Oh, how we bemoan politicians in India. We call them corrupt, undereducated, sometimes criminal, occasionally senile, and we complain about how they do nothing for the country. And then, again and again, we vote in the very people we rant about. Is this a failure of democracy? If so, what causes it?
The traditional answer economists would give you, from public choice theory, is “rational ignorance”. The costs of casting an informed vote outweigh the potential benefits. Our vote, let’s face it, would count only in the immensely unlikely event of a tie. To gather and evaluate all the information required in terms of the policies that a government should follow are too time-consuming for us. Thus, it is rational to remain relatively ignorant. And because of this rational ignorance, bad governments come to power, and are in the sway of special interests, for whom the benefits outweigh the costs of influence.
This is not just an elegant theory, but also politically correct. Voters aren’t stupid, it tells us, merely rational. Well, along comes Bryan Caplan, who teaches at the George Mason University in Virginia and is a popular economics blogger, to tell us that democracy fails not because voters are rationally ignorant, but because they are irrational. In the introduction to The Myth of the Rational Voter, he writes: “In the naïve public interest view, democracy works because it does what voters want. In the view of most democracy sceptics, it fails because it does not do what voters want. In my view, democracy fails because it does what voters want.”
Caplan’s book is written in an American context, and is yet profoundly relevant to India, and will evoke jolts of recognition from readers here. For a significant part of the book, he outlines the different biases that people tend to have in the face of all the evidence. There is the anti-market bias, people’s inability to “understand the ‘invisible hand’ of the market”. There’s the anti-foreign bias, a distrust of foreigners and an underestimation of the benefits of trading with them. There’s the make-work bias, which causes people to “equate prosperity not with production but with employment”. And there’s the pessimistic bias, which makes people “overly prone to think that economic conditions are bad and getting worse”.
Caplan doesn’t merely allege that these biases exist, but proves it is so by presenting a fair amount of data on what the American public thinks. It follows, then, that in the political marketplace, politicians will pander to these biases to get elected.
It’s hardly surprising, therefore, that so many disastrous policies have not only survived decades of evidence that they are counterproductive, but enjoy popular support. Thus, protectionism thrives, businesses continue to be over-regulated, and counterproductive price controls such as the minimum wage remain popular. Worse, they will remain that way, not because voters don’t want to invest the time in evaluating their results, but because voters choose, irrationally, to believe in them regardless of their efficacy.
Now, why would they do that? Caplan ascribes it to what economists call “preferences over beliefs”. We all tend to subscribe to one belief system or another, for it gives us comfort in a complicated and scary world. When it is a religion, we cling on to it irrationally, with our faith refusing to accept any reasoning that could contradict our worldview. Political ideology is no different. Caplan quotes Gaetano Mosca: “The Christian must be enabled to think with complacency that everybody not of Christian faith will be damned. The Brahman must be given grounds for rejoicing that he alone is descended from the head of Brahma and has the exalted honour of reading the holy books. […] The Mohammedan must recall with satisfaction that he alone is a true believer, and that all others are infidel dogs in this life and tormented dogs in the next. The radical socialist must be convinced that all who do not think as he does are either selfish, money-spoiled bourgeois or ignorant and servile simpletons.”
Caplan sums it up beautifully: “Worldviews are more a mental security blanket than a serious effort to understand the world.” Now, while the exact examples he comes up with may not be so relevant to India—though we do have our share of deluded socialists—the phenomenon is commonplace. Indian elections are determined largely by identity politics, by worldviews that ignore issues of governance and economics.
The religious nationalism that we see in Gujarat, for example, is a classic example of a worldview acting as a crutch, perhaps exacerbated by the insecurity that globalization brings. If you look back on state and national elections over the last few decades, you will be certain to find many where the results are mystifying. Caplan’s wonderful book explains why. It may not fill you with hope, but perhaps hope would be, as Caplan may put it, rationally irrational.
Amit Varma’s weekly columnThinking it Through runs in Mint every Thursday.
Write to firstname.lastname@example.org