Rule By Fools Is the Rule
By Bryan Caplan
Brad DeLong keeps asking “Why Oh Why Are We Ruled by These Fools?” (see here, here, and here for starters). This makes me wonder whether he’d ask the same question if he came across the following passage from Jeffrey Cohen’s Presidential Responsiveness and Public Policy-making:
As his biographer Reeves pithily observes about Kennedy (and all other presidents), “Kennedy had come to office in the great tradition of American presidents, more or less blissfully ignorant of economics”… His knowledge of macroeconomics was so severe that he asked his economic advisor, Walter Heller, chair of the Council of Economic Advisors, “Now tell me again how I distinguish between monetary and fiscal policy?” Heller replied, “Monetary policy is ‘M’ like Martin [William McChesney Martin, chair of the Federal Reserve Board].”… Later, when Martin’s term was about to expire, Kennedy asked how he would remember the difference between fiscal and monetary policy without Martin on the Board. Heller had to remind him that another member of the FED was Mitchell, another “M”…
However Brad would react, this passage confirms my suspicion that democratic rule by fools is perfectly normal. Or to be more accurate, in a democracy our rulers are older versions of the popular kids from high school. The only difference is that politicians are champions in the Olympics of popularity contests. They are painfully weak on substance, but have an amazing ability to make people like them. And if they have to choose between being right and being popular, they don’t think twice. They’re Olympians; their overriding priority is winning.
I flesh out this story in much greater length in my paper “The Logic of Collective Belief,” (Rationality and Society 15(2), May 2003, pp.218-42).
A politician who does not have rational expectations about the impact of his policy stances on his career pays a high price, so in this area the standard arguments for rationality (Muth 1961) are compelling: Politicians who systematically misunderstand voters’ feelings forego large opportunities for political profit. They have an incentive to learn from mistakes and hire expect advice. Systematic mistakes about what the voters want also open a politician to takeover bids from more rational challengers.
However, it does not follow that politicians will be rational about the actual impact of the policies that they implement. They merely need to gauge voters’ reaction to their policies; if the voters have irrational expectations about what policies will accomplish, a politician who rationally second-guesses them gets little benefit. In fact, if it is indeed impossible to fool all of the people all of the time, politicians who share the irrational assessments of their constituents may actually be at a competitive advantage compared to rational politicians who cynically pander to the prejudices of the electorate.
Thus, Brad’s question isn’t so hard to answer. “Why oh why are we ruled by these fools?” We’re ruled by fools election after election because the majority habitually prefers affable fools to disagreeable pedants.