28 Comments

Friedman does a version of this "four ways to spend money" in "Free to Choose".

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Seems like a strong argument for the most limited government possible. The more that decisions are left to the individual, the more rational those decisions will be.

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Alternatively, transparent and metric-controlled governance principles. Some have found best metrics for wellbeing above all else in this article (from the left, but can easily parity with free-market principles too) https://philosophybear.substack.com/p/psychometrics-as-a-solution-to-many

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Re: "There are two reasons that voters do not engage in error correction. One reason is that one person’s vote almost never affects the outcome of an election. It does not pay to invest effort in figuring out what went wrong and trying to correct it."

A conundrum arises. Let me extend Arnold Kling's logic upstream. If a person has reason to believe:

(a) It doesn't pay to invest in error-correction after an election because her vote almost never affects the outcome of an election anyway;

then she also has reason to believe:

(b) It almost never pays to try and form accurate beliefs (about facts and social causality) when voting in an election.

One may then ask: Why does she vote at all? (Keep in mind that voting takes time and trouble. For example, there is evidence that weather affects turnout.)

Let me conjecture two partial answers:

1. A psychological explanation: cognitive dissonance reduction. "I have a duty to vote (and my peers expect me to vote). My vote won't change the outcome." This makes her head hurt. She finds peace of mind by voting (and talking up her vote with peers); and then unconsciously dodges the rest.

2. A rational-choice + counter-wishful thinking explanation. If a voter believes that the stakes are super-duper-high in the election, then she has a utilitarian reason to vote even if she believes that her vote has a super-low probability of determining the election outcome. (Multiply the super-duper-high stake by the super-low probability.) Now, it is plain that "the base" of voters in each rival party persuades itself that the stakes in major elections (esp. presidential elections) are super-duper-high. The psychological mechanism seems to be a deep desire to fear the worst (counter-wishful thinking). Another mechanism seems to be an irrational belief that the election is a "winner-takes-all" competition. However, these beliefs become partly rational, to the extent that they become self-fulfilling through polarization and raising the stakes.

Note: A sound polity will have a constitution and institutions (decentralization, separation of powers, checks-and-balances, individual rights, etc.), which tend to temper the stakes in any given election. But even the Founders failed to contrive adequate bulwarks against their nemesis, “faction” (partisan political parties).

Another important complication:

A voter rarely invests in careful belief-formation, and in error-correction, about complex facts and social causality. Instead, she invests in *deference.* Healthy democracy rests on wise deference (easier said than done). Alas, new information technologies and polarization dynamics favor pursuit (consumption) of moral outrage, rather than cultivation of wise deference.

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Sometimes I get the sense that the author has not researched the topics he writes about and comes at these problems from first order principles that most economists find useful. While the principles are often useful, the insights seem lacking because there is undoubtably a vast literature on voting, preference aggregation, political systems, etc., which considers the problems presented above.

Another example is the post about welfare. There are welfare systems across the Western world, some much more successful (reintegrating workers into the economy after losing employment by supporting them while they look for work or retrain) than those found in the USA. Does the author's own prescription for the issues with American welfare align with the systems that are generally considered successful?

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Unfortunately, the idea of "welfare" in are article is very regionalized. The most successful forms of welfare would often have performance metrics for evaluation purposes, which make governance clear and easy (right coat, trying to aim for the right price).

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Excellent post....one of your best in my humble opinion

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Your argument points to democracy itself as the problem. Or maybe democracy plus the shaky epistemological foundation as in todays society. There’s no going back to the mostly elitist democracy of the founding, and who knows whether that would even be better these days. What is the solution? Educational choice and reform? Anything else?

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The problem is less democracy than it is making decisions for lots of people at once that everyone has to then follow (one size fits none), and the decision makers not spending their own resources on paying for the decision.

The primary solution would be to stop making ever more private individual choices public group choices. Smaller government.

The secondary solution would be to migrate as many decisions that are public down to smaller levels of government, in an attempt to increase transparency and accountability. Additionally that has the benefit of many different decisions being possible and thus experimentation.

Mostly though, the answer is stop governmentalizing everything.

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I believe my objection to your claim of voter irrationality is that it seems to undercut your point, which I agree with, that "collective choice is bad choice".

