Systematic Voter Biases about Economics

A review of
The Myth of the Rational Voter: Why Democracies Choose Bad Policies
(Author: Bryan Caplan)

In his critique of democracy, libertarian economist Bryan Caplan asserts that voters are worse than ignorant – they are irrational, and vote accordingly.  His focus, unsurprisingly, is on economics:

The reason why I emphasize economics is that it is at the heart of most modern policy disputes. Regulation, taxes, subsidies—they all hinge on beliefs about how policy affects economic outcomes. The modal respondent in the National Election Studies ranks economic issues as “the most important problem” in most election years. In fact, if you classify “social welfare” issues like welfare, the environment, and health care as economic, then economic issues were “the most important problem” in every election year from 1972 to 2000. Biased beliefs about economics make democracy worse at what it does most.

Caplan uses data to show that people are systematically wrong about several issues:

1. People don’t appreciate that private profits benefit the general public
2. People don’t appreciate the benefits of free trade
3. People think employment (of any kind) always trumps productivity
4. People are generally more pessimistic than the facts support

Since voters are systematically irrational, Caplan argues, the outcome is bad government. Voting leads to policies that, on balance, hurt the interests of the electorate.  Individual voters are never “punished” for having irrational beliefs (as they are in the private sector whenever they purchase an inferior product); rather, the costs are spread across society.

People intuitively recognize the near pointlessness of casting a vote.  “My vote doesn’t matter.”  Caplan reminds us that one vote is mathematically unlikely to change an election.  And it is technically correct that, if the expected value of one’s vote is less than the cost of studying the issues or even of dropping by the polling place after work, then it’s not rational to do either.  If, hypothetically, I were thinking about my vote and knew the current vote totals were 787,423 to 787,423, and my own imminent vote was going to decide the outcome, then of course that would focus my mind and I would work hard to make the best rational choice.  But since that is never the case (Caplan goes on), voters’ choices are driven by other motives, such as personal passions (or illusions), or conformity with identity groups, a.k.a. being liked.

Just some personal observations about voter motivations…  I think the spiritual importance of voting is heightened if you’re unconcerned or skeptical about an afterlife.  Small though one’s vote may be, it’s one of the few ways that one has to affect this world.  (Kids are the other major way, and of course there are yet other ways that a few people get involved in politics.)  The effects of a national election on a citizen’s life are generally miniscule compared to other decisions in their lives.  Their tax bill might change by a few dollars… the probabilities of nuclear war, job growth, or abortion restriction may change or perceive to be changed by a couple percentage points.  Certainly the stakes for a small minority of individuals are higher, such as gun manufacturing employees, immigrants, etc.  But votes are most commonly about where you want to see society to go, rather than about your own personal fate.

I must confess that I am always a little suspicious of libertarian views.  I appreciate how intelligent many libertarians are.  But I can’t get Ayn Rand’s Atlas Shrugged out of my head, and I generally regard that as ludicrous; and so there is an unfortunate mental association.  More than that, though, is that libertarians often seem to exclude important considerations from the discussion.  For example, regarding Caplan’s four areas of voter misapprehension, I can easily think of simple questions that Caplan never adequately addressed:

1. People don’t appreciate that private profits benefit the general public

   Seriously? Does this mean that people would be happy to see the private sector abolished? And, separately, what about the distribution of benefits, is that not relevant?

2. People don’t appreciate the benefits of free trade

   Benefits in aggregate, certainly—but shouldn’t we care about the suffering of citizens who lose their jobs to offshoring?

3. People think employment (of any kind) always trumps productivity

   Don’t they have a point: that, in this society, joblessness causes immense suffering? Also, does economic “productivity” capture the value of non-paid work?

4. People are generally more pessimistic than the facts support

   Isn’t wanting things to be better a useful reflex? Shouldn’t politicians feel the public’s frustrations?

My intent is not to pooh-pooh any of the four issues;  I’m merely suggesting the economic perspective is pretty one-dimensional.

Potential remedies that Caplan discusses at the end (besides dramatically shrinking government, his favorite libertarian remedy for everything) include: promoting more economics education; giving extra votes to people with greater economic literacy; and eliminating efforts to increase voter turnout.

As to the value of economics education, he cites Steven Pinker, who has argued that education should prioritize cognitive skills that are most important for grasping the modern world and that are most unlike the cognitive tools that people are born with.  Economics would certainly seem to qualify.

As for Caplan’s aforementioned epistocratic ideas about the vote (which could never gain popular support), he provides this defense:

Most worries about de jure or de facto changes in participation take the empirically discredited self-interested voter hypothesis for granted. If voters’ goal were to promote their individual interests, nonvoters would be sitting ducks. People entitled to vote would intelligently select policies to help themselves, ignoring the interests of everyone else. There is so much evidence against the SIVH, however, that these fears can be discounted. The voters who know the most do not want to expropriate their less clear-headed countrymen. Like other voters, their goal is, by and large, to maximize social welfare. They just happen to know more about how to do it.

In any case, I am all in favor of trying to eliminate systematic biases like those listed by Caplan, via voter education. And why just limit it to those biases? What about racism and sexism? What about negative attitudes towards experts and public servants?  Or towards welfare recipients? What about people’s normal susceptibility to rhetorical ploys?

In the end, I’m not sure Caplan gives us much direction.  I am reminded of economist Alan Blinder’s recent work, Advice and Dissent (my review forthcoming).  Both men believe economists are generally right about policy matters; a difference is that Blinder, with direct experience in government, knows how naïve economists are about politics.  Caplan can only berate democracy, clearly wishing that economists could run things without interference from ignorant, irrational voters.