Are our main political parties like banks in 2007? I'm prompted to ask because of the widespread belief that the main parties are insufficiently differentiated. Seamus Milne complains that "only the narrowest range of policies is acceptable" and - from a different perspective - Nick Barlow bemoans the uninspiring "politics of non-differentiation":

If all you can do to distinguish yourself is claiming 'slightly different than X and Y, but not by too much!' then is it any wonder no one wants to pay attention to you?

Not everyone shares this view: Simon points out that the two main parties do differ significantly on, for example, the EU and inequality. But let's, for the same of argument, run with the Barlow-Milne view.

There's a rational basis for what they are complaining about. It was described by Harold Hotelling in 1929.

To see his point, imagine ice-cream sellers setting up stalls on a beach, along which sun-bathers are scattered. The first seller would place his stall half-way along the beach, as this minimizes how far customers must walk to get to him. But where does the second seller put his stall? Hotelling proved that it was next to the first's. And the third and fourth sellers also go for the middle of the beach. Buyers, concluded (pdf) Hotelling, "are confronted everywhere with an excessive sameness."

This helps explain why our towns are full of almost identical coffee shop chains. And it is just what happens in politics. The cliche that "elections are won in the middle ground" and the well-known median voter theorem are expressions of Hotelling's principle of minimum differentiation. He himself saw this. His idea, he wrote, "is strikingly exemplified" in politics, where "each party strives to make its platform as much like the other's as possible."

From Hotelling's perspective, minimum differentiation is maximally rational.

Or is it? Let's return to the beach analogy. What happens if there's a bad summer? Or if the beach becomes inaccessible because of a landslip? Or if people decide to no longer take beach holidays?

All our ice cream sellers would then go bust. The only survivor would be the apparently irrational seller who set up his stall inland.

If there is environmental change, apparently rational Hotelling-type strategies can lead to mass extinction. For example, in 2007 most banks (pdf) were pursuing similar strategies. When the environment changed, there was a mass wipe-out.

Hotelling-type strategies eliminate ecological diversity. But such diversity might be the only way of surviving environmental change.

Hence the question I began with. The rise of nationalists, Ukip, Greens and voter apathy might represent the sort of environmental change which cause Hotelling-type strategies to fail.

The standard response to this possibility is along the line of Seamus's - to advise Labour to shift left (and the Tories rightwards): it's a neat coincidence that the recommended move just happens to be always towards the writers' preferred position.

But is this always feasible? Return to our ice-cream sellers.If they have emotional or financial attachments to the beach, it might not be easy to move. This is true for many companies: they have vintage organizational capital which locks them into specific ways of doing things and makes radical change very difficult. And the same might be true of political parties. They too are trapped by history and brand; for example, ethnic minorities don't vote Tory in part because of the legacy of Enoch Powell.

Advice such as Seamus's under-estimates the sheer difficulty of changing*.

It's possible, then, that the main parties are heading for something like extinction and yet they cannot do much about it.

* You might object that Thatcher and Blair both transformed their parties. But they were exceptional leaders. And a glance at the trends in party membership under their leadership suggests even they were not wholly successful.