In this article from The Economist, Lexington explains how most voters are incredibly ignorant when it comes to most issues. Even if voters are generally ignorant about the great majority of issues, this shouldn’t be a problem. That is precisely why we have a representative democracy — so that someone else can do the thinking, studying and evaluating for us. Nevertheless, voters are also irrational because the political issues upon which they base their votes, if implemented, actually go against their interests.
[There are] four biases that prompt voters systematically to demand policies that make them worse off. First, people do not understand how the pursuit of private profits often yields public benefits: they have an anti-market bias. Second, they underestimate the benefits of interactions with foreigners: they have an anti-foreign bias. Third, they equate prosperity with employment rather than production: Mr Caplan calls this the “make-work bias”. Finally, they tend to think economic conditions are worse than they are, a bias towards pessimism.
In other words, voter ignorance is not a problem in itself. The problem lies in the fact that voters’ irrationality causes them to elect politicians who will ultimately promote policies that will negatively affect the voters. And worst of all, the voters will never understand that it is their own idiocy that eventually causes them harm.
In any event, here is The Economist article in full:
Vote for me, dimwit
Jun 14th 2007
From The Economist print edition
How the electorate is irrational
ANYONE who follows an election campaign too closely will sometimes get the feeling that politicians think voters are idiots. A new book says they are. Or rather, Bryan Caplan, an economics professor at George Mason University, makes the slightly politer claim that voters systematically favour irrational policies. In a democracy, rational politicians give them what they (irrationally) want. In “The Myth of the Rational Voter”, Mr Caplan explains why this happens, why it matters and what we can do about it.
The world is a complex place. Most people are inevitably ignorant about most things, which is why shows like “Are You Smarter than a 5th Grader?” are funny. Politics is no exception. Only 15% of Americans know who Harry Reid (the Senate majority leader) is, for example. True, more than 90% can identify Arnold Schwarzenegger. But that has a lot to do with the governor of California’s previous job pretending to be a killer robot.
Many political scientists think this does not matter because of a phenomenon called the “miracle of aggregation” or, more poetically, the “wisdom of crowds”. If ignorant voters vote randomly, the candidate who wins a majority of well-informed voters will win. The principle yields good results in other fields. On “Who Wants to Be a Millionaire?”, another quiz show, the answer most popular with the studio audience is correct 91% of the time. Financial markets, too, show how a huge number of guesses, aggregated, can value a stock or bond more accurately than any individual expert could. But Mr Caplan says that politics is different because ignorant voters do not vote randomly.
Instead, he identifies four biases that prompt voters systematically to demand policies that make them worse off. First, people do not understand how the pursuit of private profits often yields public benefits: they have an anti-market bias. Second, they underestimate the benefits of interactions with foreigners: they have an anti-foreign bias. Third, they equate prosperity with employment rather than production: Mr Caplan calls this the “make-work bias”. Finally, they tend to think economic conditions are worse than they are, a bias towards pessimism.
Mr Caplan gives a sense of how strong these biases are by comparing the general public’s views on economic questions with those of economists and with those of highly educated non-economists. For example, asked why petrol prices have risen, the public mostly blames the greed of oil firms. Economists nearly all blame the law of supply and demand. Experts are sometimes wrong, notes Mr Caplan, but in this case the public’s view makes no sense. If petrol prices rise because oil firms want higher profits, how come they sometimes fall? Surveys suggest that, the more educated you are, the more likely you are to share the economists’ view on this and other economic issues. But since everyone’s vote counts equally, politicians merrily denounce ExxonMobil and pass laws against “price-gouging”.
The public’s anti-foreign bias is equally pronounced. Most Americans think the economy is seriously damaged by companies sending jobs overseas. Few economists do. People understand that the local hardware store will sell them a better, cheaper hammer than they can make for themselves. Yet they are squeamish about trade with foreigners, and even more so about foreigners who enter their country to do jobs they spurn. Hence the reluctance of Democratic presidential candidates to defend free trade, even when they know it will make most voters better off, and the reluctance of their Republican counterparts to defend George Bush’s liberal line on immigration.
The make-work bias is best illustrated by a story, perhaps apocryphal, of an economist who visits China under Mao Zedong. He sees hundreds of workers building a dam with shovels. He asks: “Why don’t they use a mechanical digger?” “That would put people out of work,” replies the foreman. “Oh,” says the economist, “I thought you were making a dam. If it’s jobs you want, take away their shovels and give them spoons.” For an individual, the make-work bias makes some sense. He prospers if he has a job, and may lose his health insurance if he is laid off. For the nation as a whole, however, what matters is not whether people have jobs, but how they do them. The more people produce, the greater the general prosperity. It helps, therefore, if people shift from less productive occupations to more productive ones. Economists, recalling that before the industrial revolution 95% of Americans were farmers, worry far less about downsizing than ordinary people do. Politicians, however, follow the lead of ordinary people. Hence, to take a more frivolous example, Oregon’s ban on self-service petrol stations.
