According to the diagram back a bit, didn't that happen back in the 1820s? Also theres the predecessors to the Republican party. Though it was probably less a collapse than an evolution.
I'll admit my American history isn't the strongest, but I'd always seen the First Party System as more of an extension of the debates surrounding the founding of the nation than a genuine and fully developed party system. It's worth noting that it's very hard to pin down when the Democratic-Republican party was even founded, and the Federalist party was generally opposed to party politics at all (see
Washington).
Heh, problem with instant-runoff though, it'd elect the centrist candidate every time. 2-party system becomes a one-party system, no?
Not really.
Let's say you have three candidates, Left, Right and Centre. Voters tend to be split 35/35/30 in their first preferences. Both Left and Right prefer a Centrist over the opposite while Centrists tend to be split depending on the conditions surrounding the election.
Because the Centre candidate will have the least votes to start with they will be first eliminated, with the split of their voter's second preferences deciding which of the other two win.
You only see Centrists winning a majority of the time when they are taking more votes in the first round than one of the parties on the wings (when they still represent the preferences of a majority of the population), or if there are multiple centrist parties soaking up the votes as other parties get eliminated.