Sunday, September 18, 2016

Bryan Caplan VS Voting Alternatives

I finally got around to reading this blog entry by Bryan Caplan... Why I Don't Vote: The Honest Truth.  To be equally honest, I don't vote either.

Here's what Caplan wrote in his entry...

My honest answer begins with extreme disgust.  When I look at voters, I see human beings at their hysterical, innumerate worst.  

Here's what I wrote in my previous entry...

Everybody perceives that they see society.  But this perception is wrong.  We don't actually see society.  What we actually see is a reflection of society. All we can ever see is a reflection of society. This is because all we can ever know about what's really inside people depends entirely on what they choose to reveal.  People's projections create society's reflection.

There are two main methods for people to reveal/communicate/project their preferences...

1. stated preference = voting, surveys, polls, Facebook "Likes"
2. demonstrated preference = willingness to pay/spend/sacrifice

Do both these methods create an equally accurate reflection of society?  Of course not.  As Nassim Taleb would say... voting doesn't have skin in the game...

Ralph Nader had a heuristic for war. He said that if you are going to vote for war, you should have a member of your family--a descendant, a son or grandson--on the draft. And then you can vote for war. - Nassim Taleb, Skin In The Game

As Alex Tabarrok would say... voting doesn't have a tax on bullshit...

Overall, I am for betting because I am against bullshit. Bullshit is polluting our discourse and drowning the facts. A bet costs the bullshitter more than the non-bullshitter so the willingness to bet signals honest belief. A bet is a tax on bullshit; and it is a just tax, tribute paid by the bullshitters to those with genuine knowledge. - Alex Tabarrok, A Bet is a Tax on Bullshit

Anybody who knows anything about Bryan Caplan knows that he's willing to put his money where his mouth is.  This is how Caplan works.  This is really not how voting works.

Voting doesn't require skin in the game.  Voting doesn't have a tax on bullshit.  This means that the reflection that voting creates of society is bullshit.  Again, with emphasis.... the reflection that voting creates of society is bullshit.


My honest answer begins with extreme disgust.  When I look at voters, I see human beings at their hysterical, innumerate worst.  

Don't you get the sense that Caplan is judging humanity by its opinions?  Doesn't it sure sound like he's judging the book by its cover?

Here's another economist doing the same thing...

Is it possible to make progress towards this inclusive state in the United States at the moment? I would’ve said yes 15 years ago, 10 years ago, 5 years ago, but today I do feel more pessimistic than ever about the United States and about the world. Of course, I’m not surprised that there is a huge amount of discontent among some segments of the voting public, and some of this is entangled with fear from and hatred against immigrants and minorities. But the extent of this hatred has been a shock to me. - Daron Acemoglu, Stop Crying About the Size of Government. Start Caring About Who Controls It.

And another economist who did the same thing...


Historians are mistaken in explaining the rise of Nazism by referring to real or imaginary adversities and hardships of the German people. What made the Germans support almost unanimously the twenty-five points of the "unalterable" Hitler program was not some conditions which they deemed unsatisfactory, but their expectation that the execution of this program would remove their complaints and render them happier. They turned to Nazism because they lacked common sense and intelligence. They were not judicious enough to recognize in time the disasters that Nazism was bound to bring upon them.

The immense majority of the world's population is extremely poor when compared with the average standard of living of the capitalist nations. But this poverty does not explain their propensity to adopt the communist program. They are anti-capitalistic because they are blinded by envy, ignorant, and too dull to appreciate correctly the causes of their distress. There is but one means to improve their material conditions, namely, to convince them that only capitalism can render them more prosperous.  - Ludwig von Mises


To argue that the Holocaust and WWII accurately reflected the German society is to pretend or assume that voting creates an accurate reflection of society.  Nothing could be further from the truth...

