Banks and Government essay?,
In a recent book, Democracy and Political Ignorance: Why Smaller Government Is Smarter1, Ilya Somin offers extensive evidence that many voters lack even basic knowledge. He suggests that as a consequence, voting is unlikely to yield good policy. The solution he proposes is to scale back the national government and instead leave more decisions to “foot voting,” where individuals can make policy decisions through market choice. In Albert Hirschmans terminology2, Somin suggests that “exit” is superior to “voice” as a choice mechanism.
I agree with Somins premise, which is that voters are ignorant. I agree with his conclusion, which is that exit is superior to voice. However, I disagree with a possible interpretation of Somins work, which is that voter ignorance is the only problem (or the most important problem) with democratic voice as a choice mechanism. I believe that it would be a mistake to suggest that a strong central government would work well under democracy even if voters were well informed.
For example, in a response to Somins book, Bryan Caplan wrote on EconLog,
After years of reflecting on voter cognition, though, Ive come up with a remedy that seems both practical and palatable.
… Create an annual Voter Achievement Test with questions about politics, economics, and policy.3
Caplan goes on to describe offering cash prizes to citizens who do well on such a test. The idea is to replace current civics education, which is delivered in a top-down fashion and which citizens do not have to remember after high school, with incentives for citizens to obtain and retain knowledge of civics.
While Caplans particular approach may be original, his goal of promoting civics education has long been widely shared. Since Americas founding, many thinkers have argued that the success of democracy requires a population with strong civics knowledge.
Somin makes a persuasive case that American voters are woefully ignorant. Many voters cannot identify important elected officials. Few voters are able to correctly describe which policy proposals are in contention during campaigns. To the extent that voters have any notion of where candidates stand on key issues, they are frequently mistaken.
However, I do not believe that education in civics can address the real problems in democracy. For one thing, civics education will not eliminate the ideological biases that people bring to issues.
Consider the thought-experiment of having civic education that covers such issues as the minimum wage and climate change. In this thought-experiment, take it as given that there is a consensus that the minimum wage reduces employment opportunities for low-skilled workers and that carbon emissions pose a danger to the earths climate.
Like many economists, I believe that a national minimum wage is a bad idea. Is it possible that with better civics education we would not have a minimum wage? Perhaps. One is more likely to appreciate the problems with the minimum wage if one has studied economics, which might or might not be included in civics education.
By the same token, if we had civics education in climate science, would we enact strong measures to reduce carbon emissions? Advocates of such policies frequently complain of public ignorance about the issue of climate change. Climate-change “believers” say that the press gives far too much credence to a relatively small group of “deniers” within the scientific community.
Similarly, I believe that the press gives too much credence to the minimum-wage “deniers” within the economics profession, meaning economists who argue that the minimum wage does not hurt low-skilled workers and may even help such workers. However, I would be wary of civics education that leads everyone to reject “denialism” on both the minimum-wage issue and the climate-change issue.
From a libertarian perspective, the problem with putting decisions into the “voice” framework of politics rather than into the “exit” framework is that, regardless of how well informed voters are, representative democracy is flawed. Individual choices are restricted by the fact that government policies are selected in “bundles.” If some of your preferred policies are favored by one candidate and other policies are favored by a different candidate, the best you can do is choose from the best among these two bundles. Moreover, once in office, your candidate may work less hard to enact the policies that motivated your vote than for the policies that made you reluctant to vote for that candidate.
For more on the topics in this article, see “The Dangers of Majoritarian Democracy,” by Pedro Schwartz, Library of Economics and Liberty, December 5, 2013. See also Rent Seeking by David R. Henderson in the Concise Encyclopedia of Economics.
Another well-known problem with representative democracy is rent-seeking. Benefits to interest groups are concentrated, while the costs that they impose on the general public are dispersed. This gives interest groups the incentive to devote resources to making sure that policies that benefit their particular interests are enacted. It is not clear whether well-informed voters would be able to do anything about rent-seeking. If one of the tactics of interest groups is to spend resources to disguise their actions, then they may have to expend more resources on these “camouflage” activities in order to overcome well-informed voters. However, if the elasticity of demand for government-created rents is low, this means that the social cost of rent-seeking will go up rather than down.
I think it is important not to invest too much hope in improving democracy. My own support for democracy is limited to the fact that it provides a peaceful means to change the personnel in government. Otherwise, I want my fellow citizens to be disenchanted with democracy.
Instead, many voters, even the well-informed, are enchanted by democracy. They approve of the exercise of power by elected officials, even though to me this exercise often seems arbitrary and unreasonable. They cite poll results to justify policies, rather than measure policies against Constitutional limits or philosophical principles.
As I see it, reasonable government, including the protection of liberty, requires those in office to follow norms of behavior that are bound by Constitutional constraints and principles of limited government. The problem with democratic enchantment is that it sanctions whatever majority-elected political leaders can get away with.
Even if we were somehow to solve the problem of civic ignorance in America, I do not believe that this would do much to improve the prospects for liberty. To move in the direction of greater liberty, we need to overcome democratic enchantment. That enchantment has become embedded in elite ideology. To me, that is a far greater challenge than is the problem of mass ignorance.