David Wright: 0:00

My guest today is Bryan Caplan, professor of economics at George Mason University and New York Times bestselling author of several books. Today we're focusing on his book The Myth of the rational voter. And this is Bryan second appearance on the not unreasonable podcast. Bryan, welcome,

Bryan Caplan: 0:13

Grea to be here David.

David Wright: 0:15

First question, I did interview with Mary Hirschfeld, on her book, Aquinas in the market. In that book, she like you critiques the rational choice theory and rational choice theory being that the theory is saying in the aggregate people make rational consumption decisions. And interestingly, this sort of gets used as a normative theory in the sense that it's a source of truth about what consumption decisions are right? Or at least this is often how it is used. Or this is something though, that I take both you and Mary to pretty strongly disagree with, but for very different reasons. Mary, who is also a theologian really rejects this because she says people should prefer less economic growth in favor of non economic pursuits. And you seem to reject the rational choice theory for the opposite reason that we should prefer more of it. Am I right?

Bryan Caplan: 0:58

I would not say that you should maximize economic growth, because that would require giving up weekends, for example. Right. So it would require sleeping less would require having less time for consumption? I will say that when you're thinking about desirable public policies than the standard of what policies are best for growth is a reasonable one. If you took it too, literally, then it could lead you into a crazy path. But so there's no, no, there's, there's no free market country or you know, even religion, levies like there's no non totalitarian country where anyone has gone into the crazy land of destroying the quality of life in order to get higher growth. So you know, you might say the Soviet Union did that for a while, where they basically just made life a living hell on the theory, this is going to increase the speed of economic development. But again, I'd save that for virtually any normal country, designing policy, with the with an eye towards mass and maximizing human growth is a very reasonable approach.

David Wright: 1:56

I think that you use a pretty strong term, which is one of the things that that I was kind of intrigued by through the book, which is calling it irrational, to to not have these preferences for at least at the current margin, more, more economic growth is kind of one way of reading it. But maybe you could sort of defend your use of that very strong word irrationality here.

Bryan Caplan: 2:18

Right. So that's actually not what I say in the book. So economists have a longstanding distinction between beliefs and preferences. And really, what I focus on in the book is beliefs. So a preference it's philosophically there's a lot more work in saying a preference is right or wrong. So he's like, why he also like chocolate ice cream, that's better than vanilla ice cream or something like that. On the other hand, for beliefs, the belief that this ice cream is chocolate, that leaf can be argued it can it can be said to be rational or irrational. So actually, in the book, what I really focus on is the rationality beliefs. And that's why I've put a lot putting a lot of evidence on things that are popularly believed and yet, are pretty clearly just not true. And that's actually where this question of aggregate errors is important. So again, there's a long standing view in economics that of course, people make mistakes. But still, if they're rational, there just won't be a pattern to the mistakes. And what I say is, it's actually worse than that not only do people make big mistakes about important public policy issues, just in terms of the facts and how the world works. But on top of that, there's also the problem that there's a pattern to the errors, for example, the public is not that they simply have unpredictable views about trade, but rather they predictably think that international trade is bad. Right? And in a way that if you really understand the subject, I would just say just doesn't make a whole lot of sense.

David Wright: 3:43

Okay, so So the idea here is that there's a link, there's not just about believing something is is a good thing, but it's about believing something specific about that. So you can have this preference and saying, I don't like international trade, for some reason. And if I'm understanding you, right, you're saying that's okay. But if you don't like international trade, because you think it lowers economic growth that is wrong in a different category?

Bryan Caplan: 4:07

I say no, I say that's real. First of all, that's wrong. And then secondly, I argue that generally that belief isn't just wrong, but it's actually irrational. And I've got a number of different ways of thinking about that. One of them is just the pattern, just that it's so it's so widely believed. Another one is that the reason why people that don't study the subject are so opposed to international trade doesn't seem like it's actually based upon a understanding of the textbook model, which then says, well, it takes a model misses something, rather just based upon impulsively deciding that you think that you've got it all figured out, and then saying, I don't need to read the textbook, why would I? So and by the way, in that book, I will say that I was often thinking about my dad when I was thinking of the canonical irrational person. My dad's a very smart guy, very well educated patient, let's go engineering. It. He's never cracked an economics textbook. And he has very strong, vociferous opinions. The fact that I'm a professor of the subject Doesn't matter in the slightest to him, he just gets angry. If you say, well, maybe you should go and calm down and least be able to explain the arguments before you disagree with. I was like, why would you do that?

