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Unpopular opinion: ranked choice voting will do little to solve the USA's democracy issues.
For starters, there are plenty of countries that do use FPTP and still have plenty of third parties in their parliaments (Canada, UK, Taiwan, Australia off the top of my head). So FPTP does not inherently preclude third parties - rather, the USA simply doesn't have any culture of multilateralism. I'd say this is mostly a byproduct of various cultural phenomena - the wealth gap, corporate media ownership, private campaign financing, win-or-lose mindset, etc.
But the greater issue is that RCV doesn't really ensure proportionality. As long as you have a single winner from each district, there will be distortions between the proportion of parties for whom people vote and the ultimate parliamentary body. For example, even if you implemented RCV across the entire USA today, I'm pretty sure most legislative bodies would still be entirely dominated by a single party because of gerrymandering and single-member districts.
So if you want to fix the USA's core issue, what you really need is a more proportional system - either have fewer, larger districts with multiple representatives from each one, or adopt something like MMP which is what Germany has (where you also cast a party vote to declare your preference for which party you most want represented in parliament and distribute proportionally along this tally across all voters). Not only does this make the final representation more fair, but it also does a much better job of making all votes matter, instead of only the lucky few in swing states or the rare competitive Congressional race.
But RCV on its own won't do much. It is still a small improvement, and if you have the opportunity to adopt it, I say go for it. But at best, I think it would take decades, or maybe even generations, before it starts to improve things.
Also, while I know this doesn't pertain quite so much to Presidential elections as the electoral college is used for, the USA is also fairly unique in that it has a directly elected head of government with much more power than other countries that also have a directly elected head of state. This is also a part of the problem - the executive branch is supposed to be the weakest of the 3 Federal branches - but it's a discussion for another time.
Canada and UK third parties are still smaller parties, they have no possiblity of electing a head of state.
Same as I wrote on the other sibling comment. I think these countries all have terrible electoral systems. But the point is, they're still ahead of the USA in terms of the fact that they will still have an awareness and understanding of third parties, whereas >90% of Americans are just programmed to believe there are only 2 options.
As a thought experiment, ask yourself what would happen if you could wave a magic wand and make every city, state and national legislative election use RCV over FPTP. Do you really think anything would change? I'm pretty sure 95% of the results would be exactly the same. Like I said above, RCV may make things better 20+ years from now, but there's also a very good chance that so few people actually use their second options that it nothing ends up changing at all. This is why I think multi-member districts or MMP are better solutions.
Are you forgetting Ross Perot almost won? There is constant talk of Trump starting a third party, libertarian and green parties get a fair amount of attention, and not to mention the fact that the two major parties actually consist of many smaller factions in a coalition. There's a reason primaries happen, and often congressmen vote against the majority of their party and votes are split on other lines than party lines. Most people are smarter than is popular to say on the internet, they just understand voting the lesser of two evil is their best option right now from a certain perspective. I prefer to vote third party to increase the viability of third parties in later elections.
While also true in Australia, we have preferential voting as well and whilst smaller parties dont have the numbers or votes to become the ruling parties you can vote 1 for a smaller party and 2 for a major party so the smaller party gets a funding boost for future campaigns.
And also if enough people vote for a smaller party them a larger party may have to team up with a smaller party to get the majority numbers to hold government.
Then the smaller party may have a bit of clout to get some of their values and opinions into parlimertary debate or passing bills meaning we get a wider variety of input than the major party line and its members falling into line to vote with their peers blindly.
I contest your usage of Canada as an example. While it's certainly not as polarized as the US, the effects of FPTP are still prominent. There's a ton of vote splitting at the federal and provincial levels. Eg, conservatives rule Ontario despite the majority of people voting for one of the two left-er leaning parties, since the two parties basically split the left vote down the middle, while conservatives only have one party.
I do completely agree that propositional voting is waaaaay better than ranked choice, though. Personally, I will take almost anything over FPTP, but some form of PR is vastly superior, as you noted.
But at least with ranked choice, people can start to vote for another party without it feeling like a penalty. As a Canadian, I basically have to vote strategic. I don't get to vote for my favourite party because of FPTP. Ranked choice would at least remove that issue.
I think the two party system of the US is basically where FPTP systems are all at risk to end up, especially since voting strategically gradually results in that. But the US GOP is so crazy that it's almost a necessity for any progressive to vote strategically, whereas at least in Canada, things aren't quite as bad, which makes it easier for people to take the risk of voting for who they really want to.
Look at third parties and their success in the UK and Canada.
The last general election in the UK was 2019. Conservatives got 43.6% of the vote but 56.2% of the seats. Labor got 32.1% of the votes and 31.1% of the seats.
The biggest national third party, the Liberal Democrats, got 11.6% of the vote but a mere 1.7% of the seats.
In comparison, look at regional third parties. The Scottish National Party got 3.9% of the vote and a whopping 7.4% of the seats. Irish regional parties like Sinn Feinn and the Democratic Unionist Party got a combined 2.3% of the seats with a combined 1.4% of the seats.
Previous elections have been quite similar. In 2015, the far right UKIP won only a single seat after getting a whopping 12.6% of the vote.
Canada is quite similar. The Bloc Quebecois consistently gets more votes than the national New Democratic Party, despite having gotten less than half as many votes.
Understood, all of these countries have terrible electoral systems, that was not my point. My point is that Americans only have a culture of voting for one of two parties, so switching to ranked choice voting will likely change nothing at all, because Americans already practically never even consider alternate options. Hell, I doubt even 10% of them could even name a third party, so why would they consider voting for them all of a sudden just because of the switch to RCV? They're constantly blasted with the same message that you have one of two options, so chances are that they'll just pick one and ignore the rest, just like they do now.
Parties work a bit differently in the US vs e.g. Israel.
In Israel, party insiders choose their politicians. If you want different candidates than an existing party is offering, you have to make your own new party with your own new list.
By contrast, in the US, parties run primary elections where voters pick the candidates. The specifics depend on the state, but in most states the election is held for registered members of that party.
Americans aren't idiots. Most know third party candidates don't do well in plurality elections. So smart progressives, alt-right etc. politicians don't run as a third party candidate against mainstream Democrats and Republicans. Instead, they primary an incumbent Democrat or Republican, like Alexandria Ocasio Cortez, or join the primary when the incumbent retired like Marjorie Taylor Greene.
Somewhere like Israel, Alexandria Ocasio Cortez and Joe Manchin would be in two very different parties. In the US, they're in the same party.
In places where RCV is passed, you absolutely see more candidates running and getting decent percentages of the vote. Because that isn't a terrible strategy any more. Someone like AOC might have run as a Progressive or something rather than primarying the Democrat.
It might give independents more of a voice.