Ilya’s excellent response to the issues I raised in my initial post deserves a thorough reply. I’ll spend some time in the weeds before pulling back and examining some more “big picture” issues that I think are at the heart of our discussion. In particular, I think we need to explore the question of just when voter ignorance becomes problematic enough that it would justify the restriction of the public’s ability to legislate certain tasks.
Before that, though, it is worth spending some time on the question of how ignorant the public is, and how much it matters. Ilya lays out a number of concrete examples of voter ignorance. I don’t find them as bothersome as he does.
For example, in the 2010 elections, Ilya points out that 67 percent of voters didn’t understand that the economy had grown rather than shrunk in the previous year. But again, I have to ask, how much does this matter? I would say very little, if at all. What voters were likely expressing was the same sentiment conveyed in the Allstate commercial from 2008 (before the collapse), where Dennis Haysbert, the actor who played the president on 24, comments “if this isn’t a recession, it sure feels like one.”
Even though the economy wasn’t shrinking, the fact that wages were stagnant, overall unemployment was high, and home prices were depressed probably felt functionally like a shrinking economy to most people. In other words, even if voters didn’t have the economic language to specify just how bad or not-bad the economy was, they understood that the economy was fairly lousy, a sentiment hardly anyone would have disagreed with.
One could argue that a voter needs to know the rate of GDP growth to get the correct policy prescription; the degree of stimulus that is appropriate is directly related to GDP. And indeed, Ilya points out that Americans didn’t even know much about the composition of the stimulus, notwithstanding their professed revulsion toward it.
But implicit in the idea that Americans need this sort of knowledge is the assumption that there is a “right” answer for Americans to reach. As I noted in my first piece, I think that is often a flawed assumption. Even in this instance, we see evidence of disagreement among economists. The University of Chicago School of Business regularly gathers together a number of top-notch economists from across the political spectrum and asks them to answer questions and then assign a degree of certainty to their answer on a scale from one to ten.
In Feb. 2012, they asked their economists to agree or disagree that “[t]aking into account all of the [stimulus]’s economic consequences … the benefits of the stimulus will end up exceeding its costs.” Here, only 12 percent would strongly agree, 39 percent disagreed or had no opinion, and even some rather high profile supporters of the stimulus expressed uncertainty; Austan Goolsbee agreed, but was only a “five” when it came to certainty. How could Americans have gotten this “wrong,” if we’re not really certain what the right answer was?
Ilya also points out that a plurality of voters didn’t realize that the 2008 bank bailout had begun under President Bush rather than President Obama. This is more disconcerting at first, but we again ask ourselves, does it matter? President Obama supported TARP, voted for it, and asked President Bush to authorize the second round of it. If Obama had been a staunch TARP opponent and Americans had nevertheless believed that he had signed the bill, it would be one thing. Instead, I’d say they got the basics right. (As for Obamacare, I’m still not sure exactly what the law does myself, so I’ll give the American people a pass there).
Ilya and I agree that the voters properly punished Republicans in the wake of the Great Depression, but there’s an important issue lurking beneath the scene here: Many of the disastrous policies promoted by the Hoover Administration, including higher tariffs, higher taxes, attempting to balance the budget, urging the Federal Reserve Board not to lower interest rates, and above all else, staying on the gold standard, were considered to be the correct response to a downturn, based on experience from the depressions of 1893 and 1920–21.
This is important. If we had limited government’s ability to act based on what was considered sound policy circa 1925, we might have prevented FDR from doing things that hurt the economy, but we also might have kept him from doing a lot of things to help the economy as well, especially taking us off the gold standard and supporting the Reciprocal Tariff Act.
Which brings me to my “big picture” point: Ilya and I agree that American democracy is one of the best in the world. He seeks to make it better by reining in public choices. But—and this is tough to measure, but it’s important to try—just how much better would we make it? This is complicated by the point above: There isn’t really unanimity among experts about pretty basic policy questions, such as the long-term efficacy of stimulus spending. We’re also doing a lot of things that experts do agree on, like promoting free trade. So how confident are we that we’d “get it right” and create substantial improvements?
Of course, if this were the only consideration, even “marginally better” would be a proper and final answer. But when we restrict the public’s ability to legislate or demand certain policies, we impinge upon their liberty. This is a very, very serious thing. It’s also something we do quite regularly; this is what the Bill of Rights is about, but there’s also a reason we made it tough for the Bill of Rights to come into existence. We demand a high degree of certainty that a policy is overwhelmingly harmful before taking it off the policy table entirely.
Ilya is purposely vague about what restrictions he’d support, and I appreciate that this isn’t a book about political theory. But that vagueness ultimately makes it difficult to evaluate the solution. If he has “trimming around the edges” in mind, and if he is confident that would result in huge increases in utility, then his work is quite easy to sign off on. But major restrictions on our ability to legislate, especially absent concomitant increases in overall utility, are tougher to swallow.
I’m especially skeptical because, as Ilya notes, for much of our history, the United States was limited and decentralized; we also had a more elite electorate for much of our antebellum period.
Yet while our modern electorate gave us Richard Nixon, Jimmy Carter, and George W. Bush, it also gave us Ronald Reagan, Dwight Eisenhower and FDR. Yes the ancien régime gave us Thomas Jefferson and Honest Abe, but it also gave us James Buchanan and Franklin Pierce. We have made tremendous strides toward freeing oppressed peoples during almost all phases of American political development; we’ve endured horrible financial meltdowns during almost all phases of American political development; and, perhaps most importantly, we’ve tended toward mind-boggling economic growth during all of these phases.
I honestly do share Ilya’s frustration with voter ignorance. I also believe that an informed populace would probably produce (net) results that were better overall for the country, and that achieving that level of education is probably a pipe dream. With that said, I’m just not persuaded that the net results would be enough to justify the solution Ilya prescribes.
 As an aside, Ilya mentions tariffs as an issue where there is near unanimity among economists. But on the actual question around which our current trade debates tend to center – the adoption of labor and environmental standards as a prerequisite for liberalizing trade – there is substantial disagreement.