Libertarian Optimism Bias vs. Statist Pessimism Bias

I’ve been meaning to reply to this Andrew Gelman post in which he points out that "the right" used to be against material progress while "the left" was for it, but

Nowadays, the debates usually go in the other directions, with people on the left being less positive about material progress and people on the right saying that things are great now and are getting better.

Andrew kindly points to my skeptical take on those who use happiness research to argue that consumer capitalism is making us miserable, and continues:

The connection here to "overcoming bias" is that the question, "Are things going well now?" is (a) politically loaded, and (b) is commonly treated as a factual question.  I suspect that Shaw and Chesterton (as well as modern commentators) are showing bias in that they derive their perspective on the pluses on minuses of a modern economy based on political judgments.

I had a similar thought recently while going back and forth with Barry Schwartz in the recent happiness issue of Cato Unbound. However, it doesn’t strike me so much that a left-right sort of bias drives views on whether things are sunny or dark. Rather, I suspect a bias for and against government action in certain domains may be doing some of the work of motivating cognition. Nothing beats a "crisis" to rally support for a big government effort. Right statists constantly drum up moral panics about sex and drugs. Also, Mexicans are "invading" and terrorists will surely blow us all up while singing the Star Spangled Banner at baseball games if we don’t allow the executive Jack Bauer to torture military detainees whenever he wants. Similarly, left statists warn that the shores of Manhattan will be inundated by rising oceans and very cute baby polar bears will die in droves. Also, inequality is soaring, threatening the foundations of democracy. And the middle class lives in terrifying "economic insecurity." And so on.

By comparison to people on both the left and the right who would like the government to do something, libertarians can seem either ostrich-like, pollyanna-ish, or both. I suspect the "everything is going to be OK so the government can just stay out of it" bias played a key role in motivating many conservatives and libertarians to be favorably disposed toward skeptical findings about global warming. Let’s call this "libertarian optimism bias." But I also suspect that the "OMG! there is a huge crisis so the government has to do something NOW" bias is at play at least as strongly in a number of important issues. Let’s call this "statist pessimism bias."

Perhaps it is a partly a symptom of my libertarian optimism bias, but I am completely convinced that the government badly underestimates real wage growth [pdf] due to, among other reasons, the difficulty of determining the value of new goods and quality improvements in existing kinds of goods. Also, I am completely convinced by John Mueller’s case that large terrorist attacks are massively improbable, and that it is a waste of money trying very hard to prevent them. However, I have provoked raised voices, if not outight shouting, simply by laying out the case for both propositions. What’s going on?

In the first case, it was made clear to me that voters will be complacent about poverty and inequality if they are told that they really are doing better economically than the statistics say. My reply was, "But the evidence seems to say that people are doing better." In the second case, it was made clear to me that we will all be killed by terrorists if we dangerously allow ourselves to believe that we will not be killed by terrorists, because then we won’t spend the huge amounts of money necessary to prevent terrorist attacks. "But the evidence seems to say we probably won’t be killed by terrorists," I repeated, to no avail. These cases both seemed to me clear instances of strongly motivated statist pessimism bias.

My experience writing my happiness study was often just surprise. It turns out that the evidence simply doesn’t say what lots of commentators say it says. Relatively dispassionate empiricists like Ruut Veenhoven, chief of the World Database of Happiness and the Journal of Happiness Studies, will tell you that people in wealthy liberal market democracies are quite happy and getting happier, but that’s not what you’d think happiness research says if you just read about it in newspapers and magazines.

Perhaps it is not surprising that you often don’t hear that air quality has improved, that lifespans are increasing, or that prices indicate that we are not running out of some natural resource until some libertarian like Julian Simon or Indur Golkany pops up to tell you about it, because often there is no other constituency obviously served by pointing out that there is no problem — especially when pointing it out may score you bad corporate, political, or social PR. I suspect that I am in fact somewhat biased toward evidence that says that there is no problem when the existence of the problem too-tidily serves to advance common, pre-existing political desires. The fact that I was in fact a little too disposed to be persuaded by skeptical takes on global warming in the mid-nineties has chastened me (though I plead youth and naivete!).

But I don’t worry too much. Here’s why. I think the general risk-averse fearfulness of people creates a very strong  incentive for those who have and seek political power to make things look worse than they really are, in this or that respect, in order to motivate support from an otherwise listless public. Since most people prefer to be a member of a going political coalition, rather than sit semi-uselessly on the sidelines like libertarians (it is possible we are just a deviant personality type), most intellectuals will probably identify with a competitive coalition, adopt it’s biases about how bad things are (and/or pick a coalition because it shares preexisting biases), and avidly dig up all the evidence that this or that really is a crisis. The related motivation to shout down all those who deny the putative crisis is also strong. So if libertarians like me get too vocally chipper or oblivious, the evidence that this is so cannot possibly escape our attention, and those of us susceptible to shaming are shamed.