Bryan Caplan did a recent post discussing Garett Jones’s new book, which advocates “10% less democracy”. I have not read the book, but this caught my eye:
7. Garett’s chapter on the EU greatly surprised me. Given his vocal skepticism about low-skill immigration in general and refugees in particular, I expected him to concede that the EU needs at least 10% more democracy. Instead, he argues that the EU is underrated. The European Central Bank works well, and “while the EU may get press for making it illegal to put little unmarked bottles of olive oil on your restaurant table, it’s reasonable to believe that joining the EU helps your nation’s economy overall.” The EU, in Garett’s phrase, is a “pro-market club.” While he concedes that fear of immigration partially motivated Brexit, the untold story is that the UK didn’t benefit much from the EU because the UK is one of the most pro-market members of the club.
Not only does the ECB not “work well”, it’s been an almost unmitigated disaster. It is an almost perfect example of project that reflected the wishes of elite technocratic opinion, but which turned out very badly. ECB policy largely explains the Eurozone depression of 2008-13.
Sam Bowman directed me to another example. Elite opinion discouraged mask use in the early stages of the epidemic, while uninformed people (like me) asked why masks were effective for medical workers but not average people. We now know that the common sense view was correct and the elite view was wrong:
It is plausible that elite opinion is better, on average, than the average view. But that does not necessarily imply that we’d be better off with less democracy, as there is no guarantee that the reduction in democracy would be filled with the right sort elite opinion. After all, dictatorships have close to 100% less democracy, and most certainly don’t rely on elite opinion. So I remain agnostic but a bit skeptical of the claim that less democracy would be better.
READER COMMENTS
Alan Goldhammer
Jun 15 2020 at 2:03pm
I think Philip Tetlock has convincingly demonstrated that there are superforecasters who do much better at predicting things than elite groups. Common sense than good thinking are often times better than reading about elite opinions.
Garett Jones
Jun 15 2020 at 4:02pm
Ah, comparing one hyperselected group to another! An important comparison between two kinds of elites, but not, alas, a comparison of elites versus the masses.
And as I say on the first page of 10% Less Democracy:
The first chapter of 10% is free here.
LC
Jun 15 2020 at 8:39pm
Garrett:
Going through your first chapter, I get the impression that your argument seem to be “10% less government” rather than 10% less democracy. After all, isn’t Senator Hatch’s manner change during election cycles because 1.) we give too much power to government 2.) we have too little direct democracy, so the end result is an elected representative who is susceptible to being influenced (hijacked) by a particular outspoken (or well funded) group and can’t satisfy the desires of the majority she or he is supposed to represent?
Let’s look at the example of US today, would anyone seriously argue that we have too much democracy because the police have “qualified immunity”? Similarly, when a Fed is beholden only to the Executive and Legislative Branch, is it too much democracy? When a representative or senator or even the president can behave as a thug, is it too much democracy?
Finally, I’d like to conclude with an anecdote a Chinese economist told me after visiting US. (This was approximately 20 years ago before China ascended to WTO.) He said in America, the large corporations are exactly like how we used to run China as a planned economy. There is the planning department that made forecasts and plans, the many levels of managers who oversaw the execution and the CEO reported out that company met its targets. Yet we (China) failed miserably, not because we ignored the experts, but rather because we relied on the experts and over simplified a really complex economy. That conversation has stuck with me because an expert or group of insiders may have much better views on a single or a small range of subjects but no single group can have an adequate view of a system as large and as complex as an economy. The answer is not less democracy but more direct democracy in conjunction with less government.
Oscar Cunningham
Jun 15 2020 at 2:30pm
I suspect that on monetary policy the ‘common sense’ view would have involved going back to the gold standard, which would have been worse than the ECB.
Scott Sumner
Jun 15 2020 at 3:51pm
I doubt that. In a recent referendum, 76% of Swiss voters rejected a “100% money” plan. I’d expect a similar number to reject the gold standard, indeed even a higher figure.
Matthias Görgens
Jun 16 2020 at 12:20pm
And even a gold standard could probably be made to work more or less with enough free banking.
Though the people voting in favour of a gold standard would probably also vote for the 100% Vollgeld..