Finally, the public’s pessimism is evident in its belief that most new jobs tend to be low-paying, that our children will be worse off than we are and that society is going to hell in a variety of ways. Economists, despite their dismal reputation, tend to be cheerier. Politicians have to strike a balance. They often find it useful to inflame public fears, but they have to sound confident that things will get better if they are elected.
Easier to diagnose than to cure
In short, democracy is a mess. But dictatorship is worse. Mr Caplan observes that Winston Churchill’s aphorism—that democracy is “the worst form of government, except all those other forms that have been tried from time to time”—usually cuts the conversation short. He does not think it ought to. To curb the majority’s tendency to impose its economic ignorance on everyone else, he suggests we rely less on government and more on private choice. Industries do better when deregulated. Religions thrive when disestablished. Market failures should be tackled, of course, but always with an eye for the unintended consequences of regulation. Mr Caplan is better at diagnosis than prescription. His book is a treat, but he will never win elective office.
Grave Error 
Although production is certainly highly important for statistical output, this article reads like an oligarch’s manifesto.
Any economist who technically or statistically surmises that “people having jobs isn’t important” … should be fired and then interviewed after six months of unemployment.
This is the corporate view of democracy, and is highly fallible under scrutiny. Capitalism is an economic vehicle, democracy is a political vehicle … neither necessarily require the other for operation.
Strangely, the part of the conversation where it should be statistically pointed out that capitalism only works in a society where consumerism is numerically ‘sufficient’, was never mentioned. If the populace is heavily unemployed/suffering financial stress, they do not consume. Lack of consumption, destroys demand, overburdens supply, institutes higher inflation and lower tax revenues on both the state and federal level.
Even including global markets, transportation, tariffs, and diplomacy costs keep it in much the same state.
Let them have their designs though, then the Marxist Proletariat becomes reality.
“Easier to diagnose than cure.” They can’t even get a quote right.
“When the diagnosis is such that everyone sees the problem, there is no longer any cure.” Niccolo Machiavelli
Viva la Rivoluzione!!!
I think the point wasn’t to say that employment was irrelevant, but rather that production is what makes employment valuable. If you employ people in non productive ventures, then there is no economic gain.
I live in Spain where people have to work an extra hour a day to achieve positive production rates (they are basically working with spoons not shovels).
I can’t say my perspective is correct, but that did not seem to be the tone of the article.
To me it read more like: “You working slobs are ignorant and only useful for creating your own worst end.”
Plus, you’ve been outside the country for too long. The corporate aire here is, (don’t tell CK I said this), almost exactly as he lays it out repeatedly, and this is definitely a manifesto.
Since NAFTA, the corporate mode here has been that they don’t need American workers, because they can take their service/product to any third world nation, pay 1/8 in wages and literally no benefits, have enough left over to deal with foreign corruption/governments, and still come out 10 – 18% ahead of the margin. If the service/product slips in quality … who cares, the shareholders and upper management still get their “due”.
This “writer” seems to be of that mentality, that production, making a point to limit the scope of human involvement, (i.e. employment for citizens), because it is an unnecessary burden, and not economically sound.
On paper, he’s correct. In a mathematical sense, having 10 – 20% of the populace control 90% of its wealth is the most advantageous for GDP and GNP. This only takes in numbers accounting I/0, tax revenue, investment and interest.
In the “really, real” world, where hominids are more than paper, it just doesn’t work. But then again, I could just be FOS, the great Empires of the Egyptians, Greeks and Romans do still flourish today, and history never repeats.
(plus I like the commentary on how collective ignorance adds up to ascertaining the correct answer in 91% of political scenarios .. ::chuckle:: .. then the problems of hominid survival become apparent)
Yes, the obvious weakness of the article is that it assumes that liberal economic theory is objectively true, and anyone who does not buy into liberal market theory is ignorant or is acting against their own interest.
But the great Empires all failed when they failed to be competitive — when they ceased being truly global and when they became over protective.
The problem with NAFTA isn’t that it is bad for America but that it is bad for Mexico. What happens when the Mexican standard of living increases in the short term due to NAFTA, the jobs that fled to Mexico then flee to places of cheaper labor.
But then again, that is an economic fact and a reality that even the wealthy countries face. Do we want an unskilled domestic workforce? When unskilled or even unproductive labor at home is expensive, you will always get an increase in immigration that will do it for much less. Job flight is actually good for domestic labor as it forces the domestic workforce to educate itself.
Come on. When you have to choose a product or service, which one do you choose? The more expensive one or the cheaper one? Now imagine that the difference in quality is negligible, would you still pay more? Your car is broken, and you have two mechanics who can fix it with almost no difference in quality.
Too generalised cugino, bollocks. Instances in life are never that simple.
My first ISP was Time-Warner, (read: Shitbag, Inc.). Because of a radio station behind the house we were living in, my internet was constantly going to for between 4 – 8 hours a day. I called and talked to bonehead in India who tried to tell me his name, regardless his deep Tamil accent, was John. GMAFB, “John” … right. Eventually I had to go to the extent of doing to TW’s office and raise unmitigated cain because they weren’t doing anything to resolve the issue. Their next step was to tell me that my computer was obviously the problem. I inform them I built the system, and have been doing so for a decade. My system isn’t the probably. They try every politically correct manner of telling me I know nothing about computers/networks.