David Wright: 5:12

That's pretty funny. And you know, it touches on a really important idea, I think, which is, and you mentioned it in the book yourself. Are you saying before I studied economics? I didn't know this stuff either. Right? And, and I think that there's this idea of these ideas, these sorts of concepts being kind of not, not like directly intuitive, maybe just for some people. But there's an there's an era before a lot of these economic truths were discovered. And there's an era after them. And so like, I think of the rationality as somehow being embedded in the human experience, so what do you think about that?

Bryan Caplan: 5:43

Yeah. So we there's a lot of stories you tell about why the public inclines towards systematically false views. But I think that a big part of it is just deep set human emotions. For example, human beings naturally are inclined to blame foreigners for problems, even when this is clearly a silly thing to do. Right? And if you just think about emotionally, well, it's like, well, there's a problem. Well, who do I want to blame? Do I want to blame grandma's? No, do I want to blame puppies, no one want to do I want to blame foreigners. Ah, now that's one that really feels very pleasing. They're the kind of group where not only people not feel bad about blaming them, but they actually feel pleased, like setting up a group that I wasn't fond of to begin with is causing problems that are a danger to our society. Great.

David Wright: 6:34

I think to like the I read this year, as maybe you did to Joe Hendricks book, the weirdest people in the world. And he's a variety of of his work before that, which really brought this idea to bear on my mind of anti market bias and anti foreign bias bring to the fore that you listen to book and will pop out yours as well. But those being actually really similar in the sense that they're, I think, what he calls like a, you know, external pro sociality or something, trusting people you don't know. And both in both of those instances, being anti market at any foreign, you kind of have to trust the institutions and the systems around you to kind of have it work out even though you don't know who this person is. So it feels to me like it's pretty fundamental piece of who we are.

Bryan Caplan: 7:22

So there's probably somebody that meaning sort of my problem with that book is that your appreciation of the value of trade is not it's not Western, in any reasonable sense. So, you know, China had a great trading, trading trading empire for millennia. So, I mean, so again, it's to me there's, there's something odd about the western label, because I think they'll be a lot of these ideas are actually probably not not just somewhat present other societies, but are very prominent and some other very important societies. But yeah, the general idea of trading with people at arm's length based upon mutual self interest, is much less emotionally appealing the one on long trading with people he personally know that you can, that you can just rely upon their good intentions.

David Wright: 8:07

And let's talk on the other two biases to so you have a so anti market anti foreign make work and pessimistic bias. If you're to rank them, it may be going to play that game, what would you say are kind of the most to least

Bryan Caplan: 8:21

out of the four? So I think probably the, the, the the anti foreign bias is the one that currently does the most damage, just because the regular the, you know, the International labor markets. I mean, I have another book on how much harm immigration restrictions do to the global economy, basically, by trapping labor in countries where some productive aside say that in the current time, anti foreign bias is the most important one, followed by anti market bias, followed by naked bias. And then pessimistic bias is the one where it's least obvious exactly what it does if it were to cause harm in the world. So we can speculate, but even though seems why Yeah, we go anti foreign anti market and then finally, make work with pessimistic last. I mean, I guess I would say that in earlier periods than that anti market was more important, especially as long as the Soviet bloc was around. I'd say that anti market bias was doing more harm overall. But since the dissolution of that, I'd say that anti foreign bias is the one that's really the continuing, enormous drag on human flourishing.

David Wright: 9:28

Where did you get the idea for these four biases where it was the original source in the literature that I brought them up for you?

