So I've been dipping into Bryan Caplan's Myth of the Rational Voter. It probably represents the state-of-the-art in marketeer thinking, and addresses voting which is an issue I've messed around with here before. It's a well reasoned and written book as far as it goes, but it's breathtakingly biased itself -- in favor of economists and against humans. Underlying it is an assumption that economics is an actual science, with objective results that have the same epistemological status as the findings of physics or biology. I've got news for Caplan -- the economics Noble is a fake Nobel, and economics, while certainly a valuable field of study, is not science, and people may disagree with its findings without being ignorant, stupid, or crazy.
Here's a synopsis of Caplan's argument:
- voters are astonishingly misinformed (this, unfortunately, is true)
- BUT, that might not be a problem if voters ignorance expresses itself randomly. In that case, aggregation will result in the ignorance averaging out and the small fraction of well-informed voters will end up determining the result (YAY).
- BUT, voters are not randomly ignorant, they are systematically ignorant or biased (BOO)
- the evidence for that bias is that they disagree in surveys with the views of Ph.D. economists (WHA?)
See what happened in that last point? Somehow, reality is what the academic field of economics says it is, and if you disagree with them, you are wrong.
The breathtaking smugness and arrogance of this position is really quite something, especially when it gets expressed about specific issues, such as protectionism and downsizing. Downsizing, to the marketeer, is an unalloyed good -- the corporation is performing its function while cutting costs, thus increasing profits and efficiency, la di da. "Every time we figure out how to accomplish a goal using fewer workers, it enriches society, because labor is a valuable resource". This is true from the bird's eye view of society, from the systems perspective, from a global perspective. Markets reward and encourage efficiency, downsizing is result of this process. OK. But nowhere does Caplan even deign to acknowledge the rather fundamental fact that individuals do not take the global view. Individuals are concerned with their own well-being, and so might not take as cheery a view of downsizing as a tenured economist or a Wall Street analyst. And this is perfectly rational. To the ordinary laboring shlub, someone Caplan has apparently never met and never thinks about, the gains in market efficiency are distant and theoretical while the loss from downsizing is immediate and devastating.
Here's what's weird -- I thought economics was all about individuals pursuing their own selfish ends, and through the magic of the market weaving those myriad local, selfish goal-seekers into collective wealth generation. So why is there an assumption that when someone goes into the voting booth, they should forget about their own interests and only be interested in some abstract, global concept of economic efficiency? I find this really weird. Caplan believes that when voters stroll into a voting booth, they should vote against protectionism because that is what's good for the abstract entity called "the economy", not because it's in their own particular self-interest. Somehow this quasi-libertarian marketeer has become almost communist in his assumption that people should be putting the good of society over their personal self-interest.
Maybe I'm missing something, since I haven't read the whole book in detail. But nowhere in the first few chapters do I see any acknowledgment that individuals might have a perfectly rational interest in policies that diverge from maximizing the global efficiency of the market.