Friday, November 10, 2006

Towards smarter democracy

Bryan Caplan has a great article on the irrationality of voters. (No, it's not a commentary on the most recent American election, which was probably a smidgen more rational than most, on balance). The basic idea, which I find unimpeachable except in one area, is that voters are almost never foreseeably impacted by their own votes. Single votes almost never change the outcome of elections. Even if they did they would rarely impact the voter or others in a way the voter clearly foresees. Given this disconnect between vote and consequence, votes instead are based on how good they make the voter feel. People vote in the first place, and then decide what to vote on, based almost entirely on their emotional needs rather than on a rational analysis of the kind that, for example, an engineer brings to designing software, an economist brings to crafting monetary policy, a lawyer brings to drafting a contract, a judge brings to interpreting law, or even that a boss or HR person brings to hiring a new employee.

I'd add that people use their political opinions to signal things they'd like their acquaintances to believe about their personality. For example, people support aid to the poor to signal to their friends and co-workers that they are generous people, and thus good people to be friends or co-workers with. The actual impact of any resulting policy on poor people or taxpayers or others generally remains unobserved by friends and co-workers and thus is irrelevant. Even if a friend believes the policy is mistaken, but that the opiner's heart is in the right place, this is sufficient for successful signaling. It's coming across as having a genuine desire to help the poor that counts. Similarly, people are motivated to vote in order to signal their altruistic participation in the community.

The one area Caplan fails to explore is very small-scale elections. I've long thought that juries, for example, are a much better example of democracy than large-scale elections. Jurors are forced to take the time to learn the facts (thus overcoming rational ignorance) and have a real case at hand (thus overcoming much of the mismatch between social signaling to ignorant friends and reality). They can clearly foresee the impact their verdict will have on the defendant. While Caplan extols the virtues of judges and other experts like himself (he'd like to have a Supreme Court of Economists to overturn bad economic legislation), such a Platonic oligarchy of experts needs to be checked and balanced by democracy. Juries, and the right of juries to judge law as well as fact (and for lawyers to argue law as well as fact in front of the jury), along with an unimpeachable right to trial by jury, are a much better way than large-scale elections to check oligarchy.


Gordon Mohr said...

At what point do juries become mindless masses?

Could we use a jury of 5,000 to more rationally choose our next president? 1,000? 200?

Could a single state use such juries to replace its primaries? Its choice of electoral college electors?

Mike Huben said...

Caplan's article is stupid. With the exception of the minor case of propositions (where his ideas may apply), votes do not result in policy, they result in actors being selected.

Those actors then are faced with a choice: do they attempt to represent ignorant voters and make a mess of things which will offend many voters? Or do they attempt to do the right thing, and thus offend very few because things are moving smoothly?

Our current example (Bush) represents a third choice: doing a wrong thing to represent cynical special interests, and has thus offended many voters.

Nick Szabo said...

Gojomo, I suspect voting becomes mostly mindless pretty quickly, and most incentive is lost somewhere between the typical size of a jury and Dunbar's number (about 150). But even a few thousand voters provide far better incentive to vote well than a few million.

Many ancient and medieval republics operated for a few centuries with a few thousand voters. But there was far more to these republics than voting. Informal and sometimes even formal bribery was widely practiced but there were extensive mechanisms to distribute power and separate duties to prevent abuse from getting out of hand. The experiences of Rome and Athens showed that this did not scale to the size of an empire.

The U.S. was and is, and modern democracies are, historically unusual experiments in large-scale voting. Probably only widespread literacy and the cultural homogeneity that comes from being literate in a common language make it possible, and then only because most of the heavy lifting is actually done by (e.g. in the U.S.) inside-the-Beltway mechanisms and the checks and balances in our Constitution. We make a fetish out of elections but they are merely one checking mechanism, and actually among the minor and not very effective ones. The stuff you learned in civics class was indoctrination in our religious ritual of voting and doesn't have much to do with how the system actually works. (If there's enough interest, I can write up many the things I've learned about K Street and the like).

However, the Constitution was designed for a very decentralized confederation, not for a vast national welfare state, and it's highly unlikely that it will survive for another two hundred years without some radical change in the meantime, which may involve returning to a decentralized confederation, a nightwatchman/franchise system of jurisdiction on the old English model, a contract-based system of arbitrators and security insurance, or some combination of these. Good law has seldom depended on good voting beyond the jury; that's a conceit of, and a fatal flaw of, modern legal positivism and our civic religion.

Medieval Venice had a very interesting voting regime that alternated elections involving between 20 to 100 voters with lotteries, in about a dozen phases. This arduous process, which somewhat resembles a cryptographic cipher, guaranteed that bribers could not predict who would win, which greatly discouraged the corruption of elections.

Mike, I agree that hiring is a better analogy than making a specific policy decision, but it's still the case that your typical employer puts far more thought, observation, interaction, and investigation into the typical hiring decision than does the typical voter.

Mike Huben said...

Good to see we meet part way, Nick, but perhaps I can pull you over further.

The case is not much like a boss hiring an employee: it's more like a board of directors hiring a company president. You don't have one-person centralized decision making. You have a bunch of people, few of whom invest much time or effort evaluating the candidate, and they vote.

And judging from how well large businesses (like Disney) do with their presidents (like Eisner), even though there are over 100M voters, they don't do much worse. Excepting perhaps Bush II.

Nick Szabo said...

Mike, you lost me. Corporations do far, far better hiring executives than voters do "hiring" politicians. But it is rather hard to numerically compare the performance of a monopoly that can compel its "customers" to hand over money by force with the performance of a corporation that must seek out voluntary customers in a competitive market. The fact that the IRS has by far the highest profit margin of any organization within the U.S. by no means makes its performance superior.

Anonymous said...

Actually Eisner was a brilliant CEO - at first. Commitees and boards are much better than voters a selecting leaders, but have a hard time getting rid of them, because loyalties develop and objectivity is lost.

Voters may be better at getting rid of bad or stale leaders. Think Jimmy Carter or Gray Davis. Come to think of it why can't we recall Bush. We need a new amendment :)