"Liberty is to
faction what air is to fire."
Parties are a way people with similar ideas can join with others to express their opinions. Factions and parties form because not all people think alike; conflict and differences of opinion seem to be natural to humanity.
Supressing disagreement, or prohibiting peaceful forms of conflict, can often lead to a loss of liberty. If dissenting views are denied the right to be heard, violence can be the alternative.
The genius of the American model of democracy allows people to freely express what they think, thus working out conflicts with words instead of weapons. By necessity, consensus and compromise are embedded into the American system.
No one side will always win, and some people will disagree with the majority. But, if everyone has had a say, and the rights of the minority are respected, then most people are willing to accept the decisions made, using peaceful means to express any differences that may remain.
Political Scientists say that organized political parties serve two major purposes: INTEREST ARTICULATION and INTEREST AGGREGATION.
Translated into ordinary words, Interest Articulation means that parties define and express a group's needs and wants in a way that the public and political system can understand.
Interest Aggregation means the process by which a party brings together various viewpoints on an issue. A party develops enough common ideas among enough people so that pressure can be brought to bear upon the political system.
This process usually results in two major centers of political power. They might be the US two-party system, or they may be like the shifting majority and opposition coalitions seen in the multiparty systems of many European nations and in Israel.
This process does not always work perfectly. In the USA, the appearance of strong third parties is usually a sign that the major parties have become unresponsive to the public.
New parties are often very effective at Interest Articulation. They tend to be very visible and assertive about expressing what they believe in. But, independents and third parties in the US have traditionally suffered from not having enough members to be effective at Interest Aggregation. They can express their views, but have trouble creating the "big tent" that the major parties use to bring about change.
In America, third parties have traditionally held the role of protest vehicles. Third parties arise when a group of people believe that the major two parties have become unresponsive to their needs. Many independent candidacies and third parties fulfill the important role of bringing an issue to the public eye that has been neglected by the major players.
However, before the issue can be resolved, it usually has to be "adopted" by one of the major parties. Over time, third parties and their ideas tend to be reabsorbed into whichever major party is willing to listen to their issues.
For example, in the 1890s, the Populist Party was one of the best known third parties in America. By the early 1900s, some ideas of the Populist Party were absorbed into the major parties, which then enacted many Populist ideas into law (including the direct election of US Senators and the Federal Income Tax). In the present day, some of the goals of the Reform Party (such as a balanced budget) are being absorbed by the major parties.
The American system is not entirely fair to third parties. Campaign finance laws and restrictions on ballot access also make it hard for third parties to develop and thrive in the US. However, in nations such as Italy or Israel, where multiparty systems thrive, it sometimes takes a coalition of many parties working together to form a working government. So in effect, even multiparty systems usually develop two major political centers of power--the majority ruling coalition and the "principled opposition."
There has been only one third party in US history that succeeded in rising to become a major party and winning the Presidency: The Republican party, which reached major party status in 1860 with the election of Abraham Lincoln.