As was noted in Chapter 3, expressions of malice and/or envy no less than expressions of altruism are cheaper in the voting booth than in the market.  A German voter who in 1933 cast a ballot for Hitler was able to indulge his antisemitic sentiments at much less cost than she would have borne by organizing a pogrom. - Loren Lomasky, Democracy and Decision

Mises didn't know better.  Daron Acemoglu doesn't know better.  Bryan Caplan doesn't know better?  That's not true.  Of course Caplan knows better.  Yet, I sure do get the sense that he somehow kinda forgets that the reflection of society that voting creates is bullshit.

We really shouldn't judge society by its bullshit reflection.

So that was one issue that I had with Caplan's entry.  Another issue that I had with his entry was that there was something super strangely absent...  a viable alternative to voting.  Are there any viable alternatives?

Today’s Mandeville is the renowned biologist Thomas D. Seeley, who was part of a team which discovered that colonies of honey bees look for new pollen sources to harvest by sending out scouts who search for the most attractive places. When the scouts return to the hive, they perform complicated dances in front of their comrades. The duration and intensity of these dances vary: bees who have found more attractive sources of pollen dance longer and more excitedly to signal the value of their location. The other bees will fly to the locations that are signified as most attractive and then return and do their own dances if they concur. Eventually a consensus is reached, and the colony concentrates on the new food source.  - Rory Sutherland and Glen Weyl, Humans are doing democracy wrong. Bees are doing it right

Is quadratic voting a viable alternative to regular voting?  A quick google search did not provide Caplan's answer to this really good question.  On the other hand, a quick google search does provide Cowen's answer to this really good question.   Is Caplan's answer the same as Cowen's?  I'd sure like to know.

Personally, I definitely think that quadratic voting is a lot better than regular voting.  With quadratic voting at least there's some skin in the game.  At least there's some tax on bullshit.  At least there's some reflection/communication/projection of preference intensity.  But I'd really love to hear Glen Weyl explain why he thinks that it's better than straight buying and selling votes.  I'd also love to hear him explain whether he thinks that quadratic voting is better than coasianism.

Is coasianism a viable alternative to voting?  Coasianism would replace voting with spending.  Participants would have a certain amount of time to spend as much money as they wanted on their preferred option.  Whichever option received the most money would be the most valuable option.  The "losing" side would get their money back.  Plus, they would get all the money spent by the "winning" side.  So coasianism is actually a win-win situation.  Participants would either get their preferred option... or they would get something that they value even more.  In order to prevent perverse participation... the "market" would be blind.  The totals would only be revealed after the "market" closed.  Would there still be speculators?  If so, then they would quickly learn a fundamentally important lesson the hard way...

It is impossible for anyone, even if he be a statesman of genius, to weigh the whole community's utility and sacrifice against each other. - Knut Wicksell, A New Principle of Just Taxation

As far as I know, coasianism is a recent invention.  So it makes sense that Caplan hasn't already analyzed it.  But will he analyze it now?  Will he compare coasianism to quadratic voting?  Will he compare them both to vote buying/selling?  Will he compare all three of them to regular voting?

Caplan has lots of kids.... I don't have any kids.  So he can correct me if I'm wrong... but if little kids are playing with something that they shouldn't be playing with... generally the best strategy isn't to directly take the item away from them.  The best strategy is to offer them a better item.  Perhaps in some cases this isn't the best strategy.  Like if they are playing with a loaded gun.

Sure it's really reasonable to see see democracy as a loaded gun... but none of us who might perceive it as such are in a position to take it away from citizens.  And even if we were in such a position... would we really want to take advantage of our authority?

Watch "Milton Friedman on Libertarianism (Part 4 of 4)". The interviewer starts to ask him a hypothetical..."if you were dictator for a day" question and Friedman quickly interrupts him and says with great emphasis, "If we can't persuade the public that it's desirable to do these things, then we have no right to impose them even if we had the power to do it!"  Here's the extended version.

Part of the beauty of the free-market is that entrepreneurs, at least in theory, don't have the authority to directly take products away from citizens.  Entrepreneurs have no choice but to provide consumers with better products.  And it's entirely up to consumers to decide for themselves whether the new products are truly better than the old products.  In the multitude of consumers there is safety.

