Quote of the Week

Bryan Caplan sums up a boiled down version of public choice theory,

The Myth of the Rational Voter)Caplan)In sum, according to Classical Public Choice, voter ignorance transforms politics from a puzzling anomaly into a textbook example of the explanatory power of information economics. Voter ignorance opens the door to severe government failure. Interest groups — not to mention bureaucrats and politicians themselves — walk straight in.

— Bryan Caplan, The Myth of the Rational Voter (Princeton: Princeton University Press, 2007), p. 97.

While Caplan heads down a different route than do public choice theorists, his narrative is also predominately about information and knowledge. Rather than rational ignorance, what Caplan assumes (and spends an entire chapter empirically verifying) is that there’s something about the “public’s” thought process that systemically leads them to come to different conclusions than “experts.” Either way, it’s clear that democracy works best when people are well informed, in the sense of holding a sufficient stock of objectively correct knowledge.

Reading the book reminds me of a passage from an article I recently read,

Self-organizing social systems economize on the knowledge people
need to pursue their goals successfully.

— Gus diZerega, “Market Non-Neutrality: Systemic Bias in Spontaneous Orders,” Critical Review 11, 1 (1997), p. 123.

Somebody might read the various critiques of democratic political theory and suggest that we need more education. A preferable alternative may be to develop institutions that require less information to successfully coordinate citizens’ preferences and political decision making.

  • Dan(DD5)

    “Either way, it’s clear that democracy works best when people are well informed, in the sense of holding a sufficient stock of objectively correct knowledge.”

    Democracy is basically a “Tragedy of The Commons”. – the herder puts his next acquired cow on the land in full knowledge that it damages the common. There is no technical way around this – it’s loot or be looted. There is no knowledge problem or voter ignorance in the sense that it is usually assumed – Most voters don’t understand the nature of things when it comes to government and Democracy – but if they did, it would not solve anything, except perhaps more of them would actively participate in the process of getting “their cow on the land” also.

    • http://economicthought.net/blog JCatalan

      The externalities argument (“tragedy of the commons”) usually works in favor of information-based arguments: either people are rationally ignorant because the price of being wrong approaches zero (the cost of a policy × the probability your vote will be decisive), or people are rationally irrational (Caplan’s theory) for the same reason. The latter is stronger because it allows for people to be well-intentioned. I think the “radical ignorance” argument is even stronger, but I’ll leave this for a review of Caplan’s book.

      • Dan(DD5)

        Ok, so this: rationally irrational is logically impossible. Clarify this position. What you’re probably doing here is using the term “rational” to mean two entirely different things and to make things worse, in the same sentence!

        You probably mean: rational (in the Caplan sense of the term) “irrational” (action that is allegedly against one’s own interest, as is often meant when someone is said to be acting “irrational”).

        However, if the above interpretation is correct (and you have to clairfy due to your illogical statement above), then you are misusing the the example of the “tragedy of the commons”. People are not rationally “irrational” in the tragedy of the commons. On the contrary, they are perfectly acting rationally from start to finish – they are always acting out of self interest to maximize their own gain. This is rational behavior by every definition of the term.

        • http://economicthought.net/blog JCatalan

          It’s not my term. For the sake of his argument, Caplan defines rationality as the “search for truth.” Irrationality would be ends that don’t fit within this category. Caplan’s theory is that as the cost to irrationality falls, people have a lesser incentive to “search for truth.” Instead, they can vote in ways that satiate other ends, like the psychological feeling of thinking well of yourself. So, people vote in favor of things like protectionism. The strongest evidence in Caplan’s favor is that the median “unenlightened” voter holds a position very different from that of the “enlightened” voter, meaning that there’s something that systemically leads voters to certain voting preferences.

          I don’t understand, though, your point of “misusing the example of the tragedy of the commons.” If anything, there’s a difference in the definition of irrationality (which shouldn’t matter, as long as we define our terms).