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The Myth of the Rational Voter, part II
Bryan Caplan's book is one of the two or three best books on public choice in the last twenty years, do buy it; Greg Mankiw agrees. I am in accord with Bryan's major arguments, namely that voters are irrational (as distinct from merely underinformed) and that this explains the quality of American government. Nonetheless it is interesting to outline residual points of disagreement...
1. Bryan shows that education is the best predictor of what makes a person think like an economist. This will create problems for his next book, which is a critique of education. He also urges professors to teach better; he is again putting his faith in education.
2. I'm amazed that the public is as rational and smart as it is. Few people demand that our leaders resort, say, to the tools of superstition, even though many people believe in astrology. Our political irrationality is highly selective and self-serving in a "feel good about ourselves" way, rather than indiscriminate. I don't understand what, in Bryan's theory, prevents voters from satiating in irrationality, with truly dire social consequences. He writes of "a demand for irrationality" in stripped down Beckerian fashion, but the model in the back of his mind has a great more structure in it than the book lets on. The sheep on the cover, for instance, do not play a formal role in the model of the book, even though conformism both eggs on and constrains real world political irrationality.
3. Voters are less irrational in many northern European countries. I don't agree with their socialistic view of the world, but in epistemically procedural terms they are making a much greater effort to get at the truth and put that truth into their vote. What accounts for such a difference?
4. Bryan comes dangerously close to agreeing with me on broad matters of politics. I think public opinion, for better or worse, is often a constraint on what is possible; that is why Henry Farrell described my view as "big government libertarianism." Bryan sees opinion as a variable to be manipulated, but he could equally well consider it as a constraint. His proposal to take more matters out of democratic hands begs the question of how this could be possible, given current public opinion.
5. Bryan underrates the irrationality of many private decisions. He views "decisiveness" as the most important quality in predicting the quality of an individual choice. I think that even if our elections were up to one decisive voter, that voter would still choose lots of batty policies or politicians. I view pride and self-image as the most important features in predicting the quality of an individual choice. When our pride is at stake, we often self-deceive and make bad and irrational choices, even when we are purely decisive. I'm not convinced, for instance, that most people make very rational decisions about marriage. Or status goods, or giving to charity. In these cases people often "look the other way" when they should be exercising their critical judgment.
Here is the book's introduction. Note that my criticisms, even if they are correct, do not puncture the major theses of the book.
Posted by Tyler Cowen on April 25, 2007 at 06:30 AM in Economics | Permalink
Comments
Does this mean you think voters less rational than consumers? That would be odd.
Posted by: tom s. at Apr 25, 2007 8:04:39 AM
Consumers can be irrational too, buying goods which are not in their best interests just as they vote for parties which are not in their best interests.
This can be exaggerated, and I disagree that most voters are irrational; even if some are misinformed most vote in accordance with what they believe to be their best interests. Hence, despite the irrational factor, democracy works - just like the free market works despite occasional consumer irrationality.
If voters are irrational, not under informed, why are their better informed European counterparts considered more rational?
Posted by: Stephen at Apr 25, 2007 8:39:56 AM
I've long felt that the main benefit of democracy is not "representing the will of the people", since this is mostly meaningless. Rather, it is to make it as difficult as possible for the psychotic personalities we call "politicians" to interfere in our lives.
If this thesis is correct, we should perhaps be making *more* public decisions through democratic processes.
Posted by: Guyren Howe at Apr 25, 2007 8:47:05 AM
His proposal to take more matters out of democratic hands begs the question of how this could be possible, given current public opinion.
It doesn't "beg the question," it raises the question.
I agree that standard philosophical usage of "beg the question" makes no sense, but it's still the standard, and should be respected by academics.
Posted by: The Other Brock at Apr 25, 2007 9:07:17 AM
"Bryan shows that education is the best predictor of what makes a person think like an economist."
I wonder if all education is equally weighted in this. I would guess the English, Communication, or Education majors would not think much more like an economist than a HS graduate. Some majors may even provide a step backward.
Posted by: Tom at Apr 25, 2007 9:41:41 AM
Does this mean you think voters less rational than consumers? That would be odd.