Liberals really don't see the beauty of builderism.  They see that working in a sweatshop is a terrible option but they really do not risk their own resources in order to provide the workers with better options.  Instead they endeavor to get sweatshops shut down.  They also vote for higher minimum wages, stricter regulations and more benefits for workers.  Liberals shoot workers in the feet by skyrocketing the barriers to entry... which makes it far less likely that entrepreneurs will provide workers and consumers with genuinely better options.

Some liberals are somewhat exceptional...

Each of us has a finite number of resources.  So where are you going to put your resources?  Where are you going to put your time and your money?  Are you going to put it into trying to elect somebody into this current system that's broken?  Or are you going to put that into building something? - Margaret Flowers

What's voting?  Voting is an idea.  All ideas are products.  So voting is a product.  And Caplan, probably more than anyone, knows and understands exactly what's wrong with this product.  He knows exactly where there's room for improvement.  And fortunately, in this case, nothing really prevents him from selling/creating a better product.  Ideas don't have artificial barriers to entry.  As far as voting is concerned, nothing technically prevents Caplan from engaging in builderism...

1. explaining why voting is bullshit
2. offering a better alternative

Hmmm... and I suppose that there is a decent amount of division of labor involved.  Specialization does increase productivity.  To use a volleyball analogy... one person sets the ball and another person spikes it.  Caplan sure has done a really wonderful job of setting the ball.  So isn't it unreasonable to expect him to spike it as well?

I don't think that I would have been able to invent coasianism without Coase or Caplan.  But it certainly can't be the case that I can spike the ball on my own.  Replacing voting with a better product will require a multitude of spikers.

In theory, Caplan should be especially interested in products that might be better than voting.  So it seems pretty logical that he would make the effort to review the alternatives to voting and use his considerable energy and expertise to help spike the best ones.

When it comes to Caplan and any given voting alternative... here are four courses of action...

1. He can explain why it's a good alternative
2. He can explain why it's a bad alternative
3. He can ask for explanations
4. He can ignore the alternative

Which course of action is the least beneficial?

Let's say that, thanks in no small part to Caplan, we do manage to creatively destroy voting.  As a result, society's reflection will be a lot less bullshit.  Will Caplan be happy with what he sees?  I'm guessing that he'll be happier... but it's doubtful that he'll be perfectly happy.  It's very likely that he'll spot some flaws.  But at least the flaws will be real.  So if he barks up a tree, the cat that he sees in the tree won't be a mirage cat.  What happens when Caplan and 300 million other citizens are far less likely to bark up the wrong trees?  Progress.  A lot more progress in a lot less time.

I'll finish by sharing some ideas about ideas....


It is ideas that determine social trends that create or destroy social systems. Therefore, the right ideas, the right philosophy, should be advocated and spread. - Ayn Rand, Playboy Interview


It turns out that most of our country is empty for a very good reason: people derive great value from concentrating together in urban areas. First, proximity reduces transportation costs, so producers benefit from being close to their suppliers and customers.  Second, more people living in one place means deeper and more diverse markets for both products and labor. With a large enough urban population, niche markets that appeal to only a small fraction of consumers become profitable to serve. Employers have a better pool of potential workers to draw from, while workers have greater choice in prospective employers.  And third, people living and working close to one another can take advantage of “information spillovers”: cities expand opportunities for exchanging ideas and information, thereby facilitating both innovation and the accumulation of human capital. - Brink Lindsey, Low-Hanging Fruit Guarded By Dragons


Here is another critical point. Rarely does a new idea come into existence and cause just one change. Every change creates a new and different situation, potentially creating further opportunities to be taken advantage of by other alert and insightful individuals. In an open competitive system, there is no reason why the process of discovery and adaptation should ever come to an end state in which new insights can no longer be made and change is no longer possible. - David Glasner, In Praise of Israel Kirzner