I dump them and go to SBC. I have the same problem for a total of three days. I talk directly to their American side tech support, no Raj trying to pan himself off as a “Bob” or “John”. I tell them I know what the problem is, explain it. They come out with shielded cable and a more robust modem. Problem solved.
Moral of the story: SBC cost more, gives better service, and they have had a continuous customer for 7 years.
There’s no such thing as negligible difference in quality, and you get what you pay for, almost uniformly.
On the other side of your argument, that’s the same old tired BS I’ve heard for years about “domestic labor”, and it is unsubstantiated bunk. Americans work longer hours, with less vacation time/time off than any other nation of the model type anywhere in the world. Even the Japanese take more time off than we do.
Every time something goes “offshore” for LexisNexis, it comes back and we have to fix it. Why? Because we do better quality work as a standard than most other countries.
“Outsourcing” and layoffs don’t save American companies, but it does fatten the pockets of those heathen oligarchs who could care less about America or Americans. That’s the problem with this country: devaluation of standards to suit the avarice, (abject character and effeminate weakness) of the few.
Read your history again, and you’ll find it is irrefutably true: when nations/civilisations sacrifice standards for weakness and avarice, entropy gives way to chaos, and Encyclopedia Brittanica awaits their entry in the log and journal of continual human stupidity.
Machiavelli wrote the American epitaph, and he’s been dead for five hundred years. Long live the King.
James, isn’t that what protectionism does? Sacrifice standards for weakness and avarice? Imagine that the government subsidized TWC because it is a US company. You’d keep getting the same poor service. The important thing is choice. And yes, in a competitive market, you have other choices, and that is why you changed ISPs, because yes you valued the difference in the quality of service.
For example, today in the news in Spain, I saw that 93% of the movie theatres went on strike to protest a new protectionist law that would force movie theatres to screen one European/Spanish film in every four. The argument is that US films are destroying the European film market. But the movie theatres argue that nobody wants to see European film (bascially because they suck). So now the movie theatres are likely to lose revenues and the state is promoting weakness and avarice in protecting an “unprotective” and unpopular domestic film industry.
Where is the difference? If people want better quality they will pay for it. That is for sure.
You’re right, Machiavelli was correct, and protectionism only promotes continual human stupidity by sustaining and subsidizing it.
At no point did I call for protectionism. That isn’t even in my theorising.
But what you are calling protectionism, is nothing of the sort. By definition, what is occurring here is oligarchic socialism, and although “protectionism” is likely a word that could be used in conjunction, it would be peripheral at best.
Where this article fell through was equating voters to ignorance, which is a stand call of the oligarchic mentality. They assume that everyone but their group is incapable of making correct decisions. That’s predicated upon the fact that an informed populace will choose to remove their influence, (and as CK correctly says often, affluence), from the system.
That isn’t the case in this country. Americans have all the possibilities, at hand, all the time, to make informed choices. The problem with the populace is undoubtedly a number of interlinked instances; but all the instances add up to apathy.
We all recognise the problems, and in the Machiavellian principle, that is the point where there is no cure. Americans aren’t stupid/ignorant by default ~ it’s inherently by choice ~ Niccolo spends two pages in his introduction of The Discourses, talking about exactly this point in his era. (Oh Noes!!! Say it isn’t so, history does what?) [/derisive sarcasm]
Those who should not hold absolute sway of a government “of the People, by the People, and for the People” ~ have a stranglehold. It is “the People” who are to blame ~ yet again. Even the Founding Fathers were more than quite aware of this scenario, (although I’m really having a tough time figuring out their leanings towards Locke, Hobbes and Paine ~ while writing Law under Machiavellian principles ~ very odd ideological dichotomy).
Niccolo never called for protectionism, quite to the contrary ~ he expected, more at demanded, the arete, virtu`, bushido minded citizen-soldier-scholar. Like all nations though, that archetype has long since passed, and is not likely to come again.
In the short, we don’t lack the capability, we are bereft of the desire ~ in favor of narcissism, avarice, standards removal, and piddling idleness.
It’s always easier to be a sheep.
I haven’t read the book discussed in this article, but it does seem interesting and I agree that voters often elect candidates against their own best interest. However, I think usually more for moral/cultural issues than economic. There is a really good book about this called, What’s the matter with Kansas, How Conservatives Won the Heart of America. http://en.wikipedia.org/wiki/What's_the_Matter_with_Kansas%3F
I think Americans are becoming more xenophobic and protectionist everyday. I think they have no clue about the pros and cons of outsourcing, nor do they understand the issues related to immigration. And the democrats, are also playing into these xenophobic beliefs of the people. There are few better organizing/mobilizing tools than rallying people around a common enemy… trade China and immigrants from Central Americans, respectively. And worst of all the solutions that have been proposed will do absolutely nothing to stop the problems the leaders have identified.
Anyway.