I’m doing a review of Bryan Caplan’s The Myth of the Rational Voter so I’ll save the overview until later. But I really rather love the way that, in attempting to refute the central argument, Kevin Drum actually makes the point.
We went to war against Nazi Germany even though Hitler was as good a
trading partner as the Weimar Republic. We pass minimum wage laws
because our guts tell us that it’s wrong to expect an adult in a rich
country to work like a dog seven days a week for subsistence wages. And
some of us continue to press for national healthcare not simply because
it addresses known market failures (though it does), but because we
think it’s fundamentally wrong to make people beg, plead, and scrape in
order to receive decent medical care.
The free market rejects all of these things. But in the voting
booth, sometimes the better angels of our natures take wing for a
moment and persuade us to try to make ourselves into better people. The
free market pushes back, of course, and warns us that we can’t always
have everything we want. Thankfully, though, it doesn’t always win.
Rationality is a high virtue, but it’s not the only virtue.
Well, "we" as in Americans, went to war with Nazi Germany because Hitler declared war on the US. But leaving that slip aside, minimum wage laws are indeed a perfect example of Caplan’s point.
The complaint is that an unadulterated market outcome produces a result that we don’t like. Inequality is too great, people are working like dogs for subsistence wages…yes? I’m not misrepresenting the situation? Great, we can indeed solve that by political means. We have any number of options, more education to raise productivity, more union power perhaps to improve bargaining positions, we could, if we wished, via the tax system, simply give those hard working poor more money: we could even, if we worked at it, simply mandate that everyone gets subsistence wages before they even start working. The citizen’s basic income approach. We could also increase the minimum wage.
No doubt there are many more policy options but when we try to decide between them we must, of course, be rational about doing so. We want to get the maximum of what we desire with the least bad effects and at the lowest cost. That is a reasonable definition of rationality? The most bang for our buck in trying to solve a perceived problem?
Now, of those different approaches there are two that are widely discussed in economic circles. Giving the working poor more money (otherwise known as the EITC) and the minimum wage. Which of these alleviates more poverty, reduces inequality the most, at the least cost to the rest of society? Expanding the EITC.
Which does Drum severally propose, support and cheer the introduction of? A higher minimum wage, a less rational answer to our problem.
Caplan’s point, that voters are less rational when voting than when being economic agents seems to be bourne out.
I don’t know enough about Drum’s proposals on national healthcare to know which specific flavour he supports, so this is more general. There are indeed those in the US who are agitating for a reform of the health care system there. Yet some of these people are (note please, some,) pointing at, say, the French system and noting that the OECD rates it as the best in the rich world. Excellent, let’s go copy that!
That’s entirely rational: we want a better/best health care system, let’s copy the better/best one. They then go on to say that the US therefore needs a single payer system (the French system is not single payer), that health insurance needs to be decoupled from employment (the French one is coupled to it), that we no longer require private insurance companies (the French system depends upon them), that health care should be free at the point of use (you pay for it in France…I believe that this is an allegation that Michael Moore makes in his new movie, Sicko), that there should be no co-payments (there are in France) and even that we should have a single provider system (the French system is multiple provider).
Isn’t that a reasonable description of someone being irrational in a political context?
Robert Waldman and Mark Thoma both have more on this: no, they don’t agree with my view. Quelle surprise.
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