This process by which the new emerges is best understood in the intellectual sphere when the results are new ideas. It is the field in which most of us are aware at least of some of the individual steps of the process, where we necessarily know what is happening and thus generally recognize the necessity of freedom. Most scientists realize that we cannot plan the advance of knowledge, that in the voyage into the unknown — which is what research is— we are in great measure dependent on the vagaries of individual genius and of circumstance, and that scientific advance, like a new idea that will spring up in a single mind, will be the result of a combination of conceptions, habits, and circumstances brought to one person by society, the result as much of lucky accidents as of systematic effort. - Friedrich Hayek, The Case For Freedom


The main lesson which the true liberal must learn from the success of the socialists is that it was their courage to be Utopian which gained them the support of the intellectuals and therefore an influence on public opinion which is daily making possible what only recently seemed utterly remote. Those who have concerned themselves exclusively with what seemed practicable in the existing state of opinion have constantly found that even this had rapidly become politically impossible as the result of changes in a public opinion which they have done nothing to guide. Unless we can make the philosophic foundations of a free society once more a living intellectual issue, and its implementation a task which challenges the ingenuity and imagination of our liveliest minds. But if we can regain that belief in the power of ideas which was the mark of liberalism at its best, the battle is not lost. The intellectual revival of liberalism is already underway in many parts of the world. Will it be in time? - Friedrich Hayek, The Intellectuals and Socialism


Orthodoxy of any kind, any pretense that a system of ideas is final and must be unquestioningly accepted as a whole, is the one view which of necessity antagonizes all intellectuals, whatever their views on particular issues. Any system which judges men by the completeness of their conformity to a fixed set of opinions, by their "soundness" or the extent to which they can be relied upon to hold approved views on all points, deprives itself of a support without which no set of ideas can maintain its influence in modern society. The ability to criticize accepted views, to explore new vistas and to experience with new conceptions, provides the atmosphere without which the intellectual cannot breathe. A cause which offers no scope for these traits can have no support from him and is thereby doomed in any society which, like ours, rests on his services. - Friedrich Hayek, The Intellectuals and Socialism


These intellectuals are the organs which modern society has developed for spreading knowledge and ideas, and it is their convictions and opinions which operate as the sieve through which all new conceptions must pass before they can reach the masses. - Friedrich Hayek, The Intellectuals and Socialism


I have already referred to the differences between conservatism and liberalism in the purely intellectual field, but I must return to them because the characteristic conservative attitude here not only is a serious weakness of conservatism but tends to harm any cause which allies itself with it. Conservatives feel instinctively that it is new ideas more than anything else that cause change. But, from its point of view rightly, conservatism fears new ideas because it has no distinctive principles of its own to oppose them; and, by its distrust of theory and its lack of imagination concerning anything except that which experience has already proved, it deprives itself of the weapons needed in the struggle of ideas. Unlike liberalism, with its fundamental belief in the long-range power of ideas, conservatism is bound by the stock of ideas inherited at a given time. And since it does not really believe in the power of argument, its last resort is generally a claim to superior wisdom, based on some self-arrogated superior quality. - Friedrich Hayek, The Constitution of Liberty


Every act of competitive entry is an entrepreneurial act; every entrepreneurial action is necessarily competitive (in the dynamic sense of the word). To compete is to act (or to be in a position to act) to offer buyers a more attractive deal, or to offer sellers a more attractive deal, than others are offering. To do so it is necessary to discover situations where incumbent market participants are offering less than the best possible deals, and to move to grasp the profits made possible by filling the gap so created by the incumbents. Such activity is strictly entrepreneurial. To act entrepreneurially is to enter a market with a new idea, with a better product, with a more attractive price, or with a new technique of production. Any such act necessarily competes with others. - Israel Kirzner, How Markets Work


But unfamiliarity is a disadvantage which, when there is any real value to an idea, it only requires time to remove.  And in these days of discussion, and generally awakened interest in improvement, what formerly was the work of centuries, often requires only years. - J.S. Mill, Representative Government


