Sunday, May 27, 2007

So much for democracy...

Bryan Caplan, an economist at George Mason University, has attracted notice for raising a pointed question: Do voters have any idea what they are doing? In his provocative new book, “The Myth of the Rational Voter: Why Democracies Choose Bad Policies,” Caplan argues that “voters are worse than ignorant; they are, in a word, irrational — and vote accordingly.” Caplan’s complaint is not that special-interest groups might subvert the will of the people, or that government might ignore the will of the people. He objects to the will of the people itself...To encourage greater economic literacy, he suggests tests of voter competence, or “giving extra votes to individuals or groups with greater economic literacy.”

I'm on with that, though I'd be nervous about just what "economic literacy" is supposed to be. But would it be paternalism? Roughly, paternalism means preventing people from getting what they want "for their own good" but that poses the question of what is is to prefer a given option. If we go with ordinary usage I think people do operate according to an "informed preference" notion: we talk about what people "really" want and that assumes, if not perfect information, enough to make decent educated guesses.

Some people have enough information but make what most regard as bad decisions anyway. Some know the costs and risks of smoking but smoke anyway. Stopping them would be paternalistic. However if Caplan is correct, when it comes to policy most voters don't have a clue:

Caplan’s own evidence for the systematic folly of voters comes from a 1996 survey comparing the views of Ph.D. economists and the general public. To the exasperation of the libertarian-minded Caplan, most Americans do not think like economists. They are biased against free markets and against trade with foreigners. Absurdly, they think that the American economy is being hurt by too much spending on foreign aid; they also exaggerate the potential economic harms of immigration.

The foreign aid issue is the most glaring: some time back a survey indicated that the average guess Americans made about the percentage of GDP the US spends on foreign aid was 23% when it's a little over 0.1%. There was also a poll indicating that 17% of Americans believed that they were in the wealthiest 1% of the population and another 17% were confident that that some time in their lives they'd get there.

Now this is simply factual error that could easily be fixed--not a matter of religious beliefs, "values," or tastes. The remarkable thing is that politicians, obsessed with focus groups, spin, and propaganda have been so reluctant to set people right by stating, and repeating, simple facts. It would be easy enough to set citizens straight on these matters: charities make a fuss about how "for just pennies a day" you can feed a village or send a child to school--why don't politicians? Are Americans opposed to taxes as a matter brute fact or do they simply assume that taxation isn't cost effective? Seeing how it looks from the ground it looks like the latter. Here is the public, imagining that they pay almost a quarter of their income in taxes to feed, clothe and shelter ungrateful "natives" without much effect, and even more to finance local "welfare queens," while "for just pennies a day" private charities do a better job without waste and corruption.

Sometimes though it isn't simple facts but educated guesses about the consequences of various policies. Still, politicians seem peculiarly bad at getting inside the heads of voters and maybe more importantly refuse to recognize that they're rational choosers with legitimate goals. Americans recognize that the US health care system is broken but resist a single-payer system. Why? Because they imagine that it will impose a huge financial burden (not taking into account the savings on private insurance schemes and improvement in efficiency) and that what they'll get is rationed, meatball medicine: long waits for appointments and every visit to the doctor's office like a trip to the DMV, shuffled through an impersonal system, waiting in a grim holding pen to get perfunctory attention from government functionaries--like black-and-white films of immigrants on Ellis Island being screened for TB.

They imagine that immigrants will turn their neighborhoods into dangerous slums, reeking of greasy food, with families sitting outside at all hours of the day and night screaming to one another in foreign languages, young toughs hanging on street corners harassing women and dirty little shops lining the streets. They believe that Bad Guys, domestically and abroad, are out to get them and that only brute force, and lots of it, will keep them in check. They believe that lowering the drinking age and legalizing marijuana will turn the country into the beach at Spring Break. They believe that strictness, corporal punishment and rote learning will make their kids decent, educated, productive citizens. They believe that taxes are little more than tribute to politicians and don't pay for any services that benefit them apart from police, prisons and the military, that government by its nature is corrupt and inefficient, that grassroots efforts, volunteerism and neighborliness will solve social problems, and that common people exercising commonsense can always do better than experts and careerists. They believe--judging from a pro-Walmart propaganda film--that Walmart is a benefactor of the working class and that rich elitist liberals, offended by Walmart on aesthetic grounds, want to close down cheap, efficient big-box stores to make way for over-priced boutiques and health food shops.

If I believed any of these things I'd vote differently--but I don't. Maybe I'm mistaken about some of the facts. One way or the other though it is a matter of facts and not of "values" or tastes, and that can be fixed.


Anonymous said...

On the topic of the resistance to the single-payer medical coverage, Americans may be right in assuming that any governement solution will be designed and implemented to allow spending the maximum amount of money through well-connected contractors and, ultimately, will not work.

Probably, since FDR, this country has not had a good track record of government projects that actually accomplish their goals. If even when given enough money the city cannot make the buses run on time, why would it be more successful with providing health coverage?


H. E. said...

Is there any reason to believe that it would be less successful than the current grossly inefficient scheme that bankrolls insurance companies and private providers and delivers substandard outcomes at a high price?

Even assuming that the US government hasn't had a good record of delivering--which I'd dispute--why compare health care in 2007 with bus service or New Deal projects in 1937 rather than with current health care delivery systems in Canada, Western Europe and Japan right now?

BTW a single-payer system as I understand it is precisely one that doesn't provide services through contractors, well-connected or otherwise, but employs doctors and nurses as civil servants. What we have now is precisely a system that channels government funds through well-connected contractors, and it doesn't work.

Anonymous said...

I totally agree that we have approached a tipping point when our private healthcare system is worse than any service that government is providing. I have not heard, however, anybody advocating seriously to nationalize hospitals and hire doctors as civil servants. Mostly what is being proposed is basically extending Medicare/Medicaid to the whole population. And implementing that without an effective oversight system will result in complete abuse of the system by healthcare providers.

This kind of system may work and does in many countries, but in those countries buses also seem to arrive on time and building a new bridge does not take 20 years and 10x initial budget. I don't know if it's cultural or if Americans are lacking some kind of bureaucratic mechanisms that make democracy accomplish something efficiently in real life (as opposed to endlessly debating topics like abortion or gay rights).


H. E. said...

Here's a very nice piece: "Why Doesn’t The US Have A European-Style Welfare State?" Harvard Institute of Economic Research Discussion Paper Number 1933 at

No one now is advocating a nationalized system because it's not politically feasible to get it through. Krugman certainly advocates it as a goal down the line. The hope is that by proceeding incrementally it will eventually become feasible.

I'm not sure where these broken bus systems are but I've had a much better time dealing with our local public transit than with privately owned airlines. The current administration has had 6 years to try out its a priori doctrine that privatization, deregulation and competition are always efficient, and that dogma has been empirically falsified. Deregulation of utilities here in California resulted in black-outs, brown-outs and higher prices a couple of summers ago. Charter schools were a bust. Outsourcing in the military, hiring mercenaries and contractors who weren't accountable, has been an expensive failure

Government does some things better and the private sector does other things better--it's an empirical question what's most efficient in which circumstances, and it also seems to me clear that relying on a priori dogmas, whether libertarian or Marxist, makes a thorough mess of things.

The endless debate about abortion, gay rights and other peripheral issues goes on because most progressives haven't had the guts to come out as economic populists, to affirm their commitment to continuing the agenda of the New Deal and the Great Society, or even to whisper, "welfare state."

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