Insanity is doing the same thing over and over expecting different results. -- attrib. Albert Einstein
I am fond of writing, even if you are not fond of reading it again, that I know just enough about law, philosophy and economics to be dangerous, mostly to myself. As it happens, I blogged twice about Bryan Caplan’s new book The Myth of the Rational Voter, acknowledging on both occasions that I hadn’t read the book but was responding only to comments written about it.
Of course, that not only doesn’t pass the minimal standards for scholarship, it doesn’t even pass the minimal standards for journalism. My plea in mitigation is that I am neither a scholar nor a journalist, a fact I make abundantly clear all the time by what and how I write here without needing to confess the fact as well. Still, having wasted so much virtual ink on the subject already (admittedly, a sunk cost), I’m happy to report that I have now, oddly enough, read the book.
This would not usually have been the case so quickly because I do not review books professionally and must therefore either buy them or wait for a library copy. I like buying books, but I am cheap and thus usually wait until they have been remaindered, which means I'm always behind the power curve on the cocktail party chat circuit. In this case, however, I received a free copy courtesy of my older son who, serendipitously, just attended a seminar in which Mr. Caplan was one of the speakers. Indeed, he even inscribed the book to me, which was kind of him but which raises a problem. He wrote in it that I am “a rational man in an irrational society.”
This would be puzzling if I took it as more than a gracious sort of inscription to a stranger. Aside from his lack of evidence about my rationality – we’ve never met and I seriously doubt he reads this blog (we’ll get to society’s irrationality in a minute) – there is the definitional problem of rationality, itself, and it is a problem that underlies Caplan’s argument. Rationality, as economists understand it, is tied very closely to their concept of efficiency, the layman’s version of which is getting the maximum bang for your buck. Caplan also imports the notion that truth seeking, perhaps even apart from its usual connection to efficiency, is an integral component of rationality as well. No doubt, under many conditions these are good operational criteria of rationality. But if the bang you are buying with your buck or your vote is your own subjective sense of well being, not only can ignorance be bliss, so can false beliefs. There is, at least, certainly nothing illogical about such a possibility. Indeed, not only the possibility but the fairly high likelihood that I am, by his criteria, at least somewhat irrational is at the heart of Caplan’s contention.
I move now to the jargon-laden version: Caplan contends that the collective effect of individuals’ systematic biases resulting from preferences over beliefs, when combined with an understanding of democracy not as a market but as a commons, undermines the Public Choice concept of rational ignorance as a means of understanding the workings of democracy. If I tried to explain all these terms, I would fail, so you should read the book instead. (And since you're not cheap, you should buy a copy now.) Still, I'll take a shot at a concept or two.
The rational ignorance hypothesis is easy enough for even dumb guys like me to understand – acquiring knowledge is time consuming and, at least in that sense, expensive, therefore people tend not to acquire more knowledge than they believe they need. People know, despite idiotic “Your Vote Counts” propaganda campaigns, that even if their votes get counted those votes never really count in the sense of altering the results. Thus, they tend to vote, if at all, largely out of ignorance and, as a result, essentially randomly. If so, this is either good or bad, depending on whether you believe the Miracle of Aggregation (the ignorant masses cancel each other’s vote out while the very few people who know beans from bacon make the real choice) or the Gucci Gulf theory that self-serving
But Caplan argues that it isn’t rational ignorance but an ironically ‘rational’ sort of irrationality that is the key to understanding why, for example, voters continue to prefer protectionist policies despite the fact that such policies are not in their or the nation’s best interests. Let's call it the "We can't all be that dumb so we must be crazy" thesis. If democracy is really a commons and not a market, then as with most commons situations there is negligible cost to the individual voter resulting from casting his vote as a method of indulging his preferred beliefs over his desire to opt for objectively rational (that is, efficient) economic policies. Moreover, if voters’ motives are altruistic (or, and here’s your vocabulary building word for today, sociotropic), they have that much less motive to correct their (objectively) mistaken beliefs about the relative efficacy of one economic policy versus another.
