The Myth of the Rational Voter: Why Democracies Choose Bad Policies

In theory, democracy is a bulwark against socially harmful policies. In practice, however, democracies frequently adopt and maintain policies that are damaging. How can this paradox be explained? The influence of special interests and voter ignorance are two leading explanations. I offer an alternative story of how and why democracy fails. The central idea is that voters are worse than ignorant; they are, in a word, irrational -- and they vote accordingly. Despite their lack of knowledge, voters are not humble agnostics; instead, they confidently embrace a long list of misconceptions. Economic policy is the primary activity of the modern state. And if there is one thing that the public deeply misunderstands, it is economics. People do not grasp the "invisible hand" of the market, with its ability to harmonize private greed and the public interest. I call this anti-market bias. They underestimate the benefits of interaction with foreigners. I call this anti-foreign bias. They equate prosperity not with production, but with employment. I call this make-work bias. Finally, they are overly prone to think that economic conditions are bad and getting worse. I call this pessimistic bias. In the minds of many, Winston Churchill's famous aphorism cuts the conversation short: "Democracy is the worst form of government, except all those other forms that have been tried from time to time." But this saying overlooks the fact that governments vary in scope as well as form. In democracies the main alternative to majority rule is not dictatorship, but markets. A better understanding of voter irrationality advises us to rely less on democracy and more on the market

Networks, law, and the paradox of cooperation

There is a tension between libertarians’ optimism about private supply of public goods and skepticism of the viability of voluntary collusion (Cowen 1992, Cowen and Sutter 1999). Playing off this asymmetry, Cowen (1992) advances the novel argument that the “free market in defense services” favored by anarcho-capitalists is a network industry where collusion is especially feasible. The current article dissolves Cowen’s asymmetry, showing that he fails to distinguish between self-enforcing and non-self-enforcing interaction. Case study evidence on network behavior before and after antitrust supports our analysis. Furthermore, libertarians’ joint beliefs on public goods and collusion are, contrary to Cowen and Sutter (1999), theoretically defensible.networks; anarcho-Capitalism; collusion

Rational Irrationality: A Framework for the Neoclassical-Behavioral Debate

Critics of behavioral economics often argue that apparent irrationality arises mainly because test subjects lack adequate incentives; the defenders of behavioral economics typically reply that their findings are robust to this criticism. The current paper presents a simple theoretical model of "rational irrationality" to clarify this debate, reducing the neoclassical-behavioral dispute to a controversy over the shape of agents' wealth/irrationality indifference curves. Many experimental anomalies are consistent with small deviations from polar "neoclassical" preferences, but even mildly relaxing standard assumptions about preferences has strong implications. Rational irrationality can explain both standard, costly biases, as well as wealth-enhancing irrationality, but it remains inconsistent with evidence that intensifying financial incentives for rationality makes biases more pronounced.Behavioral

Networks, law, and the paradox of cooperation

There is a tension between libertarians’ optimism about private supply of public goods and skepticism of the viability of voluntary collusion (Cowen 1992, Cowen and Sutter 1999). Playing off this asymmetry, Cowen (1992) advances the novel argument that the “free market in defense services” favored by anarcho-capitalists is a network industry where collusion is especially feasible. The current article dissolves Cowen’s asymmetry, showing that he fails to distinguish between self-enforcing and non-self-enforcing interaction. Case study evidence on network behavior before and after antitrust supports our analysis. Furthermore, libertarians’ joint beliefs on public goods and collusion are, contrary to Cowen and Sutter (1999), theoretically defensible

Mises, Bastiat, public opinion, and public choice

The political economy of Ludwig von Mises and Frederic Bastiat has been largely ignored even by their admirers. We argue that Mises' and Bastiat's views in this area were both original and insightful. While traditional public choice generally maintains that democracy fails because voters' views are rational but ignored, the Mises-Bastiat view is that democracy fails because voters' views are irrational but heeded. Mises and Bastiat anticipate many of the most effective criticisms of tra4itional public choice to emerge during the last decade and point to many avenues for future research

Mises, Bastiat, public opinion, and public choice

The political economy of Ludwig von Mises and Frederic Bastiat has been largely ignored even by their admirers. We argue that Mises' and Bastiat's views in this area were both original and insightful. While traditional public choice generally maintains that democracy fails because voters' views are rational but ignored, the Mises-Bastiat view is that democracy fails because voters' views are irrational but heeded. Mises and Bastiat anticipate many of the most effective criticisms of tra4itional public choice to emerge during the last decade and point to many avenues for future research

Roundtable on Epistemic Democracy and its Critics

On September 3, 2015, the Political Epistemology/Ideas, Knowledge, and Politics section of the American Political Science Association sponsored a roundtable on epistemic democracy as part of the APSA’s annual meetings. Chairing the roundtable was Daniel Viehoff, Department of Philosophy, University of Sheffield. The other participants were Jack Knight, Department of Political Science and the Law School, Duke University; Hélène Landemore, Department of Political Science, Yale University; and Nadia Urbinati, Department of Political Science, Columbia University. We thank the participants for permission to republish their remarks, which they edited for clarity after the fact

Self-interest And Public Interest: The Motivations Of Political Actors

Self-Interest and Public Interest in Western Politics showed that the public, politicians, and bureaucrats are often public spirited. But this does not invalidate public-choice theory. Public-choice theory is an ideal type, not a claim that self-interest explains all political behavior. Instead, public-choice theory is useful in creating rules and institutions that guard against the worst case, which would be universal self-interestedness in politics. In contrast, the public-interest hypothesis is neither a comprehensive explanation of political behavior nor a sound basis for institutional design