… is from pages 34-35 of Christopher Snowdon’s excellent 2015 monograph, Selfishness, Greed and Capitalism: Debunking Myths about the Free Market (link added):
An ill-informed decision at the ballot box has practically no private cost to the individual. Even in the extremely unlikely event of his vote being decisive, the costs of electing a fool or a knave will be dispersed over a large population. In short, voters can afford to indulge their irrational impulses at virtually zero cost every few years.
This is very different from being irrational with one’s own money in the market. A poor decision in the marketplace will cost us our hard-earned money. A mistake at work might cost us our job. It is because the private costs of making a bad choice are so much greater when our own money is at stake that we are incentivised to gather information and choose carefully when making a purchase in the marketplace…. In politics, unless you are a journalist, politician or lobbyist, it is rational to ignore the whole circus and spend one’s time more productively. ‘Voting is not a slight variation on shopping,’ says [Bryan] Caplan (2007: 140-41). ‘Shoppers have incentives to be rational. Voters do not.’ There is, therefore, no contradiction between being a rational actor in the market and an irrational participant (or abstainer) in a democracy.
DBx: The above quotation is a nice summary of a deep insight from Kenneth Arrow and Gordon Tullock (quoted here yesterday). This insight has been further developed and extended by Geoff Brennan, Loren Lomasky, and my colleague Bryan Caplan.
People more interested in emoting than in thinking often react to this (and other) realistic assessments of the real-world features of democracy by accusing those who offer these assessments of various trumped-up offenses: ‘Opponent of giving ordinary people a say in their own governance!’ ‘Enemy of the People!’ ‘Friend of oligarchs!’ Emoting, of course, feels good, and to indulge in it requires far less effort than does serious thinking. (Those who know the work of Brennan, Lomasky, and Caplan will recognize the irony here.) But regardless of your system of ultimate values, if you’re a genuinely well-meaning person you do not dismiss as evil those who point out inconvenient real-world features of your preferred social institutions. Instead, you listen carefully to such people and, if you judge their insights to be valuable, incorporate these into your own analysis and world-view.
An enthusiast for unlimited majoritarian rule might find the insight quoted above to be mistaken, but surely this insight has enough logical coherence and connection to real-world experience to justify being taken seriously. This insight ought not be dismissed merely because, if it is taken seriously, it dampens your enthusiasm for unlimited majority rule, or at least causes you to consider reducing the range of human activities over which you wish to have majority decisions reign as sovereign. Anyone who would dismiss this insight is obliged to do more than scream ‘It’s undemocratic and those who offer it or who endorse it are enemies of democracy and, therefore, enemies of all that is good and noble!’
Note that the political left is full of people who view individuals acting in markets as being gullible and irrational. So if we grant that people on the political left are friends of humanity, it’s not true that merely to point out that there are some institutional settings in which it can be argued that individuals regularly act irrationally or unwisely is to reveal a hatred of humanity. The challenge is to compare how ordinary men and women are likely to act under different institutional settings – namely, on one hand, in collective decision-making settings (such as majoritarian democratic settings) and, on the other hand, in private-property settings (such as commercial markets).