Caplan, Bryan. 2007. The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Princeton, NJ. Princeton University Press.
It’s all official. My book, entitled The Myth of the Rational Voter: Why Democracies Choose Bad Policies, will be published by Princeton University Press in early 2007. I put the final version in the mail today.
Even better, my book is already under attack. Tyler Cowen lists an exaggerated version of one of my main theses as a leading economists’ lie:
3. People may make mistakes when the stakes are small, but as they become more decisive over larger prizes, the irrationality goes away. (Name any major politician or how about Tom Cruise on Oprah?)
The position I defend in my book is the weaker one that people make more and larger mistakes when the stakes are small. But arguing with Tyler about this for a few years definitely helped me to refine my position. What I realized in the end:
1. In the short-run, raising the stakes sometimes does cognitively backfire. Think about “stressing out” on an important exam. In the long-run, however, Tyler’s just wrong. High stakes lead to more studying, which leads to better performance. In markets, where people suffer from their own mistakes, they try to learn, and are partly successful. In religion and politics, where mistakes have little or no consequence for the believer, people avoid learning, and stay in the dark.
2. To the best of my recollection, Tyler never granted my point that people’s views about religion and politics are especially demented. He even slipped into the last refuge of the positivist: “There’s no way to measure, so we have to be agnostic.” But I think he’s just being contrary (or maybe slipping into a Tyrone role). Virtually every person I’ve argued with, regardless of his standpoint, has been willing to grant this point. It’s obvious.
On Tyler’s specific examples:
1. “Every major politician” is being irrational? Come on! They’re playing to their audiences, and irrational audiences like politicians who agree with them. But as far as gaining and holding power is concerned, politicians are very good at what they do. With 20/20 hindsight, you can carp on their errors. But in all fairness, you have to adjust for the fact that they live under a microscope, and face complex strategic problems.
2. How is Tom Cruise on Oprah supposed to show anything? He “jumped the couch” on May 23, 2005. A month later, War of the Worlds premiered, and Cruise got the biggest paycheck of his career. Looks like classic movie star attention-seeking to me. We don’t know how well his movies would have done if Cruise kept his mouth shut, but it’s hardly clear that his antics have hurt his bottom line.