Idriss Z
Jun 15 2020 at 4:41pm
Well put Scott, although I minorly disagree about your characterization of the ECB (there are many things that are unmitigated disasters in the world, this bank is not one on that level considering the resilience to the depression by most members not named Greece or Italy). More relevantly, I think your dictator analogy is appropo because Elites do not agree on everything, so then you would need a democratic majority of them to agree on something, to which we would need 10% less of that, etc. (pretty sure the limit eventually goes to one). What the argument does miss, as you allude to, with elite opinion being ignored even if they have they power is that democracy reduces agency costs-> the more people you are held accountable by, the more difficult in theory it is for self-enrichment. This idea seemingly is too theoretical to have value and too easily abuse-able (does any one seriously think this will not directly lead to more mass voter suppression?) to be responsible.
Scott Sumner
Jun 16 2020 at 2:09pm
Yes, but you gloss over the fact that the “resilience to the depression” would not have been needed if the ECB had not created a depression.
Certainly there are much worse things in the world, WWII for instance, but within the realm of modern central banking I’d say the ECB gets a D minus.
Idriss Z
Jun 16 2020 at 8:23pm
Fair enough, I’ve always assumed the housing market was the root of the recession, but it’s on my “to look into now,” thank you.
Steve
Jun 15 2020 at 5:21pm
I haven’t read the book (sorry Garett) but isn’t part of the point to reduce transaction costs, frictions, decision fatigue, etc? Even if experts’ track record is on par with the general public, certainly it would be better in certain areas to just let someone plow ahead and implement a decision without holding a referedum?
On a separate note, the mask debate has me enthralled currently. It seems to me that the overall thrust of the situation is people conflating “there are no studies that show mask wearing has a significant effect” with “masks have zero effect”. Those two statements are not identical and you draw the wrong conclusions if you operate under the assumption they are.
P Burgos
Jun 15 2020 at 5:40pm
Having lived in China, I think that the US would benefit from having fewer elected officials and party primaries that gave more weight to those more committed to the party. The input of the voting public should only be used where voting promotes accountability of elected officials, and the political parties should be strong enough that they can punish and promote people based upon some combination of competence and service rendered to the party.
There are so many elected officials in the US (I think the local dog catcher is an elected position!) that there is effectively no accountability for a lot of government positions, because the voting public simply does not take the time to do enough research to punish or reward officials for a good or bad job. As China shows, if you have a sufficiently strong party, that party can impose accountability on a lot of government officials.
Right now, between excessive numbers of elected officials and the weak discipline of the two main US political parties, a lot of elected officials effectively have no oversight.
Scott Sumner
Jun 15 2020 at 7:32pm
You may be right that we should have fewer elected officials, but given that America’s political system works far better than China’s system, I don’t understand the first four words of your comment. If anything, China is an argument for the US system.
Wouldn’t it make more sense to say something like, “Having lived in Switzerland, I think America should have more democracy”?
P Burgos
Jun 15 2020 at 11:54pm
I have never lived in Switzerland, so I am not sure that taking ideas from Switzerland would work for the US.
Also, I disagree that US government is clearly better than post-Mao CCP. On what metrics is the US clearly superior to China in a way that goes beyond “one is a developed country, one is a developing country”? There isn’t anything about the US response to the Covid-19 that clearly shows superiority of governments in the US to those in China. And the US still locks up more people in prison than China. There seems to me to be something quite off trying to claim that the imprisonment of Uyghurs is somehow worse than US imprisonment of convicted criminals. I cannot see how imprisoning millions of people for rape, robbery, murder and theft is any argument for the superiority of the US, and in fact it seems to me to severely undercut any such claims.
Though I would certainly concede the point that comparing Switzerland or Canada or many other democracies to China would show the superiority of democracy to CCP rule in some quantifiable ways.
But I wasn’t arguing for the US to cease being democratic, but rather observing that voting for elected officials does not seem to do a good job of producing competent or accountable government at state and local levels. Given that voting isn’t working, there is a certain degree of logic in looking at other ways of enforcing accountability on officials. Local and provincial officials in China generally deliver what their higher ups demand, which is competent governance that helps to legitimate the continued rule of the party. US officials at state and local levels seem more apt to govern in ways that help to delegitimate continuing rule of their own political party.
P Burgos
Jun 16 2020 at 12:00am
That first sentence above was an attempt to convey that I do not have sufficiently knowledge of Switzerland to really take any lessons from it to apply to the US.
Scott Sumner
Jun 16 2020 at 2:18pm
The US government doesn’t tell people how many children they can have, or where they can live. We have not nationalized a huge chuck on the economy, with grossly inefficient SOEs. Outside airports, we don’t have the insane system of security that the Chinese use for all sorts of areas of their economy. We have a relatively free press. City planning in China is a dystopian nightmare, with the cities being built in the most inhuman way possible. Environmental controls are pathetic.
