Memo to self: check Will Wilkinson more often. From last week: I say, again and again, that it is an embarrassing non-sequitur to argue that people are "irrational" and then leap to the conclusion that they need benevolent paternal guidance from the state. After all, if people are irrational then voters are irrational, politicians are irrational, bureaucrats are irrational, etc. … There is no way to wriggle out of the fact that people who win elections are just like the rest of us. … I don’t doubt that non-terrible policies are sometimes successfully enacted. To doubt that would be a bit like a market skeptic doubting that anyone ever succeeds in buying a candy bar. That would be terrifically dense. What I doubt, very strongly, is that the discovery of "irrationalities" undermines the authority of market institutions more than it undermines the authority of government institutions.
Alan, that's quite interesting. Is the study about diet and inmate behavior online anywhere? My own experience with government-issued diets is the school lunches I get every day as a teacher, and I'm always impressed with them - but I acknowledge that other programs might not be as good.
Robin, I agree that the solutions you provide above are very good ones. No doubt if people are rational enough to use them, they will work better than paternalist intervention would. But people will only use those solutions after they realize they're being irrational. The advantage of paternalism is that as long as people recognize someone else is being irrational, they can help him regardless of whether that person know he's being irrational himself. And in my experience, most irrational people don't know they're being irrational; I certainly didn't before I started reading this blog.
Yvain, in the UK we have good evidence that prisoners behave better with more nutritious food. Poor diet is leading to erratic behaviour. Unfortunately the Home Office never gets round to acting on this. So the prison inmate example serves to persuade us Brits that paternalism doesn't work.
I could see how bureaucrats would be able to ignore the individual's biases, but why would it follow from that that the bureaucrat would not introduce as much bias of his own? I agree their biases would be different, but I can't see them being less.
I don't think diets are a good example, because we can't show that "healthy and well-balanced" is necessarily what people want. The snake oil example seems better to me, because we can objectively show that snake oil is useless. Of course, in that situation the buyer isn't purchasing a cure at all, he's purchasing self-deception or a way to show his daughter that he cares.
I haven't been here long, but I don't think gambling prohibitions are a good example on Robin Hanson's blog ;) Biases against gambling have held off innovations in decision-making (via prediction markets) for who knows how many years (decades?).
I might be missing something, but I see a clear reason government can be less biased. A paternalistic government can be less biased than individuals because it's less personally involved with the situations it considers. Bureaucrats making future decisions for other people are less likely to be biased than a person making a decision for himself right now.
Consider diets. Most people choose their own diet. Some people, like prison inmates and students in school lunch programs, get their diets chosen by the government. Most people who choose their own diet will to one degree or another make decisions based on temporary desires ("I'm really in the mood for a bacon burger"). But the government bureaucrats who decide other people's diets have no personal stake in the matter, and usually end up designing something healthy and well-balanced.
Another example is gambling. Most countries have either banned or restricted it for paternalistic reasons. If you're in Vegas and really need a few hundred bucks quick, it's pretty hard to resist the temptation to play the slots. But if you're in Washington D.C. thinking about the costs and benefits, it's easy to decide that the latter outweigh the former.
Or to take a favorite example of Robin's, consider health care. If your daughter's dying of cancer, and someone tells you in a very sincere voice that snake oil is certain to save her life and can be yours for the low, low price of $999.99, you'll probably buy the snake oil even though all those ivory tower scientists in the Vast Allopathic Conspiracy say it doesn't work. Doctors tell me stories about this sort of thing all the time. It's much easier for a bureaucrat in D.C. to review the evidence, decide snake oil should be banned as quackery, and save you a thousand dollars.
This isn't to say that governments aren't prone to different sorts of errors, like those springing from corruption, but they don't need to suffer exactly the same biases that their individual citizens do.
Thomas Jefferson has a fairly well-known quote expressing the same sentiment:
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the forms of kings to govern him? Let history answer this question."
I haven't been reading this blog for long, but I wonder: could we come up with some metric for irrationality? If so, could we apply it to people in their roles as voters, politicians, consumers and entrepreneurs? I would bet a good amount of money the former two roles would be far less rational than the later two, since the costs of being irrational are much lower for them. A lot of rich people are very irrational when it comes to the 'finer' things in life such as wine and art because they can afford to be. Event still, I'd bet political irrationality is more wide-spread.
Couldn't some paternalists, particularly the democratic paternalists say that 80% of the people are responsible enough to take care of themselves and to elect competent politicians to care for the irrational 20%? Would they not say the most of the irrational are poor, poor in such a rich time and place due to being irrational?
