Public choice scholars often say that democracy underperforms the market because of:

1. Infrequent choice. In the market, consumers can continuously change their minds. In politics, however, voters are stuck with their choice until the next election.

2. Bundled choice. In the market, consumers can pick and choose what they put in their grocery cart. In politics, however, voters choose between two indivisible policy packages.

These are good stories, but they overlook a few big facts. Namely: Our most important market decisions – buying a house and taking a job (not to mention getting married!) – are, like elections, both infrequent and bundled. Whether you’re voting for a politician, buying a house, or taking a job, it’s very costly to say “re-do” just because you’re disappointed. And whether you’re voting for a politician, buying a house, or taking a job, you choose between big baskets of pluses and minuses.

So infrequent and bundled choice is a big deal in markets as well as politics. But the natural response is for (a) home-buyers/workers to shop around for a while to compensate for lock-in; and (b) for home-sellers/employers to do some detailed market research to triangulate what they’re doing right and what they’re doing wrong. These work well enough in markets; and unless elections have some other major defect, there’s no reason why they couldn’t work in politics, too.

Yes, some differences between my market examples and elections remain. But they’re smaller than they appear. If you say, “If you’re really disappointed with your house, you can just sell it,” I’d reply, “And if voters are really disappointed with their politician, they can just have a recall election.” Neither’s easy, but both happen.

Of course, if you just say “Labor and real estate markets work a lot better than democracy – that’s the difference,” I’ll agree with you. Even when choice is infrequent and bundled, markets do OK – which indicates that the key difference between markets and politics lies elsewhere.