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Friday, June 12, 2009

Reading List: The Myth of the Rational Voter

Caplan, Bryan. The Myth of the Rational Voter. Princeton: Princeton University Press, 2007. ISBN 978-0-691-13873-2.
Every survey of the electorate in Western democracies shows it to be woefully uninformed: few can name their elected representatives or identify their party affiliation, nor answer the most basic questions about the political system under which they live. Economists and political scientists attribute this to “rational ignorance”: since there is a vanishingly small probability that the vote of a single person will be decisive, it is rational for that individual to ignore the complexities of the issues and candidates and embrace the cluelessness which these polls make manifest.

But, the experts contend, there's no problem—even if a large majority of the electorate is ignorant knuckle-walkers, it doesn't matter because they'll essentially vote at random. Their uninformed choices will cancel out, and the small informed minority will be decisive. Hence the “miracle of aggregation”: stir in millions of ignoramuses and thousands of political junkies and diligent citizens and out pops true wisdom.

Or maybe not—this book looks beyond the miracle of aggregation, which assumes that the errors of the uninformed are random, to examine whether there are systematic errors (or biases) among the general population which cause democracies to choose policies which are ultimately detrimental to the well-being of the electorate. The author identifies four specific biases in the field of economics, and documents, by a detailed analysis of the Survey of Americans and Economists on the Economy , that while economists, reputed to always disagree amongst themselves, are in fact, on issues which Thomas Sowell terms Basic Economics (September 2008), almost unanimous in their opinions, yet widely at variance from the views of the general public and the representatives they elect.

Many economists assume that the electorate votes what economists call its “rational choice”, yet empirical data presented here shows that democratic electorates behave very differently. The key insight is that choice in an election is not a preference in a market, where the choice directly affects the purchaser, but rather an allocation in a commons, where the consequences of an individual vote have negligible results upon the voter who casts it. And we all know how commons inevitably end.

The individual voter in a large democratic polity bears a vanishingly small cost in voting their ideology or beliefs, even if they are ultimately damaging to their own well-being, because the probability their own single vote will decide the election is infinitesimal. As a result, the voter is liberated to vote based upon totally irrational beliefs, based upon biases shared by a large portion of the electorate, insulated by the thought, “At least my vote won't decide the election, and I can feel good for having cast it this way”.

You might think that voters would be restrained from indulging their feel-good inclinations by considering their self interest, but studies of voter behaviour and the preferences of subgroups of voters demonstrate that in most circumstances voters support policies and candidates they believe are best for the polity as a whole, not their narrow self interest. Now, this would be a good thing if their beliefs were correct, but at least in the field of economics, they aren't, as defined by the near-unanimous consensus of professional economists. This means that there is a large, consistent, systematic bias in policies preferred by the uninformed electorate, whose numbers dwarf the small fraction who comprehend the issues in contention. And since, once again, there is no cost to an individual voter in expressing his or her erroneous beliefs, the voter can be “rationally irrational”: the possibility of one vote being decisive vanishes next to the cost of becoming informed on the issues, so it is rational to unknowingly vote irrationally. The reason democracies so often pursue irrational policies such as protectionism is not unresponsive politicians or influence of special interests, but instead politicians giving the electorate what it votes for, which is regrettably ultimately detrimental to its own self-interest.

Although the discussion here is largely confined to economic issues, there is no reason to believe that this inherent failure of democratic governance is confined to that arena. Indeed, one need only peruse the daily news to see abundant evidence of democracies committing folly with the broad approbation of their citizenry. (Run off a cliff? Yes, we can!) The author contends that rational irrationality among the electorate is an argument for restricting the scope of government and devolving responsibilities it presently undertakes to market mechanisms. In doing so, the citizen becomes a consumer in a competitive market and now has an individual incentive to make an informed choice because the consequences of that choice will be felt directly by the person making it. Naturally, as you'd expect with an irrational electorate, things seem to have been going in precisely the opposite direction for much of the last century.

This is an excellently argued and exhaustively documented book (The ratio of pages of source citations and end notes to main text may be as great as anything I've read) which will make you look at democracy in a different way and begin to comprehend that in many cases where politicians do stupid things, they are simply carrying out the will of an irrational electorate. For a different perspective on the shortcomings of democracy, also with a primary focus on economics, see Hans-Hermann Hoppe's superb Democracy: The God that Failed (June 2002), which approaches the topic from a hard libertarian perspective.

Posted at June 12, 2009 23:07