"The old Italian toxicologists are said to have always arranged their discoveries in a series of three terms—first the poison, next the antidote, thirdly the drug which neutralised the antidote. The antidote to the fundamental infirmities of democracy was Representation, but the drug that now defeats it is the Caucus [political party]" http://books.google.com/books?id=42YpAAAAYAAJ&dq=Popular...
And Noah Webster eloquently states the fundamental problem with party politics:
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"...nothing is more dangerous to the cause of truth and liberty than a party spirit. When men are once united, in whatever form, or upon whatever occasion, the union creates a partiality or friendship for each member of the party or society. A coalition for any purpose creates an attachment, and inspires a confidence in the individuals of the party, which does not die with the cause which united them; but continues, and extends to every other object of social intercourse."
"Thus we see men first united in some system of religious faith, generally agree in their political opinions. Natives of the same country, even in a foreign country, unite and form a separate private society. The Masons feel attached to each other, though in distant parts of the world."
"The same may be said of Episcopalians, Quakers, Presbyterians, Roman Catholics, Federalists, and Antifederalists, mechanic societies, chambers of commerce, Jacobin and Democratic societies. It is altogether immaterial what circumstance first unites a number of men into a society; whether they first rally round the church, a square and compass, a cross, or a cap; the general effect is always the same; while the union continues, the members of the association feel a particular confidence in each other, which leads them to believe each other's opinions, to catch each other's passions, and to act in concert on every question in which they are interested."
"Hence arises what is called bigotry or illiberality. Persons who are united on any occasion, are more apt to believe the prevailing opinions of their society, than the prevailing opinions of another society. They examine their own creeds more fully, (and perhaps with a mind predisposed to believe them), than they do the creeds of other societies. Hence the full persuasion in every society that theirs is right; and if I am right, others of course are wrong." http://books.google.com/books?id=89QDAAAAQAAJ&pg=PA1&...
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I agree with Webster, and disagree with Scott Adams on the reason why parties are bad. The problem with parties is not the money they raise. The problem is the polarization they create, and how each party's interpretation of events becomes warped in a way that makes their own side always right, and the other side always wrong. Overtime it means that both sides end up being half-brained - and no one has the ability to really solve problems.
That said, banning parties is a non-trivial problem. If you just ban the nominal form, they will take some other form under a slightly different name. I think you would have to go all the way and perhaps create a complete ban on campaigning and campaign promises. Rather than having debates and speeches, candidates would participate in nationally televised job interviews that would talk about the candidates background and problem solving abilities.
It may also be that integrating lotteries and randomness into the election would help with the public choice problem. I have thoughts on a better election design here: http://intellectual-detox.com/the-lottery-election-a-better-...