This reminds me of the following exchange from the first episode of Invader Zim:
<quote>Zim: You can't have an invasion without me! I was in Operation Impending Doom 1! Don't you remember?Tallest Purple: Oh yes. We remember…(flashback)Zim: (in giant robot destroying a city) AH HA HA HA HA HA HA!Pilot: But sir, we're still on our own planet!Zim: Silence! Twist those knobs! Twist those knobs! You! Pull some levers! Pull some levers!(end of flashback)Zim: I put the fires out.Tallest Red: You made them worse!Zim: Worse… or better?</quote>
Government regulation is a political market, wherein the ultimate currency is based on one person one vote. Is there a better decision market?
Actually, whether democratic politics is an "efficient decision market" in some sense is a hotly debated question in political science and public choice theory. One reference is Caplan, B. "Rational Irrationality and the Microfoundations of Political Failure" Published in Public Choice 107(3/4), June 2001, pp.311-331. See also his work "The Myth of the Rational Voter" which discusses this issue in depth.
9:46am - Now if you're talking about increasing the efficiency of our political market, that is welcome for serious discussion.josh, I agree that OPOV is a compromise to increase the probability of adoption of the system. Practical constraints (# of seconds until saber-tooth tiger catches up to you, 1 vote guarantee per person to win over the population to accept democracy or democratic republic, trade reporting requirements and other regulatory costs for smooth market operations) compromise perfect ideals. Yet popular voluntary adoption is pretty much a requirement unless you force compliance of whatever system upon those who reject the alternative systems.
Can we improve the OPOV to explicitly include intensity of preference (though special interest groups seem to approximate that for now) and rationality of choices (though overcomingbias and other discourse forums do encourage this)? Sure, let's talk about those parts, not throw out OPOV because it's not the absolute authority of rational decision making.
One person one vote is a flaw, not a benefit of democracy as a predictor of good policy. There is no way to differentiate intensity of preferences, let alone the fact that people aren't necessarily voting based on predictions of good utilitarian outcomes.
Who am I to dispute your judgment that I "have not actually presented a good argument?" I merely request that you file the below under 'argument' instead of 'sloganeering.'
9:46am - [unlike the one-person-one-vote political market of today], decision markets ignores this one person one vote reality--a flaw that prevents adoption of the system by those who perceive/realize they are the market losers.
The implication is that status quo has an advantage in voluntary adoption of the system, whereas competing alternatives (that I'm aware of) have tragic flaws of adverse selection (the losers will reject adoption).
I would suggest that a sloganeering does not necessarily invalidate the meaning.
Well, yes, of course you are right: merely because you have not actually presented a good argument but merely a slogan, does not mean that there isn't a good argument to be made, possibly as an expansion of your slogan. That being the case, you have not actually presented a good argument but merely a slogan.
Alan, that's quite interesting. Is the study about diet and inmate behavior online anywhere? My own experience with government-issued diets is the school lunches I get every day as a teacher, and I'm always impressed with them - but I acknowledge that other programs might not be as good.
Robin, I agree that the solutions you provide above are very good ones. No doubt if people are rational enough to use them, they will work better than paternalist intervention would. But people will only use those solutions after they realize they're being irrational. The advantage of paternalism is that as long as people recognize someone else is being irrational, they can help him regardless of whether that person know he's being irrational himself. And in my experience, most irrational people don't know they're being irrational; I certainly didn't before I started reading this blog.
Yvain, in the UK we have good evidence that prisoners behave better with more nutritious food. Poor diet is leading to erratic behaviour. Unfortunately the Home Office never gets round to acting on this. So the prison inmate example serves to persuade us Brits that paternalism doesn't work.
Floccina, academic research won't support the claim that only 20% are irrational.
Yvian, many of the other approaches I listed also rely on less personally involved parties.
Yvain,
I could see how bureaucrats would be able to ignore the individual's biases, but why would it follow from that that the bureaucrat would not introduce as much bias of his own? I agree their biases would be different, but I can't see them being less.
I don't think diets are a good example, because we can't show that "healthy and well-balanced" is necessarily what people want. The snake oil example seems better to me, because we can objectively show that snake oil is useless. Of course, in that situation the buyer isn't purchasing a cure at all, he's purchasing self-deception or a way to show his daughter that he cares.
I haven't been here long, but I don't think gambling prohibitions are a good example on Robin Hanson's blog ;) Biases against gambling have held off innovations in decision-making (via prediction markets) for who knows how many years (decades?).
I might be missing something, but I see a clear reason government can be less biased. A paternalistic government can be less biased than individuals because it's less personally involved with the situations it considers. Bureaucrats making future decisions for other people are less likely to be biased than a person making a decision for himself right now.
Consider diets. Most people choose their own diet. Some people, like prison inmates and students in school lunch programs, get their diets chosen by the government. Most people who choose their own diet will to one degree or another make decisions based on temporary desires ("I'm really in the mood for a bacon burger"). But the government bureaucrats who decide other people's diets have no personal stake in the matter, and usually end up designing something healthy and well-balanced.
