Have you ever noticed that competitors open their stores next to each other? This seems crazy until you understand a principle called Hotelling’s model of spacial competition. And once you do, you’ll also understand how Ted Cruz is positioning himself to outmaneuver Rand Paul as the conservative candidate for the GOP nomination.
First, a quick, if simplistic, explanation of the principle. Let’s say you open a hotdog stand on a beach — and let’s say that hotdog stand is built on what would be the 40 yard line (if the beach were a football field.) Now, based on this information, you might expect that if someone else wanted to open a second hotdog stand, they would open it on the other 40 yard line. That would be the polite thing to do, after all. It would give each of you some space to operate, right? Wrong. The new hotdog stand would most likely go on the 41 yard line — right next to yours.
The reason is simple. The other guy now controls about 60 percent of the beach, while you control 40 percent.
So how is this playing out in the real political world? First, it’s important to know that Cruz and Paul are competing against each other to win the grassroots/populist/libertarian/tea party (however you want to define it) division. (For our purposes here, the other candidates represent different stores on the same Republican field. Some are selling caviar, but only Cruz and Paul are hotdog stands.)
They are competing for the same voters, volunteers, and donors, just as hotdog stands would be competing for the same customers who are looking for a “meat-like” substance on a particular day.
Paul was the first to build his hotdog stand. In fact, Paul’s old man built that shop years ago. It’s been around so long that it’s best to think of it, not as a hotdog stand, per se, but instead, as a bricks and mortar structure that can’t be moved.
And he built it on about the 40 yard line.
Cruz is the new guy. His goal is to get as close as possible to Paul, while still controlling the middle of the field.
We saw a the first hint of this back in November, when the New York Times‘ Jonathan Martin reported that “when Mr. Cruz went to New York City to meet with donors this summer, he privately offered a different view of Mr. Paul: The Kentucky senator can never be elected president, he told them, because he can never fully detach himself from the strident libertarianism of his father, former Representative Ron Paul of Texas.”
In other words, Paul’s just a little too far out in right field.
The area where I think this is playing out in the most obvious form is foreign policy (as I noted today, issues like Russia’s invasion of Crimea create unique challenges for Paul to overcome. Conversely, this creates opportunities for other candidates like Cruz.)
Just today at Frank Gaffney’s shadow CPAC gathering, we witnessed this. As Dave Weigel reports, Cruz specifically compared his foreign policy to Rand Paul’s, demonstrating that he agrees with Paul on some things, but — surprise, surprise! — is a notch closer to the more mainstream GOP position:
“The Republican Party — you can point to two points on the spectrum, where Republicans lie. On one side you have the views of John McCain. The other end of the spectrum, you have the views of Rand Paul. Now, with respect, my views are very much the views of Ronald Reagan, which I would suggest is a third point on the triangle.”
He gave some examples. “I agree with Rand Paul that we should not engage with military conflict in Syria,” Cruz said.
… But he agreed with John McCain on Iran.
Cruz is presenting himself as being in the middle of the McCain-Paul spectrum (you know, right where Reagan was). This would seem to undercut my theory that he is utilizing Hotelling’s model, but — assuming one buys Cruz’s analysis of his middle positioning on foreign policy (and I’m not so sure) — it’s important to note that foreign policy is merely one of the issues primary voters will be considering. And most likely, it won’t be the primary issue.
Let’s be honest, there’s a lot of space between McCain and Paul, and I think we would probably agree that when it comes to style, temperament, etc., Cruz is a lot closer to Paul than he is to McCain (remember the whole “wacko birds” thing?) During his CPAC speech, for example, Cruz praised Ronald Reagan and Ron Paul for being the two candidates who attracted young supporters. (His mention of McCain was less positive. “Of course, all of us remember President Dole, President McCain, President Romney,” he said.)
So basically, the Cruz strategy is to get close to Paul, while still staying toward the middle of the field. If you care about small government, both guys are good. Want to take on Obama? Check. Don’t like drone strikes, want to close the IRS, hate ObamaCare? Check. Check. Check.
But Cruz is making a bet that Paul’s more libertarian positions on issues like non-interventionism aren’t a mainstream opinion. So he will set up shop just on the other side of Paul. Anyone who says, “I really like Paul’s position, but I think we need to stand up to Russia,” now has a home. Or the guy who says, “I hate drones, but I don’t want Iran to go nuclear,” has a candidate.
Whether it’s hotdog stands or politics, one maxim remains true: “Keep your friends close and your enemies closer.”
UPDATE: In an earlier version, I said Cruz praised Ronald Reagan and Rand Paul for attracting young supporters. I meant Ron Paul.