In The Myth of the Rational Voter: Why Democracies Choose Bad Policies (Princeton University Press, 2007), author Bryan Caplan looks at evidence of voter rationality from an economist’s point of view. What Caplan finds in the data is a consistent difference of opinion between professional economists (econs) and non-economists (non-econs). Caplan starts with survey data related to opinions about factors that affect the economy. Econs and non-econs rarely agree. Caplan asks why there’s such a consistent difference and what effect that can have for democracy.
Chapter one opens with Caplan’s observation that “What voters don’t know would fill a university library.” After that, things get interesting. Caplan raises the defense of voter ignorance called “rational ignorance.” Econs like the idea of rational ignorance because econs want to believe (are biased to believe) that people think and act rationally. That idea posits that it is rational for voters to be ignorant because their vote has no impact on election outcomes. After all, major elections are never decided by a single vote.
The logic behind that false vision of reality holds that “democracy can function well under almost any magnitude of voter ignorance.” The flaw in that logic assumes that voters don’t make systematic errors. The econ’s bias was that random errors are random and therefore mistakes in voting cancel each other out.
Systematic errors abound: It turns out that voters’ errors are far from random. Voter errors are usually systematic, not random. The argument that ignorance is rational turns out to be irrational. Voter errors may not affect a voter personally or in a way that they can directly see or feel. Nonetheless, voter misunderstandings do have demonstrable adverse impacts on societies. Regarding bad policy choices that voters can generate, Caplan puts it like this: “When a voter has mistaken beliefs about government policy, the whole population picks up the tab.”
Voters perceive realities through a lens of pervasive reality-distorting biases that underlies much of the difference of opinion between econs and non-econs. They include one or more of four major biases that tend to affect public opinion on most economic issues. The four biases are:
(1) an anti-market bias that causes people to underestimate market forces’ capacity to harmonize private greed with the public interest,
(2) an anti-foreign bias that causes underestimation of the benefits of foreign trade and immigration,
(3) a make-work bias that overestimates the adverse impacts of labor-saving technology and automation, and
(4) a pessimistic bias that leads to underestimation of current economic conditions, often expressed as a nostalgia for earlier times with conditions not as good as people usually imagine they were.
Economists have not been completely ignorant of systematic public biases about economic issues. The pre-industrial revolution economist and philosopher, Adam Smith, observed that “science is the great antidote to the poison of enthusiasm and superstition.” These biases are old and they run deep and across cultures.
Caplan acknowledges a problem. There is deep public resistance to disquieting knowledge, e.g., the destructive existence and power of the four biases. That kind of knowledge undermines personal beliefs and most people flatly reject it or rationalize it into insignificance. Regarding the make-work bias against automation, Caplan observes: “These arguments [in favor of automation] sound harsh. That is part of the reason they are so unpopular; people would rather feel compassionately than think logically.”
CRITICISM 1: Caplan is aware of and addresses common criticisms of economists and their opinions. He acknowledges that expert econs can be biased and can be wrong when the non-econ public is right. He also observes that both can be wrong, but that both can’t be right. Caplan points to public resistance to what social science is telling the public about human cognition and he fully expects the same flames of public rejection to scorch econs and their opinions.
CRITICISM 2: Two common beliefs about econ bias holds that econs express a self-serving bias because they are (1) privileged, well-off academics with protected jobs, and/or (2) ideologically biased in favor of businesses and wealthy people. Caplan goes through the data and finds that the econ bias can account for at most 20% of the difference of opinion between econs and non-econs. If there is systematic bias among econs, it isn’t the major source of opinion differences. The data argues that, if anything, econs are less far right in their political ideology than non-econs. And, the data shows that non-econs with increasing information or knowledge express usually opinions closer to econ opinion. Knowledge, or lack thereof, explains more of the econ vs. non-econ opinion split than systematic econ bias.
Caplan includes an appeal for economists to drop their indefensible lingering disbelief in irrationality and get on with accepting and dealing with the reality that the concept of the rational voter is a myth.
B&B orig: 9/26/16
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