But I want to draw your attention to something more, to an aspect that allowed Professor Hayek to endure the lonely years, an aspect that may too readily be overlooked. Hayek’s position was made more tolerable by a few sources of external financial support, a few scattered persons with access to funds who recognized the value and importance of ideas. Hayek was given such support for his research, for The Constitution of Liberty, and for the beginnings of Law, Legislation and Liberty. He was supported indirectly, but importantly, via support of the Mt. Pelerin Society, the international society of market-oriented scholars and leaders, a society that was created and maintained almost single-handedly by Hayek. He was supported by lecture invitations to such as the old Volker Fund conferences, where he could try out his ideas, and where so many of my own generation first came to know both the man and these ideas. I cannot list all of those who supported Hayek in those lean years; I do not know who they were. I only know that they were an extremely small group of men and foundations, and I also know that the Realm-Earhart Foundations were almost unique in sticking to Hayek through the very worst of times.

I think we should draw some lessons from this experience. We should, I think, appreciate that ideas matter, and that financial support for the generation of ideas matters. Those who supported Professor Hayek in the lonely years were courageous in their expressions of confidence in the man and the ideas he represented. They were not demanding of him some immediate relevance to then-topical issues of policy; they were not demanding of him that he try to communicate his ideas to mass audiences; they were not demanding of him that he produce fancy numbers to test self-evident hypotheses. - James Buchanan, Notes on Hayek


Fourth, while I don’t see much, if any, benefit in engaging with actually existing conservatism, that doesn’t mean that we should ignore conservative, and libertarian, ideas. You don’t have to be an unqualified admirer of writers like Burke, Popper or Hayek to concede that they made valid criticisms of the progressive ideas of their day, and to seek a better way forward. Some examples of the kind of thing I have in mind

Popper’s critique of historicism. After thirty years in which teleological claims of inevitable triumph have been the stock in trade of Fukuyama and his epigones, the left should surely have been cured of such ideas, but their centrality is evident in the very use of terms like “progressive”. It’s important to recognise that beneficial change is not an automatic outcome of “progress”

Burke and his successors on the need for beneficial reform to be “organic”, in the sense that it reflects the actual historical evolution of particular societies, rather than being based on universal truths that are applicable in all times and places

Hayek on the impossibility of comprehensive planning. No planner can possess all relevant information or account for all possible contingencies. We need institutions that respond to local information and that are robust enough to cope with unconsidered possibilities. In some circumstances, but certainly not all, markets fit the bill. - John Quiggin, After the dead horses


In a totalitarian State or in a field already made into a State monopoly, those dissatisfied with the institutions that they find can seek a remedy only by seeking to change the Government of the country. In a free society and a free field they have a different remedy; discontented individuals with new ideas can make a new institution to meet their needs. The field is open to experiment and success or failure; secession is the midwife of invention. - Lord Beveridge, Voluntary Action


This is a reminder that one of my least-favorite sayings about politics is the idea that democracy is the worst form of government except for the alternatives. Not that I favor dictatorship, but this often seems to me to reflect a failure of imagination. There are lots of non-authoritarian modes of governance, including selecting people by lottery (like we do for juries), plebiscites, direct citizen input (as in this tax choice concept), along with different balances between elected officials, appointees, and civil servants. It’s important to actually think about the flaws in our current approach and whether better ideas exist. - Matthew Yglesias, Giving Taxpayers Choice Could Boost Satisfaction With Big Government And Boost Social Spending


I was writing a simple teaching post, on ideas and increasing returns to scale, in micro and macro. I wrote down "Ideas are non-rival". Then I thought I had better explain what I meant by that. Then I thought about professors, who do research (thinking up new ideas), and teaching (communicating existing ideas to other people). Then I thought about how some professors like research but don't like teaching. Then I thought about this post.

Sure, two people can use the same idea (ideas are non-rival), but can't eat the same apple (apples are rival). But the second person can't use that idea unless the first person communicates that idea to the second person. The first has to teach it, and the second has to learn it, and teaching and learning are (sometimes) costly. The cost of communicating the idea to the second person might even be greater than the cost of the first person coming up with the new idea in the first place.  Sometimes it might be cheaper to reinvent the wheel than walk to the library. - Nick Rowe, Are ideas really non-rival?

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