The Myth of the Rational Voter

The Myth of the Rational Voter: Why Democracies Choose Bad Policies is a book The read time is about four and a half hours. by the American economist Bryan Caplan. Caplan revisits the idea of rational actors, one of the foundational aspects of democracy and economics. Caplan proposes that voters within the sphere of their own interests vote against them readily and whole heartedly.

Caplan’s main idea is that within the political landscape, voters are “worse than ignorant” — they are ultimately “irrational” and ensure that this irrationality is realized in public policies. Voters instinctively select for politicians who believe or even feign their irrationalities. These irrationalites are not general but selective — voters tune in and out This is sometimes called confirmation bias. information willingly. Caplan paints a realistic picture of democracy using a framework he calls rational irrationality.

Rational Ignorance

Policies are too complicated and few have the time and knowledge to deconstruct the particulars that make up an informed decision. A majority of voters The wisdom of the crowd. arrive at the position of “rational ignorance”. These uniformed voters have minor impact on overall outcomes, provided that all other things are equal. The well–informed voters make decisions on behalf of the uninformed voters.

Caplan terms this the “miracle of aggregation” which is an extension of the law of large numbers. A majority of uninformed voters annihilate each other and the unpredictability of their rational ignorance creates random errors that remove them from the overall outcome. The well informed ultimately call the shots and make the better decisions. Soft complexities like this allow politicians to play the part of an alchemist with a philosopher’s stone. The underlying complexities of democracy provide absurd levels of tolerance to failure and appear to work like magic.

It reads like an alchemist’s recipe: Mix 99 parts folly with 1 part wisdom to get a compound as good as unadulterated wisdom. An almost completely ignorant electorate makes the same decision as a fully informed electorate—lead into gold, indeed! The Myth of the Rational Voter, Page 8

Beyond underlying complexities like rational ignorance, policy making eventually arrives at the land of stranger than fiction because as Caplan writes, “voters' beliefs of economics are systematically mistaken”.

Systematic Bias

Perhaps no one ultimately wants to be rationally ignorant. If rational ignorance introduces random errors, then beliefs introduce systematic errors. Systematic errors are the biases that affect the entire decision making process in a distinct and non–random way. Caplan The Myth of the Rational Voter, Page 30-43 these biases into four categories.

  1. Anti–Market Bias: Underestimating the benefits of market mechanisms.
  2. Anti–Foreign Bias: Underestimating the economic benefits of interaction with foreigners.
  3. Make–Work Bias: Underestimating the economic benefits from conserving labor.
  4. Pessimistic Bias: Overestimating the severity of economic problems.

Preferences Over Beliefs

The psychological tension of preferences over different beliefs ultimately confine democracies to a limited window of agreeable rationality. Policy makers may all agree on the destination but not on the journey.

Put bluntly, rule by demagogues is not an aberration. It is the natural condition of democracy. The Myth of the Rational Voter, Page 19

The ability to persuade the masses. is ultimately the name of the game when preferences over beliefs are at play. The synergistic relationships of preferences, beliefs, and actionable policies, nudge policy makers to feign the irrationalities of the electorate, and the electorate to feign the irrationalites of policy makers. The real influencers play the arbitrary space in between.

Politicians rarely stick their necks out for unpopular policies because an interest group begs them or pays them to do so. Their careers are on the line; it is not worth the risk. Instead, interest groups push along the margins of public indifference. The Myth of the Rational Voter, Page 20

The preferences for and usability of beliefs are tried on, and discarded like a change of clothes. As long as a preference does not incur a major cost, then it becomes unobjectionable. Preferences can be held over beliefs, allowing policy makers to hold seemingly contradictory positions. Policy makers and electorates can afford to be irrational and bad policies spread precisely because of this luxury.

Rational Irrationality

In Caplan’s framework, irrationality becomes a A sub-optimal shortcut. for rationality. It’s obvious that most people prefer not to be a pariah or contrarian. Just as the comedian pushes the boundaries of societal norms — irrationality becomes the currency that “buys” into rationality. Bad policies for all intents and purposes must be chosen.

A supporter once called out, “Governor Stevenson, all thinking people are for you!” And Adlai Stevenson answered, “That’s not enough. I need a majority.” — Scott Simon, “Music Cues: Adlai Stevenson” The Myth of the Rational Voter, Page 1

Desire for cold hard facts, truth seeking, and logic are not easily shared values — Depending on who you ask; feelings are facts. beliefs, and preferences over beliefs are their substitutes. Caplan places an economic price on irrationality — if the price of irrationality is low, then the demand for irrationality is high. Caplan also accepts that it is psychologically plausible to rationalize irrationality and describes a hypothetical democratic policy and decision making process.

Step 1: Be rational on topics where you have no emotional attachment to a particular answer.

Step 2: On topics where you have an emotional attachment to a particular answer, keep a “lookout” for questions where false beliefs imply a substantial material cost for you.

Step 3: If you pay no substantial material costs of error, go with the flow; believe whatever makes you feel best.

Step 4: If there are substantial material costs of error, raise your level of intellectual self–discipline in order to become more objective.

Step 5: Balance the emotional trauma of heightened objectivity — the progressive shattering of your comforting illusions against the material costs of error. The Myth of the Rational Voter, Page 126

Conclusion

The Myth of the Rational Voter gives a compelling answer to the question of “why democracies choose bad policies” for those seeking an answer. In a broader view, conceptualizing the rational use of irrationality is jarringly counter–intuitive.

In an economic sense, demarcations like the rational and irrational, or even luck and hard work could be the result of concealed scarcities. If social cohesion and emotional comfort are scarce resources, then Caplan’s idea of rational irrationality makes a lot of sense.