The idea that that Americans prefer only two brands of cars, Ford and Chevrolet, or two types of restaurants - MacDonald and Burger King is preposterous on its face. Yet, the same idea applied to politics becomes received wisdom that is seldom questioned. according to this received wisdom, over 300 million people in the US have only two preferences - Democrats or Republicans and the political power balance represents preference of the voters. This is like saying that American preference for food is Mac Donald, Burger King, or eating at home.
In reality, the political market has been monopolized to a far greater degree than the consumer market. The consumer market is monopolized by a handful of large corporations, but there is enough room for smaller players to carve out their market niches. No such thing in the political market - there are only two monopolists: Democrats and Republicans.
Monopolistic tendencies in market behavior have been well documented. The mechanism behind such tendencies is rather simple - competition reduces profitability. The more actors compete in the same market the closer the selling price moves to the actual production cost, thus narrowing the markup. This is Econ 101. The only interesting question is how firms can stay profitable at all?
The answer provided by institutional and Marxist economists is - by reducing competition. They do it by carving out market niches in which they maintain monopolistic position. They carve those niches in various ways, such as by constant innovation as Schumpeter argues, or by collusion i.e. dividing up the market into the niches controlled by the respective players.
The collusion method requires tacit cooperation of the respective players as well as that of the government. That explains why US monopolies are really oligopolies that leave a handful of players in the market instead of just one or two. It is in the interest of government to prevent actual monopolies, because such monopolies are very difficult to control without causing major disruptions in the economy. As a result, we are left with oligopolies instead.
This poses the question why is not the political market in the US an oligopoly with a handful of players but a semi-monopoly with only two players? The answer is rather simple - because there is no one who can prevent the formation of monopolies in politics. The only force capable of this is the government, and the government is effectively controlled by the monopolists themselves. Both political parties reap tremendous benefits from reducing, if not altogether elimination, competition, so the collude to keep that competition to the lowest possible level and prevent any real challenge to their respective monopolies. How they do is well documented by Walter Karp (Indispensable Enemies: The Politics of Misrule in America, and Liberty Under Siege: American Politics 1976–1988).
This explains not only why there is no a third party in the US and why any political challenge to the status quo, such as Bernie Sanders or Donald Trump, is effectively neutralized by bipartisan collusion. The US electoral system is fixed - not by the monied interests as politicians want us to believe, but by the politicians themselves who immensely benefit from the existing duopoly. Both political parties are nothing more than patronage-for-money exchange centers, and political party bosses will not allow voters to take away that goose that lays golden eggs for them.
So it does not matter how we vote or whether we vote at all - the results will always be the same. We effectively live in two single party states which gives a new meaning to the phrase United States of America. What is united is not states or voters but the two political parties that stay in power since the Civil War. A more accurate name would be United Parties of America that are hell bend to maintain their monopolistic positions by dividing and conquering the voters.
