Bryan Caplan's "The Myth of the Rational Voter" makes an exceptional contribution to that literature. The book is exceptional in several ways. For one, it is a book on economic theory and application that is easily accessible to those with little or no background in economics. In addition, this is a work that enlightens by using political science as well as economics, a work that delves into practice as well as theory. I think Caplan's book is a major theoretical breakthrough, extending the explanatory power of the Public Choice model. And through it all, Caplan makes his book an easy read.
For several centuries, it's been empirically obvious that voters are ignorant. Political scientists have copiously documented an almost incredibly high level of ignorance, with majorities of Americans being unable to name the two senators from their own state, or even to remember that their state has two senators. Many Americans think foreign aid payments are greater than Social Security payments. In a land where many have learned that "ignorance of the law is no excuse," most people are abysmally ignorant about how laws are made, what guarantees exist in the Constitution, or how to tell the Declaration of Independence from the Communist Manifesto.
A half-century ago, a book in the economics literature ("An Economic Theory of Democracy," by Anthony Downs, 1957) provided a theory to explain the mountain of empirical evidence: voters allow themselves to be "rationally ignorant" (a term coined in the 1960s by Gordon Tullock) about politics because their single vote has virtually no chance of affecting an election.
Now economists use "rational" in a technical and strict sense. To act rationally, for economists, simply means that you allocate scarce resources available to you efficiently among competing uses, that you always use a scarce resource for a more valued end. The key is calculating the value.
When you decide between two cars that you might purchase, you assume the full cost of purchasing badly. So you have strong incentives to choose carefully and study up before making your choice. It is rational to invest time and effort in this way, given the high value attached to making the right choice.
But when you decide between two candidates, you assume virtually no cost, because your single vote has only an infinitesimal chance of changing the outcome. A rational comparison of costs and benefits, of expending time and effort in getting it right, leads to another conclusion from the one you might reach in choosing a car.
What is the value, to you, of your vote? What is the value, to you, of your lottery ticket? It's not the full value of the $1,000,000 prize, because you're not guaranteed to win. The expected value of the ticket is the value of the ticket should you win, multiplied by the probability of your winning. If there is a 1 in 10 million chance of winning, then your ticket is worth only 10¢.
Similarly, the expected value of your vote (the value to you of your candidate's winning over the other candidate, multiplied by the probability that your vote is determinative) asymptotically approaches zero rather quickly as the number of voters grows much beyond that of local PTA meetings. If your vote doesn't affect the outcome, there is no cost to you of voting "wrong." When the cost of ignorance is so low, people are naturally (rationally, in the economic sense) ignorant. It is rational not to expend much of one's time and effort — scarce resources that could be used on more valuable ends — to educate oneself on an election when the value of one's knowledgeable vote is so pitifully close to zero.
Yet how can democracy work when people are grossly ignorant? The last 60 years have seen a number of attempted explanations. Caplan quickly moves us through many of them — the Median Voter theory, for example: if people are ignorant, they vote randomly. Imagine, for simplicity, a national election fought not over candidates but over a particular policy. For every ignorant voter supporting a policy that is bad for the country, there is another ignorant voter opposing it. Say 90% of the electorate is ignorant. Then their votes split 45–45% on the policy at issue. As to the 10% that is knowledgeable (about, for instance, a policy such as free trade, which hurts some but benefits most): let's say it splits 60–40% in favor. Then free trade wins 51% to 49%, as we would want democratic theory to guarantee, even though 90% of the voters were ignorant.
But here's the problem. There is no evidence that voters make random mistakes; actually, they make systemic mistakes. In other words, there is no evidence that voters are simply ignorant; they are, instead, irrational. Ignorance can be easily corrected if sufficient information is provided. Irrationality is another matter entirely.
Caplan, who teaches economics at George Mason University, notes four common, routine, persistent errors that survive generation after generation of correction by economists, only to continue vibrantly alive in the hearts and minds of the "man on the street":
- Anti-market bias: "a tendency to underestimate the economic benefits of the market mechanism." As Caplan notes, "the public . . . focus[es] on the motives of business, and neglect[s] the discipline imposed by competition."
