A frequent refrain of the 3rd party progressive is this notion that by denying the unsatisfactorily progressive party your vote, they will be punished, and will in future, become more progressive to recapture it.
This theory makes a certain amount of intuitive sense, but in fact I can find no evidence for it, and plenty that shows the reverse happening. At this point there is little doubt that being defeated generally causes a party to move toward the party that won, not toward the idealists who refused to support them in protest. The effects of victory are less consistent, but defeat usually results in moving to where the most votes are, which is the party that won.
The basic problem is that voting is a very blunt instrument for influencing policy. You may be sending a message, but it is not heard clearly and usually misinterpreted. The other problem is that this theory is based on entirely too much reification of parties. We discuss them sometimes as if they are coherent even monolithic actors, but this just isn't so. The Democratic party does not have a brain and nervous system that reacts to stimuli like a person might.
1952 - After 6 5 consecutive defeats, the Republicans nominate Eisenhower and abandon policy planks to kill Social Security and roll back the New Deal. Make no mistake, Eisenhower was far too liberal for the Republican base.
1968 - After the defeats of 1960 and 1964, Republicans nominate another (relative) moderate, Richard Nixon over the conservative pick, Ronald Reagan. Nixon picks a nationally unknown VP from a liberal state (Maryland) to further placate voters that he is not too far to the right.
1992 - After 3 big defeats, 2 of which entailed running actual liberal candidates, Democrats pick DLC moderate Bill Clinton.
2004 - In 2000, Ralph Nader's vote totals in NH and FL, if given to Gore would have won Gore the electoral college. Another 5K Gore votes going to Nader in WI would have given that state to Bush too. Despite this lesson delivered by the 2.4% who voted for Nader I didn't notice the Democratic party turning left in 2004. In fact it rejected such a candidate in the unapologetically anti-Iraq war Howard Dean and opting for the "electable" John Kerry, who downplays his liberal roots and runs as a pragmatic centrist.
Canada's NDP and Liberals - While they are not in electoral oblivion, the effect of Canada's social democracy party, the NDP is generally not to "pull the Liberal party left" but actually push it to the centre. When the NDP manage to hold the balance of power in a minority parliament, they can be effective in forcing progressive policies from the Liberals, but electorally, their main effect is to syphon off progressive voices from the Liberal party and leave the less progressive wings of that party in control of its agenda.
UK's Lib Dems and Labour - I haven't studied this, but I'm guessing it isn't that far off what the NDP/Liberals do in Canada. Judging by the Blair and Brown Premierships, it seems likely.
I bring up those last two not as examples of "defeat pushing a party" specifically but so I can transition into what actually happens. The main effect of not voting for a party is that your voice is no longer relevant to later policy debates. You left the table, so the people who showed up will play your turn for you.
Now, are there any examples where the 3rd party voting tactic has worked? Even if your goal is to create an American NDP/Liberal Democratic 3rd party analog, I have to say it's not always all that great. The NDP took down the Paul Martin Liberal government because they figured they would increase their own seat margin and end up as the balance of power in the next minority parliament. It didn't work, and the Conservative party has been in charge here since 2005, with the NDP ignored even more than they would be under a Liberal government. They're currently bashing Stephane Dion's gutsy national carbon tax plan in favour of the less effective cap and trade. Why?
Well my thinking is that the purity of 3rd parties is inversely proportional to their electoral chances. Once the party gets to the level of having enough electoral power to actually sway outcomes, they have something to lose, and start compromising on positions to achieve more or keep power. Or, they explicitly run against the more liberal major party in unprogressive ways. See here, here, and here.
Post Script: Often I see people saying "well I live in a safe blue/red state so I can protest vote without risking a Republican victory" - That's probably true, but your vote still matters. Bill Clinton never got a majority of the vote, and this talking point was frequently used to deny him the mandate he should have rightly been able to claim. In both victories, he absolutely thrashed his Republican opponents by far greater margins than Bush beat Kerry, yet a 51-48 victory for Bush was sold as "political capital" and a "mandate." Even in Utah and Massachusetts your Democratic vote matters in this calculus.
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