Some time ago, I read about a concept called the dialectic method of reigning (or similar). Imagine there is a monarch reigning over an absolutist country. A revolution is going on, and he fears loosing his power. A parlament is formed, and several political parties spring up. What does the monarch do? According to this dialectical method, instead of aligning with one party, he should secretly give support to both left and right wing parties. Cleverly using his connections and his money, he can direct the whole of the state. E.g. if the political system moves to far left, he withdraws support for that party. Due to the constant quarrel, a) the political programs of both parties will tend to the middle, reducing the risk of extreme positions, and b) the state will be in need of a unifying figure, which would conveniently be the monarch.
Now, I think I originally read about this in the context of conspiracy theories. One guy or group is sitting in the background, controlling everything. But of course this concept also works without an actual conspirator (which is actually more interesting).
The main idea is just that you have several competing alternatives that seem very different, but are actually very similar when viewed from a distance. They form a false dichotomy, stabilizing the whole. People are too occupied fighting in the system, preventing them from ever questioning it.
What is this idea called? Where does it come from, and can you give me some literature tips about it?
(Note, the focus is not on the well-known fact that parties in a two-party system tend to converge to the middle (the median voter). Rather, its on the effect of false dichotomies as a dominance mechanism.)