Caplan contends that because irrationality and not the prevailing Public Choice hypothesis of rational ignorance better explains these voting patterns and habits, we have “neither well functioning democracies nor democracies hijacked by special interests [but] democracies that fall short because voters get the foolish policies they ask for.” More succinctly, he invokes Mencken’s famous observation that “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.”
As Caplan notes, “recognizing irrationality is typically equated with rejecting economics.” Even so, if it is true that people have preferences over beliefs and that, as a result, they deem irrationality as a good among other goods, then they will in some cases prefer irrationality; that is, they will demand a certain amount of irrationality depending on its price. What he perhaps fails to stress sufficiently is that this is important only in the prescribed sense of rationality economists employ. In fairness, however, he does address the issue:
Many escape my conclusions by redefining the word rational. If silly beliefs make you feel better, maybe the stickler for objectivity is the real fool. But this is why the term rational irrationality is apt. Beliefs that are irrational from the standpoint of truth-seeking are rational from the standpoint of individual utility maximization. More importantly – whatever words you prefer – a world where voters are happily foolish is unlike one where they are calmly logical.
I think this is a critical acknowledgment. Whether it is rational under Caplan’s or most economists’ definition of the term or not, it has been my experience more people would prefer to be happily foolish than calmly logical.
Efficiency, while a dandy instrumental good, is neither an intrinsic nor an exclusive good. (I am using the term good here as a normative term and not as an economic term of art.) That is, there is nothing per se irrational in the sense of being internally contradictory as opposed to merely being less than optimal in terms of efficiency about a normative outlook that holds efficiency to be only one of sometimes competing values. More broadly, I’d simply note that consequentialism is not the only ethical game in town. Say what you will of Kant, you'd be hard pressed to call him irrational.
Caplan makes a few other claims I find questionable; for example, that the Self-Interested Voter Hypothesis is false. It may really be false, but I found his confidence regarding that claim unconvincing and his examples capable of alternative explanations that would still support the basic (and, I think, generally useful) intuition that people, including people acting as voters, act in their own perceived self-interest. However, these sorts of disputes can run a high risk of having the very concept of self-interest turned into mere tautology and, in any case, the point may not be critical to his case. He also invokes his epistemically privileged understanding of his own preferences in evidence against the revealed preference thesis, a sort of introspectionist attack on the nearly universal operational behaviorism of social science. I think there's a good point lurking there, but it needs more development.
Finally, there is the question of who the intended audience is for this book, and I’m guessing it isn’t the likes of me. As mentioned before (and, once again, made abundantly clear), I am not an economist; but I found the claim that democracy is a commons and not a market, once made, both insightful and uncontroversial to the point of being obvious. That is, it is obvious in that "Oh, of course!" way someone else's hard work seems simple once the work is done for you. But Caplan seems to think that both economists and political scientists will find the claim highly controversial, so what do I know? Further, perhaps again because I simply don’t get it because I’m not an insider, it isn’t clear to me what difference between the rational ignorance hypothesis, tweaked a bit here and there, and Caplan’s alternative account would be for practicing economists. Then again, I’ve always found the “rational” part of phrases like “rational self interest,” “rational maximizer,” etc. a bit suspect. On balance, though, this book is an extended theoretical argument aimed at or at least aimed to Caplan's fellow theoreticians.
Theory aside, human society orders itself in all sorts of ways. There is, if you will, a market for markets and a market for democracy. In many cases markets and democracy can and perhaps should compete to determine which works best for people. Caplan contends that “democracy overemphasizes citizens’ psychological payoffs at the expense of their material standard of living.” But assuming there are to be tradeoffs at all, what is the right balance?
Generally speaking, I prefer markets to government and so, obviously, does Caplan. However, in my own case my preferences go at least as much to what I believe would be the psychological benefits of the greater freedom of markets as they do to my belief that I would be better off materially, though I happen to think that would usually be the case as well. But the fact is that I probably would rather be happy than right just as I probably would rather be more happy and less well off materially than vice versa.
Indeed, any other choices would strike me as irrational.