The distinction is important because if we assign the problem to the wrong place, we're likely to get the wrong solution. If we say, "voters are irrational", then we shouldn't get to vote. Period.

This is my point from that initial comment. Voters are irrational is a direct path to taking away power and rights from voters.

If we're rational, but we have clumsy methods of collective decision-making, or we're making decisions collectively that we should make individually, those are problems that rationality can address.

When I taught, I always gave the example of buying food. The more people you have to eat with, the more you have to compromise on what you want. If we collectively decide to have a class party and can only order one food, what do we get? Likely pizza... the most generic food that everyone likes. Maybe instead we could order tacos to be catered.

In any case, a class vote on the kind of food is, of necessity, going to be generic, crowd pleasing food. It's the median voter theorem. Maybe we get pizza. Maybe we get tacos. But we probably won't be getting steak au poivre with a side of freshly made pommes frites.

My point is that given the collective action framework, the pizza/taco vote is still rational. If we declare the class to be irrational, then I just commandeer the money and order something myself. The collective action problem just gets replaced by an authoritarian paternalism.

On the other hand, if we use our heads, we suggest a Bring Your Own Food party. We wouldn't suggest this, if we said people were irrational though, because we'd expect them to be eating the chalk.

Again, I don't think there's disagreement that our other rights are being taken away and that's bad. What I'm saying is that the consistent trend behind taking away those rights is to say that we're incompetent to exercise them. Claiming voter irrationality is just another step in this direction.

Nor is there disagreement that voting is often ineffective. But the problem here is that voting has become more ineffective, not that it ceases to be rational. Make voting more effective and it will be more rational.

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I don't think the argument is that voters are irrational. It's that it is rational for voters not to spend any time or effort on voting because their individual votes really don't matter.

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> “I do not respect your rationality as a voter.”

The direction of causation is crucial. If we are rational, the solution is to make our votes matter. Change the scope of collective action to better control outcomes. Give voting more power so that it becomes rational spending time on it.

However, if we are not rational, we essentially are incapable of self government, and all of those other freedoms are undercut too.

In fact this is exactly the problem we are all facing. I know you are trying to say “but we are rational in individual decisions “ but when you look at the reality of our political trajectory there is a straight correlation between the diminution of our other rights and the diminishing of our voting rights. If you throw out the bath water of rational choice, the baby (our claim to other individual rights) goes with it.

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I don't think that follows. If we are rationally irrational when voting, that is, we don't bother to use rationality when voting because the outcome isn't affected by us individually, then as a group we can vote badly. Part of that bad outcome seems to be voting for government to make decision for us, which it does badly. Yet we can be perfectly rational as individuals who can't by ourselves change the voting process.

To keep going with the food metaphor (which I used too, high five!) if we all are going to vote to get the same thing at whatever restaurant we go to, once there are a bunch of people it doesn't make sense to even look at the menu, because no matter whether you pick the best thing you are going to get whatever the majority votes for. So go nuts, vote for whatever, even if it isn't on the menu, and spend the time saved chatting with your buddy. But everyone does that, and suddenly you get some random crap some low percentage of people wanted, possibly the first thing on the menu or some vegan crap a strict minority wanted. In order to get the best possible outcome everyone has to spend a lot of energy discussing and debating, not to mention learning, and since a good outcome might not even be feasible (can't please more than a minority) no one bothers.

In a sense your point about taking away rights because we are incompetent to exercise them is appropriate. Government is terrible at making a wide variety of decisions, entirely incompetent, so we should take away their right to decide to make those decisions. Individuals are terrible at assigning new decisions for governments to decide on, entirely incompetent, so they shouldn't be allowed to vote for that. I.e. many, many things should be entirely off the table of things to be decided by government. You might even go so far as to say that only very specific things should be decided upon at the large group level, with everything else being left to the individual, or perhaps smaller groups.

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A big problem with libertarian thought (and I'm guilty of this too) is that we refuse to acknowledge that there are many levels of sub-optimal decisionmaking. Some of which are much more sub-optimal than others.

That is, the common refrain here to this issue (which I don't disagree with!) is "Yeah, this is why we should have an extremely limited government and more individual rights and decisions".

Yes, but that rather begs the question, doesn't it? In a sane world, we'd all go to the restaurant and order what we wanted. Of course. But that's not the world we're in, so there's a whole range of different possible outcomes.