What's so odd about it? The rational, well-informed voter gets the same government as the person who votes for the candidate with the nicest ties.
- Josh
Posted by: Wild Pegasus at Apr 25, 2007 9:59:44 AM
Josh - I guess I miswrote.
I didn't mean it would be odd for voters to be irrational.
Our hosts generally have great faith in the rationality of us in the populace, at least when it comes to our consumer behaviour (see AT's recent posts on the sub-prime market for example), yet seem to be sceptical of our rationality when it comes to our voting behaviour. It seems to me that this is a contradiction (and therefore "odd").
Posted by: tom s. at Apr 25, 2007 10:21:33 AM
Tom is right about certain majors. I have an M.A.Ed, the acquisition of which was similar to the 8th grade in its intellectual demands, and the ideological underpinnings of modern educational theory are decidedly leftist and are thoroughly grounded in unreality. There is very little understanding of, and even open hostility to, the application of basic economic ideas to education.
Posted by: CEM79 at Apr 25, 2007 10:29:43 AM
Consumers can be irrational too
Of course we can. Seen any advertisements lately?
Our hosts generally have great faith in the rationality of us in the populace, at least when it comes to our consumer behaviour (see AT's recent posts on the sub-prime market for example), yet seem to be sceptical of our rationality when it comes to our voting behaviour.
The mistake is to trust in the rationality of consumers.
Posted by: Anderson at Apr 25, 2007 10:41:08 AM
Tyler_Cowen, I disagree with you here:
1. Bryan shows that education is the best predictor of what makes a person think like an economist. This will create problems for his next book, which is a critique of education.
I don't see what problem you're referring to. Bryan_Caplan's argument regarding education is that it
reveals intelligence and productivity, but does not add to it.[1] Therefore, the people with more
education today are statistically more intelligent to begin with. "Thinking like an economist" would thus
be correlated with "more education" because they are both caused by the third factor, "being more
intelligent", not because education itself causes one to think like an economist.
[1]With the usual caveats about it only referring to education above a certain level, and the maximum possible change being positive but small.
Posted by: Person at Apr 25, 2007 11:04:21 AM
Possibly of interest given the topic: Tom Sawyer and the Construction of Value
Posted by: Bernard Guerrero at Apr 25, 2007 11:13:50 AM
The irrationality of the consumer is somewhat held in check by the greater feedback the conumer has versus the voter. If irrationality leads me to buy the wrong pair of shoes, discomfort when I wear the shoes will probably keep me from making that mistake again, and I will buy shoes more rationally in the future. Hoever, the complexity of the political system and the difficulty of measuring the outcomes of policy mean that I could vote irrationally all my life and never figure it out.
Posted by: sourcreamus at Apr 25, 2007 11:32:48 AM
Does this mean you think voters less rational than consumers? That would be odd.
Why would that be odd? Every economist thinks that. It's self-evident.
Posted by: Noah Yetter at Apr 25, 2007 11:53:56 AM
Voters are irrational,I agree
But investors?
Dow: 13,000
Euro all-time high vs. dollar
Posted by: jcm at Apr 25, 2007 1:06:55 PM
sourcreamus - it sounds like you are arguing that there is a lack of information when people vote, not a surplus of irrationality, which is different.
Noah - ditto, I think. Obviously voters are a subset of consumers, so it would be odd to think of them acting rationally in one sphere and irrationally in another. This seems a different claim from the idea that we act with different amounts of information and different amounts of feedback.
Posted by: tom s. at Apr 25, 2007 3:03:01 PM
I haven't read Caplan's book yet, but allow me to make an observation concerning the comments.
I don't know that it would be all that odd to imagine that consumers act rationally whereas the subset of consumers known as voters doesn't. The obvious reference is the concept of bounded rationality. I may have very well defined desires with regards to running shoes (in the sense of their being reflexive, transitive and complete), yet have less well defined preferences with regards to, say, education (see the "Tom Sawyer" paper) and have really poorly defined preferences with regards to politicians.
