of other southern success stories, such as Whole Foods Market? Would Meyerson dare speak ill of WFM founder (and left-libertarian) John Mackey's emphasis on the social responsibility of business?

3. Do demographic trends support the Whistlin' Past Dixie thesis? I know the western states and the sunbelt have been experiencing a population boom recently, but what about the South? Is the GOP's hold on the South permanent considering the disparity in fertility between white and Hispanic Americans? Will Bible-thumping white southerners be able to transpose their culture and values on the rising Hispanic population in the South?

My participation over the last few months has been low because of a brutal semester at George Washington. Thankfully, the semester will come to a close Friday afternoon, which means I should be churning out more posts on libertarianism and foreign policy soon.

This is the same BS that Republicans were saying about the Dems a few years ago--that it had become a regional party.

The simple and obvious fact is that each party has regional strongholds (as stated above) and much of the country could go either way in terms of national politics.

P.S. I hate how local and national political parties are linked. I hope that non-partisan elections (using mechanisms like Instant Runoff Voting) could break that link. We need more competition among politicians.

I think the results of the midterm are just extending down ballot what has tended to be true for some time. Just as Georgia flipping to Dole in 1996 was a predictor of the Democratic wipe out coming in the state later on (particularly 2002), New Hampshire flipping to Kerry in 2004 foreshadowed the defeat of Republicans at almost every level in the Granite State just two years later.

So the fact that the GOP has only one New England Congressman and two New England Senators is just reflecting that the region itself has consistently voted for the Democrats for a good four elections now.

Whole Foods is no where as successful as Wal-Mart . . . if only, though.

As for Southern demographics, IIRC minority populations as a percent of the population are on the rise in Texas, Mississippi, Georgia, and Florida. Yet the trends in Northern Virginia, and to some extent North Carolina, are in the direction of more professional whites that also lean Democratic. And you still have states like Arkansas and Tennessee with Democratic Congressional Delegations and Democratic Governors. The Democrats are shut out of the South, which is why I find the argument that the Democrats are dependent on the South implausible. The combination of liberal whites and minorities will give the Democrats a much larger base in the South than the Republicans ever had during the Solid South years. Given this larger base, we should be just as able to form a winning coalition by winning large majorities outside the South as the Republicans were during the Gilded Age.

I don't believe that there is any social responsibility for businesses - if all eternalities are captured correctly in regulations or pricing. The problem is that the government rarely if ever captures externalities correctly with regulation and only manipulates pricing through taxation when there is enough popular support.

What John Mackey is getting with WFM's commitment to social responsibility is the good will of the public. The good will of the public is just like building up strong brand recognition. It makes good business sense in that public feels good about patronizing the business and is more likely to make concessions for the growth of the business. Although the value of good will is difficult to quantify, the good will that WFM gets is well worth the resources that it decidates to the betterment of society.

In the debate at Reason on social responsibility, Mackey emphasized respect for all stakeholders, whereas Friedman emphasized duty to the owners.

I favor Mackey's attitude, thinking that Freidman's attitude is too servile and narrow-minded. The entrepreneur does not serve the investors--he serves himself. To achieve his goals, he needs the cooperation of various groups, and the investors are just one of them.

The owners may have the formal ability to fire the entrepreneur from that particular position in the company, but he can always go and create another company (or get hired by another company, etc.).

adam, I think you just captured the weakness of Friedman's argument. Ultimately, economics are about looking out for number one and a successful entrepreneur is the one who looks out for number one by balancing the wants of the customers, employees/managers, and investors. His approach may cover profitability and efficiency, but does not address intangibles like leadership and vision sometimes make the difference between a success and a failure, but even more importantly, a success and a mega-success.

I'll agree and disagree with you. Perhaps, we are just looking at different sides of the same coin.

The entrepreneur cannot ignore any of the stakeholders in the corporation. The customers should be served well. The employees should be paid well. The entrepreneur needs his own reward, and the shareholders want their profits and dividends. The rest of the public don't want to be affect by corporate operations, and if affected they want to be affected positively. The ideal corporation is where these four different group of stakeholders cooperate together and to generate an outcome that creates value for all parties in an equitable fashion.

After all, a free market is based on cooperation first and foremost. A trade is an exchange of good services between parties that benefits all parties involved. That's cooperation. Vigorous competition is secondary, to ensure an equitable distribution of benefits from any trade. The entrepreneur answers to the investors and needs to make the corporation profitable and durable. That's what pays for his wages and can help him achieve his goals. Because of this responsibility more than anything else, the entrepreneur cannot afford to spurn customers or workers. Doing either will have huge negative impacts on the bottom line, and alienating the public will make growing and expanding the business difficult.

The effect of shortchanging customers can be seen in studies of customer loyalty. Two companies with the same revenue in the same industry and produce similar products, one with 50% customer loyalty and one with 95% customer loyalty, will have completely different bottom lines. Barring any extraordinary circumstances, the company with 95% customer loyalty will be very profitable and in position to grow business, while the company with 50% customer loyalty will be losing money and struggle just to maintain its current revenue numbers.

The effect of shortchanging employees can be seen in studies of employee productivity and employee turnover rates. For most corporations, hiring new employees means sinking tens of thousands of dollars into interviews, accounting, training, and familiarization. Even after this initial cost has been paid, most employees aren't as productive as the wages they are being paid until the second or third year. A company with high employee turnover rates will spend a lot of money and get a workforce that isn't particularly productive.

The value of pleasing the general public is less tangible. A friendly public is receptive to advertising and more likely to experiment with patronizing the company. A friendly public is more likely to excise political power in favor of the company, etc.

It's correct, an entrepreneur - a business - a corporation - will find it better to be concerned with more than just making a profit. Being obsessive with money just makes the entrepreneur - the business - the corporation - appear greedy. To maintain long term profitablity, to be durable across generation, and to continue growth, the entrepreneur - the business - the corporation - must understand the desires of its workers, its customers, and the public and innovate to fulfill those desires. Maybe that's "social responsibility" but the business will be all the more profitable because of it.

Executives also have the ability to take "intangible compensation"-- inherent in their control over spending decisions. For example, an executive could be an architecture buff, a techno-geek, or a philanthropist, and he could mix any of those interests with his role as a company's executive.

He could pour millions of dollars into a building marvelous company headquarters, or into supporting the development of the community where they work, or funding research into new technologies that don't have great marketing prospects.

The trick is that any of those activities could be spun as "strengthening the company", but they would not be pursued by an equally competent executive with different interests...and it's possible that the executive is putting too many resources into those projects--but as long as he generates enough profit to keep the investors happy, it doesn't really matter.

Part of this "dispute" centers over how much of decision-making is attributed to rationality, and how much is attributed to intuition. I think an important chunk of any decision-making process is intuition, and the idea of "social responsibility" has rather different interpretations if it is placed as criteria in the "rational section" rather than taken as a value to be internalized into the "intuitive section" of decision making.

I think that "social responsibility" is a great style of interacting with others. I also think it's a good idea to encourage/reward that style of thinking in others.

Of course, that does not mean that any sort of law should be passed to encourage it--a response to laws would invariably be placed in the "rational section" of decision making, convolute the issue, and just increase cynicism.