Dumb voters

By Buttonwood

ONE of the joys of reading widely is that you can come across interesting ideas that make you think again. (I've been reading Steven Pinker's brilliant new book on violence which I want to blog about when I've finished it.) But another book I've come across is The Myth of the Rational Voter: Why Democracies Choose Bad Policies by Brian Caplan which was written back in 2007.

The idea is not original, although it is far from universally accepted. It takes time and effort to become informed about public policies. The chances of any individual's vote influencing an election outcome is virtually zero. Therefore it's not worth voters taking the time to make a judgment; they are "rationally irrational". As Mr Caplan points out, for most people a belief system that denies the theory of evolution or postulates that the world was created 6000 years ago, has little negative consequences on their daily lives; they can still function as a motor mechanic or shop for groceries. As a Republican Presidential candidate, indeed, such beliefs are positively beneficial. So people believe what they want to believe unless forced to change their minds by some event in their lives (not likely when it comes to evolution*).

Now economists don't like the idea of people being irrational, although it seems self-evident to mere history graduates. And even if they are irrational, wouldn't their irrationalities cancel each other out? Efficient market theorists take a similar line; stupid investors are just random noise, smart investors bring prices in line with fundamentals. But Mr Caplan shows that voters have systematic biases in one direction.

Indeed, there are some interesting polls which show the problem. About half of Americans do not know that each state has two senators and three-quarters do not know the length of their terms. Around 40% cannot name either of their senators. More importantly these "ignorant" voters have different opinions than informed voters (ie. those who do know the political basics). The ignorant voters have a series of biases - anti-market, anti-foreigners, an inclination to pessimism and what Caplan calls a make-work bias, being against economic changes that boost prosperity but threaten jobs in the short-term. (Some may struggle with this last one, but without efficiency gains in the economy, we'd all still be working on the farm.)

Now one could say this is an economist's bias; members of the profession like people who think like them. But it's not just stuff like free trade, A poll by the Kaiser Family Foundation in the mid-1990s showed that 41% of Americans thought that foreign aid was one of the two biggest items offederal expenditure; its actual share of the budget was just 1.2%. The biggest single item of expenditure was actually social security (pensions). But only 14% of Americans placed it in the top two.

There is no reason to suppose that Americans are any different from anyone else in this respect; they just have more opinion surveys. But it does show the difficulty for democracies in coping with the aftermath of the credit boom. Public policy decisions were difficult enough when economies were booming; it is even harder when we are sharing out the pain. It helps explain why Greece and Italy have turned to technocrats.

* Except for MRSA patients, perhaps. How did the staphylococcus aureus become methicillin resistant? Ah yes, they must have been intelligently designed as a kind of afterthought; a product relaunch of creation.