Posted by: Bernard Guerrero at Apr 25, 2007 3:32:17 PM
"Does this mean you think voters less rational than consumers? That would be odd."
I'm confused, did you say this backwards?
Posted by: josh at Apr 25, 2007 3:43:36 PM
josh - voters and consumers are mostly the same people so an inequality in either direction would be, I would think, odd.
Posted by: tom s. at Apr 25, 2007 3:50:50 PM
- but Bernard Guerrero's comment makes sense.
Posted by: tom s. at Apr 25, 2007 4:16:18 PM
Re: Tom Sawyer study - I know that graduate students and underegrads are a sort of captive guinea pig for researchers, but does anyone think they are representative of a broad segment of the population?
Could someone replicate the research with some people who have lived and worked for some period of time outside of the university?
Posted by: fiona at Apr 25, 2007 5:05:13 PM
"I'm not convinced, for instance, that most people make very rational decisions about marriage. Or status goods, or giving to charity."
Well, there's a teaser. I'd be interested to hear Tyler's views on these, especially the last.
Posted by: jonm at Apr 25, 2007 5:43:24 PM
Do people vote for the individual or the policy? Lots of these studies regard voting as referenda on the policies politicians put forth. The problem is that this isn't how people vote: many of them vote for the individual they feel most likely to represent them well, or are voting against The Other Guy. In modern American politics, it's as often the latter as the former.
And sometimes I'll vote for someone I disagree with if they get One Big Issue right and are likely to deliver on it, versus someone I agree with more, but who are wrong on The Big Issue, or are generally ineffective.
Also, irrational does not equal illogical...
Posted by: Foobarista at Apr 25, 2007 7:32:20 PM
Read the book to find out why its rational for voters act more irrationally than consumers.
Alex
Posted by: Alex Tabarrok at Apr 25, 2007 8:19:08 PM
Read the book before rushing to comment???
Next you'll be asking us to pause and reflect.
Posted by: tom s. at Apr 25, 2007 8:29:35 PM
tom s. is right that it's odd to call voters irrational while believing in their rationality as consumers. the claim is poorly constructed. it should read "it is rational for agents to behave with extreme carelessness when it comes to voting".
Posted by: Phoebe at Apr 25, 2007 8:47:39 PM
The rational consumers even if they are in the minority are free to make their own choices in consumption (and can even lead the market). With democratic Government the majority rules no matter how irrational individuals are all stuck.
For example: I think that a Honda is a better car than a BMW or a Mercedes Benz (now for a male looking to attract woman this may not be so). The rational millionaire next door buys the Toyota but he gets stuck with the majority’s irrational ethanol subsidy.
Also
The Northern Europeans seem more trusting and less emotional that say, my ancestors, the Sicilians who seem down right paranoid in some ways and thus sometimes demonstrate an attitude that I better get them before they get me. Could be genetic???
Having lived in Latin America the Latins seem paranoid and perhaps with good cause. I think that the more paranoid a society is the more destructive their Government tends to be.
Posted by: Floccia at Apr 26, 2007 10:14:41 AM
Having one irrational belief does not mean that the person must have irrational beliefs about everything. Believing in a JFK conspiracy does not mean that one has to believe in leprechauns.
The lack of punishment for irrationality in voters means that they have no incentives to gain information. Lack of information is probably a bigger problem than Caplan thinks but lack of incentives is a much bigger one.
Posted by: sourcreamus at Apr 26, 2007 4:30:09 PM
In the context of these comments, does irrational mean anything more than "I think they are wrong"? There is nothing irrational about, for example, protectionism, if you feel that ensuring that keeping the attentions of the elites of your country focussed on your country outweighs the economic losses. There is nothing irrational about basing your government decisions on astrology if you believe that astrology is true. If you mean that they are ignoring logic - not comparing their preferred policies commutatively, for example - then I agree that that would be irrational, but most of the comments here appear to assume that increases in directly measurable wealth are the only things of any importance, and any policies which are not for that are irrational.
Posted by: Rob Spear at May 1, 2007 2:08:02 PM
"I wonder if all education is equally weighted in this. I would guess the English, Communication, or Education majors would not think much more like an economist than a HS graduate. Some majors may even provide a step backward."
