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

The book was recommended by Harvard economist Greg Mankiw. It's a fascinating book about the failures of democracy. There's a ton of information about how uninformed citizens are continuously wrong about simple economic ideas like free trade, immigration, and countless other topics. Caplan does a good job of steering away from politics and emphasizing on economics. Liberals and Conservatives looking for red meat will be disappointed. Caplan's main argument is that pure democracies do not work; however, a pure market approach is impractical. The reason democracies do not work isn't because people vote for their self interests (he debunks that idea), but because people are too uninformed to make the correct decision. A citizen may vote for a candidate because he/she is in favor of price controls. The voter thinks price controls are for the best of the country; however, it's bad for everyone. Caplan's answer for the democracy dilemma is not a popular one, especially in a country full of Democratic Fundamentalists (see: George Bush). He argues that encouraging higher voter turnout isn't necessary (and is in fact detrimental), and that prospective voters should have to meet an educational requirement to be allowed vote. I think this is a great idea; however, there's no way it would win popular approval. The truth is that educated people are better voters that uneducated voters and pure democracies always fail. The Republic as it was initially drawn up by the Founding Fathers is much different today than what they intended. They never intended direct election of Senators and the President, but over the course of American history the constitution has moved closer to a pure democracy. Overall this is a great book for people with a passion for political science and economics. I'm obviously part of that demographic. For non-economists there's a lot of heavy reading and jargon, but Caplan manages to keep it moving with a lot of real world examples. The Myth of the Rational Voter is a great insight into the failures of democracy.

Caplan's take on democracy can by summarized as follows: first, he accepts two arguments FOR democracy by democratic enthusiasts, 1. voters are largely unselfish; 2. politicians usually comply with public opinion. He then adds his point: 3. voters are irrational (they have "systematically biased beliefs", or in layman's terms, they have false beliefs). Caplan develops a theoretical framework to prove that it is in fact rational for voters to be irrational because the "price" of their irrationality is low in politics. The book mainly consists of the following themes: 1. the history of people's economic misconceptions; 2. empirical evidence of systematically biased beliefs; 3. the "rational irrationality" framework and why systematically biased beliefs lead to democratic failure; 4. prescription for overcoming democracy's weakness. I think Caplan succeeds pretty admirably in 1, 2 and 3, but he is relatively terse at 4. But this is understandable: if you take his arguments seriously, then unless every voter (or at least the "median voter") has a Ph.D. in economics (in fact, she needs to be a libertarian economist!), the outcome of democracy will not be efficient. Increasing the electorate's education, etc. level will somewhat mitigate the situation, but as Caplan himself proves, this is hardly enough (education is not sufficient to eradicate all systematically biased beliefs). As to the book itself, it is quite readable. I knew about his work before reading the book, what surprised me was how he mixed it with the history of economics with his own research, with quotes and all. It's also interesting to note that (at least according to my observations) mainstream public choice (the economic approach of studying politics) economists tend to downplay Caplan's work, maybe it is because Caplan's work cuts to the core of public choice (the "rational choice" approach)? Or maybe they really think his work is not much different than rational ignorance? Now that his book seems to have gathered a lot of publicity, maybe others will take a second look. The only weakness of the book is the part that he repudiates the accusation that economists have "market fundamentalism". His point is basically 1. markets, when free of failures, will lead to efficient outcome (first, "positive", premise); 2. Caplan does not say this, but in most economists' thinking, there is also an implicit second, or "normative" premise, which is that efficient outcome is desirable. In fact, most economists tend to shy away from this conclusion and maintain that they only specialize in cost/benefit analysis and do not make such judgment, but from their passionate, enthusiastic and sometimes vehement arguments for free market, it is not too difficult to detect such deep-rooted belief -- that "free market is good". 3. economists do not always assume there are no market failures, therefore they are not "market fundamentalists". But this is typical economists' thinking: in order to argue w

The cover art says it all; voters are not always, or even usually rational in their support of political candidates and public policies. Caplan delineates several sources of voter bias, defining bias as a deviation from expert positions. This appears to have struck some other reviewers as elitist, and Caplan openly admits as much. Yet this does not mean he is not correct. Few laypeople will defend to the death their prior notions of what makes for good architecture, electrical engineering, or the right way to engage in animal husbandry. Yet when it comes to public policy, few feel the need to rationally defend their arguments. That politics is controversial is not news. The Myth of the Rational Voter distinguishes itself in arguing that voters biases do not balance, but are systematic. For instance, there is good reason to believe that humans evolved to distrust outsiders, and Caplan argues that this manifests itself in "anti-foreign bias", with onerous consequences for issues like immigration and trade policy. Not only is the content erudite, it is a fun read as well. Lucid writing meets well selected quotes to form what is sure to become a classic.

Economists on the right and the left agree on a surprisingly large number of policy issues. They believe free trade is good, the U.S. budget deficit is not a problem and most human beings are better off now than in the past. Yet the democratic public doesn't agree. It fears trade and foreigners, thinks the budget deficit is a big problem and is pessimistic about the economy even during periods of record economic growth. But the worst part, says economics professor Bryan Caplan, is that the public votes. Drawing on empirical research about voter attitudes, Caplan describes how voters are mistaken about many policy issues and - more importantly - why they are wrong. His account is frighteningly plausible, but so is his solution: more economic education. We recommend this pithy volume to anyone concerned about voters' ostensibly self-defeating behavior. Democracy may be better than the alternatives, but no one said it was easy.

Many people have noted that democracy seems not to work - policies are implemented that often are not in the best interest of voters, and when voters are surveyed they routinely lack even the most basic civic knowledge. The way people have typically answered this problem is to say that voters are uninformed, and that if they simply had more access to good information, they would use that information to make better choices. But even so, the tiny informed minority will sway elections because the uninformed majority will vote at random. Here, Caplan directly challenges that view by asserting that voters are not simply ignorant but irrational, and that this is in fact predicted by economic theory. Voting is not like shopping - it is more like making use of a commons, because the costs of a "bad" vote are borne by the public at large, and the chance of an individual casting the deciding vote is tiny. Therefore, people will vote for what makes them feel good without bothering to find out whether it really is good - it simply doesn't matter. Caplan explores four systematic biases voters hold against good economic policy - antimarket bias, antiforeign bias, make-work bias, and pessimistic bias. The fact that systematic bias exists means that the irrational majority does not in fact vote at random, so it's the irrational voters deciding who wins elections rather than the small, informed, rational minority. Voters get what they want, it's just that what they want is actually bad for them - and they don't care! Caplan makes a persuasive case for viewing the average voter as irrational rather than simply ignorant, though admittedly I am sympathetic to this idea to begin with. I wish he had been able to include more recommendations in his conclusion, but this should be a promising area for further research.