Another example is gambling. Most countries have either banned or restricted it for paternalistic reasons. If you're in Vegas and really need a few hundred bucks quick, it's pretty hard to resist the temptation to play the slots. But if you're in Washington D.C. thinking about the costs and benefits, it's easy to decide that the latter outweigh the former.
Or to take a favorite example of Robin's, consider health care. If your daughter's dying of cancer, and someone tells you in a very sincere voice that snake oil is certain to save her life and can be yours for the low, low price of $999.99, you'll probably buy the snake oil even though all those ivory tower scientists in the Vast Allopathic Conspiracy say it doesn't work. Doctors tell me stories about this sort of thing all the time. It's much easier for a bureaucrat in D.C. to review the evidence, decide snake oil should be banned as quackery, and save you a thousand dollars.
This isn't to say that governments aren't prone to different sorts of errors, like those springing from corruption, but they don't need to suffer exactly the same biases that their individual citizens do.
Thomas Jefferson has a fairly well-known quote expressing the same sentiment:
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the forms of kings to govern him? Let history answer this question."
I haven't been reading this blog for long, but I wonder: could we come up with some metric for irrationality? If so, could we apply it to people in their roles as voters, politicians, consumers and entrepreneurs? I would bet a good amount of money the former two roles would be far less rational than the later two, since the costs of being irrational are much lower for them. A lot of rich people are very irrational when it comes to the 'finer' things in life such as wine and art because they can afford to be. Event still, I'd bet political irrationality is more wide-spread.
Couldn't some paternalists, particularly the democratic paternalists say that 80% of the people are responsible enough to take care of themselves and to elect competent politicians to care for the irrational 20%? Would they not say the most of the irrational are poor, poor in such a rich time and place due to being irrational?
This reminds me of the following exchange from the first episode of Invader Zim:
<quote>Zim: You can't have an invasion without me! I was in Operation Impending Doom 1! Don't you remember?Tallest Purple: Oh yes. We remember…(flashback)Zim: (in giant robot destroying a city) AH HA HA HA HA HA HA!Pilot: But sir, we're still on our own planet!Zim: Silence! Twist those knobs! Twist those knobs! You! Pull some levers! Pull some levers!(end of flashback)Zim: I put the fires out.Tallest Red: You made them worse!Zim: Worse… or better?</quote>
Government regulation is a political market, wherein the ultimate currency is based on one person one vote. Is there a better decision market?
Actually, whether democratic politics is an "efficient decision market" in some sense is a hotly debated question in political science and public choice theory. One reference is Caplan, B. "Rational Irrationality and the Microfoundations of Political Failure" Published in Public Choice 107(3/4), June 2001, pp.311-331. See also his work "The Myth of the Rational Voter" which discusses this issue in depth.
Robin, agreed.
9:46am - Now if you're talking about increasing the efficiency of our political market, that is welcome for serious discussion.josh, I agree that OPOV is a compromise to increase the probability of adoption of the system. Practical constraints (# of seconds until saber-tooth tiger catches up to you, 1 vote guarantee per person to win over the population to accept democracy or democratic republic, trade reporting requirements and other regulatory costs for smooth market operations) compromise perfect ideals. Yet popular voluntary adoption is pretty much a requirement unless you force compliance of whatever system upon those who reject the alternative systems.
Can we improve the OPOV to explicitly include intensity of preference (though special interest groups seem to approximate that for now) and rationality of choices (though overcomingbias and other discourse forums do encourage this)? Sure, let's talk about those parts, not throw out OPOV because it's not the absolute authority of rational decision making.
Peaty, you've written 3 out of 8 of the comments so far and I still have no idea what you are talking about. Time to quit I think.
One person one vote is a flaw, not a benefit of democracy as a predictor of good policy. There is no way to differentiate intensity of preferences, let alone the fact that people aren't necessarily voting based on predictions of good utilitarian outcomes.
Who am I to dispute your judgment that I "have not actually presented a good argument?" I merely request that you file the below under 'argument' instead of 'sloganeering.'
9:46am - [unlike the one-person-one-vote political market of today], decision markets ignores this one person one vote reality--a flaw that prevents adoption of the system by those who perceive/realize they are the market losers.
The implication is that status quo has an advantage in voluntary adoption of the system, whereas competing alternatives (that I'm aware of) have tragic flaws of adverse selection (the losers will reject adoption).
I would suggest that a sloganeering does not necessarily invalidate the meaning.
Well, yes, of course you are right: merely because you have not actually presented a good argument but merely a slogan, does not mean that there isn't a good argument to be made, possibly as an expansion of your slogan. That being the case, you have not actually presented a good argument but merely a slogan.