Like Marketing Majors ...
I fully agree that voters (and consumers, and individuals) are irrational in so far as they don't think through their decisions far enough. They ARE rational in the short term (based on their beliefs of what is going to happen), but if they had a longer view, they would likely back different choices.
It's like chess. How far down the line you can see changes what kinds of moves you're likely to make. Average people (ie, basically all of us) don't have the capability of seeing far enough down the road, nor of taking into account enough factors, that would allow us to make what would seem (from a purely objective viewer who had all the info) to be a rational choice.
That goes for voters and politicians alike. There is no escaping it. It's human nature. And neither degrading nor upgrading the level of democracy in a system is likely to make dramatic differences in the level of the overall irrationality in the system.
Posted by: Saij at May 2, 2007 11:09:33 AM
Hi there. I actually live in Northern Europe (Germany). As to point number 3 (northern Europe's more rational voters), hasn't it occurred to Tyler that Europe's policies might be more redistributionist (or 'socialistic', as he puts it), precisely *because* its voters are more rational?
After all, if you were behind a Rawlsian veil of ignorance, would you prefer ending up as a low-skilled worked in the United States or in, say Sweden? In one country, you are guaranteed excellent healthcare (I know it's excellent in Germany because I use it myself). You get 6 weeks of paid vacation. You get some of the best schools in the world for your children. Beautifully-designed cities. Very little crime. Strong unions. A comprehensive social-welfare system that protects you in the event of adversity, and will provide a comfortable retirement for you even if you don't put much aside yourself. These social welfare benefits, in turn, greatly reduce economic pressure, freeing you to make a much more healthy work/leisure tradeoff than is possible to most mid- to low-skilled American workers.
In return for all this, you will have to pay higher taxes, and live in a less dynamic econony. But since you (rationally) don't believe you're going to somehow become wealthy during your life, you won't be misled by 'class warfare' propaganda dished out by millionaires on TV. You also (rationally) understand that your taxes benefit everybody, a lot, at the same time, when they are plowed into well-run programs that make you and your community safer.
Isn't voting 'socialistic' actually quite rational, under these circumstances? And could that, perhaps, explain why there is a social-democratic party in just about every country on the face of the earth except for the United States?
Just some food for thought.
Posted by: Andrew at May 2, 2007 1:30:31 PM
From reading the post and the comments I have a few things to say regarding "economist thinking" and "education".
What makes an economist's "way of thinking" any better than that of say, a school teacher's? When was the last time economists all agreed on something? Supply-side economics seems to be rather popular with politicians these days and yet the past ten years of government-supported laissez-faire capitalism hasn't "trickled down" much at all to the middle class or the poor. In fact, the gap between the rich and the poor is greater than ever.
So please, if you're going to reference "an economist's way of thinking" let us know which economist to use as a frame of reference (e.g. Friedrich Von Hayek or John Maynard Keynes).
Also, just because someone has "been educated" does not mean they are better informed regarding politics. The educated still rely on the quality of the educator. Then there's the fact that your "education" resides in history, politics resides in the present, and political decisions are measured in the future. An "educated" person could very well be poorly or misinformed regarding any given issue.
We live in an age of subtleties and specialties. The best a voter can do is to vote for the guy who they think will defer to the expertise of others when making decisions, asking questions, or drafting legislation. The politician we should all fear most is the one who always believes he knows best. The voters we should fear are of a similar caliber.
-Riskable
http://riskable.com
"A closed mind cannot open another."
Posted by: Riskable at May 29, 2007 2:58:47 PM
After all, if you were behind a Rawlsian veil of ignorance
But Andrew, I'm not.
Posted by: Bernard Guerrero at Jun 14, 2007 5:36:35 PM
The irrationality of the voters deals much with education. Not only do the news media and the overall spirit of the times play large roles in how the electorate views politics, but its education, or lack thereof, does also. I hope to get my hands on this book soon so I can look at the irrational electorate from a market perspective. Indeed I just blogged about it.
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Posted by: 謝文豪 at Apr 2, 2008 2:30:32 AM