Bryan Caplan: 9:35

Right, no. So I mean, I had read a lot of earlier economists. So Frederick postion, is probably the most famous one, you'll hear a French economist read in the mid 19th century. And he just wrote about the contrast between the way that economists see the world in the way that normalcy that what normal people see the world and said, there's the general rule is that you like the other views, the public, they're not just wrong, but they're really they're just deeply confused. just hard to hard to really make sense that when you state them despite the right popularity. So, Austin was a big inspiration, there's a number of other economists who have said similar things. Then finally, I spent a lot of time just looking at the data and saying, so do the stories that past economists have told about where the public goes wrong, where laymen go wrong? Do they actually fit with the data that we have? And I see Yeah, overall, it does seem to look pretty good.

David Wright: 10:23

There's an ther interesting point you make arly in the book, which really c ught my eye, and actually caus d me to buy and read another ook, which was Eric offers ork, where he talked about mass movements being interchange ble. Right. And I hadn't come a ross that before. That's p etty interesting. And ther was something like, deeply appe ling to me about that idea. Beca se I see, you tend to see mass movements arise in tande, in some ways, if nothing lse, right, you have, you kn w, I think of certainly in the r cent political history, we have pretty radical right and left wing movements arisin and people who, you know, in l ke a kind of anthropological s nse, maybe are like, r ally interchangeable to people, like the people are, you now, they're they're a littl bit different. But, you now, really, they're very si ilar kinds of people. And but for, you know, whatever accide t of their own personal upbrin ing, they could have been o the other side of that. Right And you know, that That, to e, I think, is a pretty intere ting piece of support for kind o all this being a universal thin, as opposed to a political lef and right thing. Do you think bout left? We don't talk about left and right wing politics i the book very much. But do yo see that interacting with y u at all? Or is it really just b gger than all

Bryan Caplan: 11:28

So I mean, I do talk about a little bit so. But I'd say looking at the data is the left, as you'd expect is more anti market, the right is more anti foreign. And then you can go into more details. But those are the two main patterns that I discuss. And I think early so I think I've got a co author Steve Miller, who goes over some other data and gets get similar similar results on that. Yeah, so I mean, that like, you know, the main thing I was getting out of air conference, the true believer is just how politics is the religion. You know, it's a truism now, but Eric Hoffer was one of the earliest people to say that the role that relationship preserving earlier societies gets played by politics today, you know, he's writing and I think, the late 40s, early 50s. But, you know, seems like that's even stronger than it used to be, you know, very striking that even among conservatives, religion is in fairly steep decline in the United States. But this doesn't mean that the view goes away, it means that you change the view to rally around political views rather than religious ones. But so you know, especially the idea that there's a certain mindset that people have towards religious and political views, where it's, there's this desire for great fervor and passion and this premature certainty, where people that really know next to nothing about even their own view, much less than competing views will still act like they got all the answers. So that was a big inspiration for this book. And yet, of course, you know, Larson noting how angry many people get at really ideas that are quite common sensical, just things like the when you move an immigrant from Haiti to Florida, the productivity of the world goes up and by a lot, and people will get upset about that and say, look like what part of that could really be wrong. You're like a man, you know, he'll if it's a Mexican farmer, and you move from Mexico to the US, and you say, look, we can measure this guy produces five times as much food here. So he's contributing more to the world by being here in the back at home. That's to it seems odd that someone would reject it. And yet, Cemil most people would not only say that they disagree, but that they're angry about it.

David Wright: 13:37

Politics, to me is like, is a bigger thing than just what politicians do. Right? So then people will use this term of organizational politics as well. And I've just kind of always sort of wondered about the link between them, because people talk about them using the same term, but they feel like they probably mean different things. So I'm wondering if you could maybe talk a bit about what you mean by politics, maybe in conjunction with religion, or how you see as a more generally,

Bryan Caplan: 13:59

yeah. Well, let's see. That's a good question. You know, I guess that's you fleshing out the analogy. You can say, well, silicium political ideology is very similar to theology. And so there's this body of doctrine that people repeat that gives meaning to the lives and that they're angry, if you deny the truth of even though they hadn't really thought about it. And often, it's even hard to explain how it could possibly be right. There's also the social element, right? So people attend church, it's their club, it gives them their network of friends and allies. And the same thing goes with politics where people today use their political party as a filter for who's worthy to be a friend. They might actually lose friends based upon a political disagreement. So you've got that. And then obviously, there's also this hierarchy where within a church you have the as the spokesman for the view and they're also the natural leaders of the group. And then in politics, it's professional politicians, pundits talking about That doesn't serve the same role as clergy. So, so we I'd say that all that's going on.

