Just Darts Since 2009
What a waste of time.
June 6, 2007Posted by on
I read a paper by Bryan Caplan called “The Myth of the Rational Voter.” (It’s a .pdf file) (The introduction is here in html.) Reading the paper wasn’t the waste of time, but it did lead to it. Here’s how.
The paper begins:
In theory, democracy is a bulwark against socially harmful policies. In practice, however, democracies frequently adopt and maintain policies that are damaging. How can this paradox be explained?
The influence of special interests and voter ignorance are two leading explanations. I offer an alternative story of how and why democracy fails. The central idea is that voters are worse than ignorant; they are, in a word, irrational—and they vote accordingly. Despite their lack of knowledge, voters are not humble agnostics; instead, they confidently embrace a long list of misconceptions.
This got my back up, and I started marshalling the resources to refute the author before I’d read the entire thing. That was the waste of time. I flipped through the wonderful book The Wisdom of Crowds, to re-familiarize myself with its argument. The book’s author, James Surowiecki, does an excellent job explaining how a heterogeneous group of people of sufficient size can make smarter decisions than the world’s foremost experts.
But then I read Caplan’s article, and I understood what he was saying.
The “wisdom of crowds” argument, in a nutshell, goes something like this:
Get a large group of people together and ask them (for example) how many jelly beans are in a jar. Some people are going to be terrible at this, and their guesses will be way off. The good news is, they will generally be way off in opposite directions and so will cancel each other out. If you run this as an experiment, you’re very likely to find that the average of all the guesses is closer to the actual figure than any individual guess.
And that holds true for many situations, including elections. We all have our biases, and we all have different priorities, but these tend to cancel out and–in general–the right people with the right policies get elected.
What Caplan is arguing is that this doesn’t really apply to electing presidents who espouse good economic policies, because the biases of the electorate all point in the same direction. The don’t cancel each other out. And all these biases point in the opposite direction from established economic theory.
Some of these biased beliefs are:
- High profits are caused by greed
- Foreign trade harms the domestic economy
- Low unemployment is the best indicator of economic health
Caplan calls these the “anti-market” bias, the “anti-foreign” bias, and the “make-work” bias, and I think he has a point. It’s certainly true that the media, politicians, and the man on the street all seem to think that price controls on gasoline are the answer to a spike in prices, and that indicates a general ignorance of the laws of supply and demand.
But Mr. Caplan never really proves the point he made in either the title or the introduction to his paper. He never shows that voters are irrational, only that they are ignorant of economics. When you are an expert in a field, like Mr. Caplan is, you naturally tend to believe that anyone who denies a basic tenet of your discipline is simply irrational, but in his paper he includes charts that show that people with a college education are more likely to agree with economists than the general public is. To me, that’s an indication that the answer to this problem is more likely to be education than psychotherapy.
And if he hadn’t stressed the irrationality of the average man, I wouldn’t have wasted all that time getting ready to argue with him.