And no, putting murderers in jail is not just as evil as putting Uyghurs in jail. (A better argument would be our drug war, with really is evil on a CCP scale.)
Our government is far better than theirs—it’s not even close.
P Burgos
Jun 16 2020 at 10:27pm
China doesn’t tell people how many kids to have, though it does deny state services to some children from some families who exceed the “limits”. Also, the Chinese government doesn’t restrict where people can live. Again, what they do is to deny people access to schools, hospitals and the pension system if they move away from the place where they are registered, though the CCP is slowly changing that.
Lastly, a nation that raises millions of its children to commit murder, rape, robbery, etc., is certainly committing an evil on the same level as the mass imprisonment of the Uyghurs. It isn’t the imprisonment of the criminals that is evil.
eric mcfadden
Jun 15 2020 at 7:55pm
It you are protecting yourself from something on the outside it’s a mask or barrier. If you are keeping something you make from contaminating others then it’s a diaper.
Have fun wearing your face diapers.
Max Callion
Jun 15 2020 at 8:51pm
Singapore is the example for less democracy and Switzerland is the example for more democracy. Singapore carries the larger downside risk so over the long term it’s better to be Swiss than in Singapore.
Scott Sumner
Jun 16 2020 at 2:19pm
Yes.
Rajat
Jun 16 2020 at 8:34am
Does Jones’s argument in this book cause you at all to question or second-guess your strongly positive opinion of his previous book on the ‘hive mind’?
Scott Sumner
Jun 16 2020 at 2:20pm
I haven’t read his new book. But even if I didn’t like it, that would not cause me to revise my view of his previous book.
Thomas Hutcheson
Jun 16 2020 at 10:12am
It depends on which 10%, and which elite opinion. 🙂
Phil H
Jun 16 2020 at 11:08am
Surely the key here is to get away from the binary thinking of “popular opinion vs elite opinion” and introduce a couple of new ideas, something like “best available knowledge” and “institutions that yield better/worse outcomes”. (Obviously the criteria for being better/worse will be controversial, but not cripplingly so.)
The point about democracy for me is *not* that it leads directly to better decisions; but that it is a mechanism for generating elites with inbuilt term limits and safety valves.
In this sense, asking whether the elite get it right more often or popular opinion gets it right more often is the wrong angle. It’s like asking whether the defense or the prosecution is right more often. The point isn’t for either of them to be right. The point is for the mechanism as a whole to either be optimal or to avoid certain existential risks.
Given how natural selection works, I expect those mechanisms that avoid existential risks to win out; potentially more “optimal” institutions will perish.
Matthias Görgens
Jun 16 2020 at 12:18pm
Elite opinion vs democracy is a false dichotomy.
How about people living according to their own opinion where possible?
(Sane argument as in Bryan Caplan’s Myth of the Rational Voter. Ordinary people make many good decisions for themselves. But they don’t show such competence when voting.)
The Freeconomist
Jun 16 2020 at 3:41pm
In the democratic sphere you have both bad incentives and insufficient knowledge for good decision-making.
In the technocratic sphere you have high levels of knowledge but still bad incentives.
The only sphere that 1.) contains all existing knowledge and 2.) provides the incentive to use this knowledge optimally, is the market.
Today, goals are determined in the democratic sphere and the decisions on how to achieve those goals are made either in the technocratic sphere (as in the case of monetary policy) or (as in most other areas) in the democratic sphere too.
Given that the market is the only sphere that contains all existing knowledge and provides the incentive to use this knowledge optimally, my conclusion would be this: only the goals should be determined within the democratic sphere, while decisions on how to achieve those goals should be made by prediction markets.
In other words: 50% less democracy.
Mark Brady
Jun 18 2020 at 1:28am
A market doesn’t operate in isolation from a property rights regime. What determines the choice of a property rights regime?
The Freeconomist
Jun 21 2020 at 2:32pm
@MarkBrady: what I’m arguing for is that proposed changes to the law (e.g. regarding the current property rights regime) are not decided upon by politicians but by a betting market. If and only if a betting market estimates that a proposed law would increase expected national welfare, the proposed law is adopted. The metric for measuring national welfare (the goal) would be determined democratically, while prediction markets would determine which policies to adopt in order to maximise national welfare.
This form of government is called futarchy and was invented by Robin Hanson. You can read more about it here: http://mason.gmu.edu/~rhanson/futarchy.html
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