Even under idyllic circumstances of governance, some decisions would still need to be made collectively. Some will probably, even under good circumstances, be decisions that should be made individually.

In those cases (which end up being a lot of cases), I don't think it's a reasonable or helpful response to throw up our hands and complain that "voting isn't rational". As with the food analogy, there are a lot of different approaches to voting, and even though they're at some level all inferior to "everyone pays for themselves and orders what they want", there are some that are clearly better than others.

By ceding that argument altogether, we leave ourselves to the mercy of people with really bad ideas. I think this is why, even though there's some element of rational irrationality to voting, most folks generally don't truly "vote" for whatever. We scan the menu, quickly note the presence of "vegan bacon lasagna", warily eye the weirdo across from us, and order the chicken. We don't spend much time on it, but we still choose rationally.

More importantly, we could employ a lot of different strategies to improve our outcomes, even if we can't get to to individual order and pay ideal.

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I think you might be reading into my comment what isn't there, and making assumptions about what must be that need not be made. Which is a total "shit philosophers say" way of saying I actually disagree on a lot of points, sorry :D

Saying that "Yea, government should be limited because it is bad at making many decisions but people mistakenly think it isn't" doesn't beg the question, unless I am really misunderstanding what your question was. It does not rule out that many collective decisions need to be made, or that some decisions will be made collectively that should be done individually. Rather, it suggests that we need to be very cognizant of what is better collectively, what is better individually, what level of collective is better conditional on being better collectively, blah blah.

It is at least possible that mostly the best thing to do is say "Guys, why are we decided things this way? It would be better to do this instead!" and perhaps at some point say "No. We are not going to lock ourselves into your bad 'Let's all vote and order the same thing' plan. Here's 20,000 pages of reasons why it sucks."

So it isn't ceding the argument, although I might be completely missing what you are arguing. Rational irrationality doesn't rule out people voting rationally, it rather explains why so many people don't. Some people do the best they can, but unless a REALLY big majority of voters decide really hard that working to do their civic duty to learn a whole lot before voting is what they must do, it doesn't matter: the majority vote for silly shit, because they believe silly shit, because believing silly shit feels great when it has no bearing on your reality that you see. Even smart people believe silly shit for that reason; less reasonable people that can't apply enough rationality to deal with their immediate life have almost no chance.

Am I understanding your argument, though? My brain kind of feels like cheese today.

The trouble with changing how we vote for things is that all of them have many of the same problems, just with different sub-problems. Primary, none solve the collective action problems of rational irrationality and single decisions across multiple dimensions leading to vastly sub optimal outcomes.* The criteria for collective decision making is when the actual group benefits from deciding together outweigh those costs. Going to war? Probably worth it. Picking what to eat for dinner? Almost certainly not. Everything else is in between.

*For an example of that last, if there are say 3 types of ice cream and 10 people vote to see what type to order for everyone, unless there are extremely lopsided preferences you are unlikely to get most people what they would want. Add in a second choice, so order two types and let people pick, gets you a lot farther, but of course you are practically at individual choice at that point, and you have introduced allocation problems (you ordered 10 dishes, half strawberry and half chocolate, but what happens when 8 people want chocolate? How to allocate?)

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Well... let me try a different approach. Even if we limited our discussion to things we agree should be solved by voting, there would be a lot of room for efficiency gains in how we vote.

1. Collective decision-making is bad is because, as you say, we needlessly aggregate multiple decisions into a single voting dimension. The basic conditions today are radically different than those that spawned the basic representative government concept where we elected one guy to travel across the country by horse to represent us on every matter.

If I have to hire people to make decisions for me, there's no reason I should be limited to one. I'd probably do better by paying a separate security officer, educator, and doctor than I would paying one guy three times as much to fill every role.

Collectively voting on health care might be inferior than individually buying it, but given that we're going to collectively do it, I'm a lot better off getting to vote on a specific healthcare representative than I am if I also have to consider how the healthcare representative will vote on every other issue.

2. While all voting methods have problems, it's clear that some methods are better suited to some problems than others. In your example, your addition of the second choice of ice cream is still a net improvement over only one choice of ice cream. And a run-off election between the top two vote-getters in the first round (although every system can be gamed) is, as you say, an improvement over a simple plurality.

