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What Matters Is the Decision-Making Setting

Unhappy with Alan Reynolds’s comment on this post that “only power-mad egomaniacal narcissists would want the job of President, or imagine themsleves suited for the task. The job does not attract the best among us”, Mike Karney (also in the Comments section) wrote:

“The job does not attract the best among us.”

Really? Washington? Jefferson? Lincoln? I’m sure the folks at Cato are much smarter than us ignorant masses or the leaders we choose. Please enlighten us, unshackle us, tell us who the best truly are.

It’s as common for defenders of democracy to praise the collective wisdom of the people as it is for those of us who are not impressed by democracy (as compared to the operation of private-property free markets) to criticize and lament many (and in many cases most) of the “choices” that majorities “make” in elections.  But at least a number of us who insist that democratic voting is a poor means of making choices that could be made privately within markets do not rest our skepticism of democracy on a belief that people by and large are stupid, uninformed, careless, untrustworthy, or reckless.  Rather, our skepticism of allowing democratically made collective “choices” to supersede choices made privately in private-property settings springs from our understanding that democratic voting leads even individuals who typically are intelligent, informed, careful, trustworthy, and prudent to behave stupidly, ignorantly, carelessly, unwisely, and recklessly as voters.

When an individual knows that (1) her choice will be decisive (that is, decide the matter one way or another), and (2) she will personally bear the brunt of the costs of that decision and personally reap a disproportionately large portion of its rewards, then that individual will be a more careful and informed (a more “rational”) decision-maker than she is when she believes that her choice will have no detectable impact on the outcome of a decision to be made or when she understands that almost none of the costs or the benefits (or both) of her choice will fall on her.

In short, the same person who is wise, informed, smart, and prudent when choosing which dishwasher to buy, which job offer to accept, and which lover to marry is too often unwise, uninformed, stupid, and reckless when voting for candidates and issues.

My experience is that romantic affections for democracy cause many people to reject this conclusion. Vox populi, vox dei!  Or, at least, vox populi, ut sim fidelis.

But the voice of the people expressed in voting booths is not trustworthy even as a guide to what ‘the people’ really want.  Because no one voter’s vote will determine the outcome of an election, no voter has incentives to vote carefully and with adequate information.  (See Geoffrey Brennan’s and Loren Lomasky’s pioneering 1993 book, Democracy and Decision and my colleague Bryan Caplan’s great 2007 volume, The Myth of the Rational Voter.)  Making a democratic voter even more reckless as a decision-maker is the fact that the costs and the benefits of most of the policies the elected government will pursue will fall largely on other people.

So Mr. Karney is mistaken to imply that criticisms of democratic outcomes are criticisms of the voters; they are criticisms of an institution – specifically, of democratic voting – as a means of making decisions.

To see what’s wrong with Mr. Karney’s retort to Alan Reynolds, suppose that Alan had instead issued the following lament: “Factories and motorists emit too many greenhouse gasses into the atmosphere.  These emissions cause dangerous climate change.”  Would Mr. Karney have taken Alan to be unjustly or arrogantly criticizing the collective choice of “the people”?  Would Mr. Karney demand of Alan in response: “Unshackle us”?  Would Mr. Karney claim that the current rate at which greenhouse gasses are being emitted into the atmosphere reflect a careful and wise choice of  “the people”?  Would Mr. Karney suggest that because individuals are currently choosing to emit the amounts of greenhouse gasses that they are currently emitting, that individuals’ choices must not be second-guessed or ridiculed?  Would Mr. Karney insist that it is arrogant or haughty of Alan to suggest that he detects a problem with the outcome of this particular decision-making process?

Probably not.  Yet democratic decision-making is infected with at least as many public-goods and free-rider problems as are even the most dysfunctional private market decisions.  It’s public-goods and free-rider problems that lead to democratic dysfunction – including the consistent success in democratic elections of candidates who are appropriate objects of criticism, ridicule, and even disgust.

Bottom line: If one judges the incentives of a decision-making institution to be poor, then to criticize the outcomes of that decision-making process is not at all to criticize the individuals who make the decisions.