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Virginia’s
recently concluded primary elections have given a
lot of folks (including this writer) to tug their
chins and wonder what it all means for
conservatives, moderates, the GOP and the future
of Virginia politics.
Did
the results reflect unfocused
rage? A movement for change? Payback for the 2004
tax hikes? ... Maybe it was sunspots? It
might have been all of these things at once (well,
except for the sunspots -- that’s still open for
debate). But maybe it was something else entirely,
something that lurks behind all the fact sheets,
white papers, debates and campaign ads, but
isn’t readily apparent. Maybe
instead, the election returns reflected voter
irrationality. That’s
the general thesis of “The Myth of the
Rational Voter,” a new book from George Mason
University economics professor Bryan Caplan.
Caplan argues that when irrational voters get
together on election day, they create a form of
“political pollution,” where the costs of
indulging their individual biases and
misconceptions is shared by everyone… to the
detriment of us all. The
theory flies in the face of most of the accepted
wisdom regarding democracies (republics, too) and
the sovereign citizen. Bad outcomes stem from
special interests, most will say. Poor policies
can be overcome through voter education and a
return to principle, as I’ve often said. But
in “The Myth of the Rational Voter,” Caplan
states that these arguments just aren’t true.
Instead:
In
the naïve public interest view, democracy works
because it does what voters want. In the view of
democracy skeptics, it fails because it does not
do what voters want. In my view, democracy fails
because it does what voters want. In economic
jargon, democracy has a built-in externality. An
irrational voter does not hurt only himself. He
also hurts everyone who is, as a result of his
irrationality, more likely to live under
misguided policies. Since most of the cost of
voter irrationality is external – paid for by
other people, why not indulge? If enough voters
think this way, socially injurious policies win
by popular demand.
I
asked Caplan about his theory recently and asked
him to apply it to some of the issues that roil
Virginia’s politics today. At the top of the
list was immigration. “Immigration
is relatively equal to the trade in goods,” he
said. Right now, Mexico and other countries have a
comparative advantage in supplying nannies and
farm laborers. They come here to do the work; we
get the benefit of inexpensive childcare and cheap
produce. And don’t forget, that with more
skilled women released from the need to care for
their children, they can enter the workforce and
increase their material well-being. It’s a
mutually beneficial trade.” “If
people really want to understand dislocation in
the labor market,” he said, “they should look
at the movement of women into the workforce over
the last three decades. That caused more
displacement and fundamental change than
immigration ever could.” So
why all the hue-and-cry over illegal immigrants?
It’s what Caplan calls the “anti-foreign
bias” – a “tendency to underestimate the
economic benefits of interaction with
foreigners.” In
his book, he mainly discusses how anti-foreign
bias plays out in relation to trade –
specifically, how it leads people to favor
protectionist measures that save jobs, when the
reality is that trade benefits all parties
involved. There
are other biases, too. One is the “antimarket
bias,” where people have a greater tendency to
underestimate the economic benefits of the market
mechanism. Businesses are motivated by profits,
not social benefits, according to this line of
thought. Therefore, businesses large and small are
incapable of providing, let alone adding to,
society’s social health. Caplan
falls back on Adam Smith to make the point that
business and profit are the only effective means
of delivering social benefits. As Smith noted,
many of those benefits are unintentional… the
result of the invisible hand:
By
pursuing his own interests he frequently
promotes that of the society more effectively
than he really intends to promote it. I
have never known much good done by those who
affected to trade for the publick good.
Caplan
notes that in Smith’s day, this was a
counter-intuitive argument. In the intervening two
centuries since "The Wealth of Nations"
was published, it remains as counter-intuitive as
ever. The ingrained bias against profit leads to
all sorts of odd and economically unsound (if not
laughable) policies. Are gas prices too high? It
must be because of an unscrupulous cabal of oil
producers. Sky-high drug prices got you down?
It’s just those bloody capitalists, feeding off
human misery. The fundamental, irrational
ignorance of people regarding market forces leads
them to see malice in places where it simply
doesn’t exist… and ignore social benefits
whenever markets create them. There
are other biases clinging to the barnacled hull of
voters’ minds -- a “make work” bias that
favors creating or preserving jobs over all else,
and perhaps the biggest bias of all, the
“pessimistic bias,” through which people few
the past as good, the present as bad and the
future as even worse. This
is the sort of bias that is truly pan-partisan.
From conservatives who pine for the good old days
while damning the immoral present, to liberals who
see a future mired in environmental apocalypse
and, yes, libertarians who see the dead hand of
the state multiplying behind every tree, shrub and
fencepost, the pessimistic bias is as all
consuming as kudzu. Why
are we so wed to such biases? And why do we cling
to them when the empirical evidence clearly points
in the opposite? Because it feels good. Biases
share certain characteristics with faith – if
you really believe in them, they are true – they
must be true. And that truth provides a sense of
comfort and well being that (almost) no amount of
convincing can overcome. And the more we indulge
our biases, the more likely we are to seek out and
elect politicians who are either our fellow true
believers or who at least say they are. This, in
turn, leads to the adoption of policies -- be it
steel tariffs, immigration restrictions,
anti-price gouging measures or government work
programs – that do us no small harm. Can
all this irrationality be overcome? As Caplan
admits, “My diagnosis implies that administering
a cure will be very difficult. The irrational
majority will oppose any reforms able to make a
large, immediate difference.” He adds,
“Resistance is not futile, but it's not easy. I
don't have any quick fixes - or at least any quick
fixes with a snowball's chance in hell of
happening anytime soon.” But
perhaps in identifying the problem, Caplan has
established a framework for discussing ways to
correct it. Now, we just have to get
more people to admit that they have a problem…
that some of their most cherished beliefs are
actually irrational fantasies… and that things
are really a lot better now than they’ve ever
been (and will only get better, but you probably
won’t notice it). In
other words, solving the problem will take the one
thing that sometimes seems to be in shortes
supply: patience. And yes, that’s my own bias
talking.
--
June 19, 2007
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