10 Lessons on Irrational Voters from 2016 by Bryan Caplan, Foundation For Economic Education
Irrational Voters – The Myth of the Rational Voter, three elections later
In 2007, I published The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Every presidential election year, people ask for an update, and I normally say, “Nothing’s changed.”
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
But 2016 really does look like an outlier. My thoughts on Irrational Voters:
- While the public perennially exhibits what I call anti-market and anti-foreign biases, 2016 is egregious. Sanders is anti-market bias personified, Trump is anti-foreign bias personified. Sadly, my claim that the median American is a “moderate national socialist — statist to the core on both economic and social policy” looks truer than ever.
- While Sanders’ odds of winning the nomination are now low, his policy views seem closer to the median Democrat’s than Clinton’s. The typical Democrat will vote for Clinton’s name recognition and general electability, but still pines for Sandersian socialism.
- Trump’s average policy views may be farther from the median Republican’s than his rivals’. But he’s the only candidate whose anti-foreign bias matches the median Republican’s. I’ve long thought this was important to Republicans, but it now looks like anti-foreign bias matters more to them than all other issues combined. And unlike Sanders, Trump started out with more name recognition than his competitors — an edge that’s snowballed over time.
- After bleakly assessing public opinion, The Myth of the Rational Voter argues that democracies normally deliver substantially better policies than the public wants. The political system tends to quench the public’s anti-market and anti-foreign urges while substantially watering down the policy poison. In 2016, oneof the main dilution mechanisms has badly failed: Using social pressure to check and exclude hardline demagogues.
- Fortunately, most of the other dilution mechanisms remain intact. Most notably:
a) While the public often likes crazy policies, they resent the disastrous consequences of those crazy policies. This gives politicians a strong incentive for felicitous hypocrisy once they gain power — especially when contemplating policy change.
b) The median voter has a short attention span, so relatively sane elites have more influence in the long-run than the short-run.
c) Old-fashioned checks and balances: Congress, the Supreme Court, and state governments make it hard for Sanders or Trump to fulfill their promises, even if they want to.
- As a puritan, Sanders revolts me and Trump horrifies me. Even impotent populism makes my flesh crawl. The spectacle of populism-with-a-prayer-of-a-chance has already lost me hours of sleep. Trump in particular keeps intruding on my Bubble.
- Flesh crawling aside, the actual consequences of a Trump or Sanders presidency remain shrouded. I’d bet that deportations (de jure plus de facto) rise under Trump, and give a 25% chance that the 1965 immigration act is amended in an anti-immigration direction. But I can also easily imagine four years of gridlock.
- Main 2016 worry: My base rate for war between the United States and another major power is about 2% per presidential term. For Trump, I’d up the odds to 5% per term. Yes, I know by some measures he’s less hawkish than his Republican rivals and Hillary. But his macho persona and casual remarks seem more predictive than his public statements.
- Neither Sanders nor Trump “prove me right.” My case rests on stable features of democratic politics, not the latest salacious stories. Still, if voters were rational, Sanders and Trump wouldn’t stand a chance. None of the candidates would survive serious scrutiny, but Sanders and Trump would be thrown out as soon as they delivered one short speech.
- Suppose a Hispanic version of Donald Trump were thrilling Hispanic voters. Call him Donaldo Trumpo. Opponents of immigration would plausibly fear that El Donaldo is a classic strongman plotting to turn the United States into a banana republic. And they would hasten to the inference that Hispanics are fundamentally authoritarian and unfit for democracy. If 2016 doesn’t convince you that political externalities are a two-way street, nothing will.