The durability of a two party system has been used as evidence of a popular consensus underlying American politics. Instead, I attribute the failure of third party movements to the American electoral system. By awarding election to the candidate with the most votes regardless of the total cast for other candidates, the simple-majority single-ballot (SMSB) system encourages rational voters to vote for the lesser-of-two-evils, their relative preference among the candidates perceived to have a chance of winning. In an SMSB electoral system, the two major parties will normally drift toward the political center to capture centrist voters needed for an electoral majority. By providing voters on the electoral extremes with an alternative, third parties brake the major parties' progressive moderation. Using election data from Massachusetts in the 1880s, I show that when the state's Republican Party drifted to the political right to hold upper-class voters (the “Mugwumps”), the Greenback-Labor Party attracted disenchanted working-class voters, especially those already mobilized by the Knights of Labor. Frightened by the loss of working-class voters, the Republicans enacted a new era in labor legislation in 1886 including a law providing for a state board of strike arbitration including representatives of labor organizations.