- Anti-foreign bias: Caplan notes that even those who see the benefits of free trade domestically are often of the opinion that if trade helps other countries it must be hurting us. In part this is because they don't understand David Ricardo's famous (to economists) law of comparative advantage, so they think that if we can make a product at home it is always a loss to buy it from abroad. Non-economists, even if they themselves are only second-generation Americans, often see only the jobs that immigrants take, not the jobs that they create; see only extra mouths to feed, not extra hands to work.
- Make-work bias: "a tendency to underestimate the economic benefits of conserving labor. Where non-economists see the destruction of jobs [through more efficient methods of production], economists see the essence of economic growth — the production of more with less."
- Pessimistic bias: "a tendency to overestimate the severity of economic problems and underestimate the (recent) past, present, and future performance of the economy." Caplan quotes Adam Smith's one-line retort to this bias: "There is a great deal of ruin in a nation."
Caplan quotes economists from the 19th century bemoaning public acceptance of these universally recognized economic fallacies; yet, as he assures us in his role as university-level economics teacher, they are just as evident today. We have all the economic theory and empirical data necessary to dispose of them forever, yet they persist. We may conclude that their continued acceptance does not result from ignorance, rational or otherwise. What, then, is the cause?
Caplan contends — with reasoning analogous to that tending to show that voters are rationally ignorant — that voters are also rationally irrational! They have rational incentives for maintaining irrational ideas.
How can that be? Caplan argues that beliefs are not neutral. People have preferences for certain beliefs. Certain aspects of belief that go beyond their truth value cause them to have value for us. And like other preferences, preferences for beliefs respond to economic incentives.
Changing one's beliefs is not cost free. Consider religious beliefs. On reading a book by George Smith or (the younger) Antony Flew, few religious people just up and surrender their religious beliefs, even if they cannot answer any of the objections raised by these atheist writers. Why? Because people prefer to believe in their religion.
True, there may be costs associated with maintaining false beliefs. Although the average Muslim, like the average Christian or Jew, faces little personal cost in holding a religious belief, the religiously motivated suicide bomber pays a very large cost. Caplan has written elsewhere about the empirical data supporting the claim that most Muslims, when they reach the point of choosing for or against the "career" of suicide bombing, are willing to slip somewhat in the rigidity of their belief system. Similarly, a businessman in the computer industry who because of anti-market and anti-foreign biases refuses to buy or sell across national boundaries and refuses to hire immigrants would quickly find himself at a severe competitive disadvantage. Thus, in many social contexts false beliefs are self-correcting.
But in the realm of voting, Caplan notes, there is little cost in indulging your preciously held but irrational views, just as there is little cost in being significantly uninformed about politics. In both cases your vote has essentially zero chance of impacting the outcome.
If an election leads to more free trade, you are likely to win, because free trade is better for the country in general. But whether the election leads in that direction is not significantly affected by your single vote. If free trade is going to win, it will almost certainly win with or without your single vote. So people pay little cost for indulging their irrational preference — their belief that free trade is bad — and voting against free trade. Granted, what is individually rational, in the economic sense, may be socially unfortunate. If everyone embraces his irrational opposition to free trade, free trade will lose at the ballot box, but it will still lose if you (and only you) take the time and effort to discipline yourself rationally on this topic.
As Caplan explains throughout the text, his new theory expands logically from widely held and accepted views, makes only very basic and logically impeccable assumptions (such as the assumption that people have preferences for certain beliefs), and explains a number of otherwise hard-to-reconcile contradictions in both economics and political science.
Since "The Myth of the Rational Voter" was published, Caplan has frequently been on radio and TV discussing the topic. This allows him to tell the public that most of them are pretty irrational as voters. I don't know Bryan Caplan personally, but I'm guessing that this opportunity is an additional subjective preference he gets to indulge as a result of writing his fascinating and (for democratic theory) devastating book.
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