Likewise, you get very different cost results if the vote is "vote on what are we going to eat (and everyone must pay an equal share of the bill)" than you do with "vote on what we are each going to pay (and then everyone may choose accordingly from the menu)".

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Most (all?) voters do not research the candidates, their Party policies, weigh the pros and cons of each in order to reach a reasoned conclusion on which will provide the greater benefit. The cost would be too high to do so. Voting without knowing the benefit, is irrational. Since the voter has incurred no cost however, a vote which might/might not produce a beneficial outcome is like gambling without having to put up any stake money. If you win, great, if you don’t no loss. I suppose that is rational.

I personally don’t incur the cost of research because the chance of my vote making any difference and gaining me any benefit to balance against the cost, is zero. If I don’t vote and get my preferred candidate, then my vote wasn’t necessary, and if I do vote but don’t get my preferred candidate, it was a waste of time. So the outcome for me preferred or not, is irrespective of whether I vote or not, therefore I don’t vote - it makes no difference. I consider by not voting I am rational; anyone voting in my view is irrational. Of course some might say if everybody chose not to vote what then, to which I would reply, in that case I would vote as my one vote would get me what I wanted. If we were rational as a Body Politic, nobody would vote and that would get rid of Government.

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Actually, once few enough people voted, votes would matter quite a bit, and voters would have rational reasons to invest the effort to become adequately informed. E.g., if only 50,000 people voted. Perhaps in a rational society, only a few hundred thousand people would vote; the marginal value would almost certainly be negative well before turnout got into the tend of millions, but it wouldn't be 0.

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As a proportion of the population the small number would give nobody legitimacy to Govern. The idea is - no voting. Whilst there is voting and a huge public purse extracted from the populace by coercion, there will be corruption - the voted for will offer plunder to the voter who wants as much of the plunder as they can possibly get. Our so-called democracies are just structures wherein the members of society can plunder each other. Once enough people realise this, we shall be on the way to Government-free society. Unfortunately welfare is a heady drug, and the welfare State an expert pusher.

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Also, there's no reason we can't chose what we vote on. Switzerland has referenda on all sorts of things, up to and including tax policies, and it works quite well.

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Switzerland works pretty well, but I'm pretty sure the U.S. is too big for something like that to work. Scale matters.

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Tyranny of the majority is still tyranny and no better than tyranny of a minority.

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"If we were rational as a Body Politic, nobody would vote and that would get rid of Government."

Hardly. We would get even more autocracy.

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Autocracy is prevented by democracy which invests an equal share of power in each individual so power is not concentrated and nobody has power over another. This is sovereignty of the individual, self-government with Common Law, customs, tradition, for governance, private property and rule of law. We move to a social market like the economic market where specialisation and division of labour makes us interdependent, and with no overall authority, planning or control. Public goods become individualised, rather than collectivised, there is no taxation. There is then no structure for the autocrat to colonise and collect rents.

We have autocracy/tyranny because we allow it, because public goods have been collectivised by the State and people are stupid enough to believe the get more out than they pay in, which sustains the notion that the State is essential and a benefit and anything else will be chaos. But chaos is the natural process by which spontaneous order emerges - like capitalist free markets.

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OK, I doubt this goes anywhere, but I always ask it when confronted with the spontaneous order question. Let's take as a given that if "we wipe the slate clean" and get rid of "the State" there will be a period of chaos from which a spontaneous order will emerge. What makes something "an order" is that it'll be persistent. If we destroy it, it'll just come back in pretty much the same form over and over again, right?

But... that's the nature of the State. Every time a State gets wiped out, there's a period of chaos followed by the reemergence of the State.

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I don’t recall a State ever being wiped out. There has only ever being a replacement of the head - absolute monarch to revolutionary committee to dictator to so-called democratic Government. The chaos to which I refer is the chaos of the market, not the chaos of civil war or insurrection. Wheat gets from the field to your table as bread in a chaotic process from which spontaneous order emerges, which rests on cooperation for mutual benefit. And no, ‘order’ is not persistent, it is a temporary state and fluid because nothing is controlling it, it is dynamic, changes according to variables. The supply/demand/price process is the chaos of the market. If demand goes up, price increases which reduces demand and stimulates supply which narrows the gap between supply and demand which in turn reduces price. Order comes spontaneously but it does not persist; the order will always change due to variables.

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