David Wright: 15:08

You know, I think if like, politics, I have more more experience with organizational politics myself. And I think of it as kind of like this collective decision making process. And I don't know if you're familiar with the work of Mary Douglas ever come across that name. So she's an anthropologist. She's an anthropologist of, you know, she passed away, I think, you know, around 2001, or something. But she, she worked on these ideas of how risk issue risk interacts with culture. And so she had a book called risk and purity, I think, no purity in danger, where there's an idea of pollution. And that is people develop these norms for, for getting for enforcing the rules of their society, by inventing stories about, about why things go wrong. And so you know, I think like in primitive societies, you can only understand so much of reason why things happen, but everything gets interpreted politically. So natural disasters, it's like, oh, you know, this person violated some incest taboo or whatever, right? So using to enforce the norms of society, and to her politics are really a mechanism for handling uncertainty, or a maximum for interpreting uncertainty and dealing with it. And so like a political vision gets, gets gets, get some gives given voice to, right, so a politician, or political entrepreneurs, or term people use will say, here's a vision of the future. And here's how we're going to get there. And you don't have to worry about any of the details, because I've got it. Right. And to me that like, that interacts with your work, I think, in maybe sometimes you make the point, your book, you know, where some politicians can really emphasize these biases, right? Then pander to the biases of society, and some can actually chart a different path.

Bryan Caplan: 16:49

But I would say almost almost all successful ones anyway.

David Wright: 16:53

Well, I mean, but there's this interesting, you know, at the same time, like we do have progress, right. So like, there surely are good politicians in the sense that you would agree with in the spirit of your book, who actually enable something in advancement, because, you know, we're clearly our society is better than it was some, you know, centuries ago. So there has been progress from time to time. So there's such a thing as a good politician, right.

Bryan Caplan: 17:15

Saying it like less bad rather than good. You know, like, it is so hard for someone to gain power without pandering to certainties. I mean, if you again, like to me like people thinking like, Is there some kind of political agenda here? And I say, Look, just listen to any politician from a society other than your own, and just see how their whole way of thinking about things is corrupt. It's one where they're trying to go and tell a story that sounds good. They're trying to make friends, again, like for a politician to say, Well, look, here's what people want to believe. But that's not true. Here's the actual ugly truth. politicians don't want to say that they want things to work out. So that the like, again, like it's it's theological, right? I mean, I do like this analogy between politics and doing human sacrifices to make the weather work. We think that's a lot, a lot of what's actually going on is, is things that are just irrelevant or harmful being done in order to cause things that if good would have happened anyway, there's not a lot of effort to really test whether or not the claims are true. There's anger, even at that questioning, and your demonization, that those who do ask questions. So anything like your main thing, remember is that as long as you've got your technological innovation, business innovation, there could be a lot of bad things that government is doing to mess it up. And still, you come out ahead. So, you know, you might say, well, let's just give politicians credit for not totally strangling progress. All right, I'll give them one share for that, you know, congratulations, you didn't totally sweat it, strangle project progress. I really appreciate your sacrifice there. Same time, you'll detect the sarcasm that I have. Because, say, look, you could have done a lot better. It's just that it wasn't conducive to your pursuit of power, who's

David Wright: 18:57

your favorite politician of all time? And the spirit of the book?

Bryan Caplan: 19:02

My favorite US president is probably Grover Cleveland. Okay. So I think that he just appeared in the news recently for irrelevant reasons. So it's just gotten my my sympathy for Grover Cleveland has very little to do with this. Amina, one of the key was just noted for not only his promotion of what I think of as good economic policies, but he also was just willing to go and say things that were very unpopular things like, Look, we could go and use government to go and solve all these problems, but it's just a very bad idea. And, you know, and, and he was notable, so like, when you say, like, I'll go and make a charitable donation, but I'm not going to go and use taxpayer money for this problem. So to appreciate that, but still, like in terms of good things. So I mean, like the problem honestly, is that politicians that get a lot of attention are usually ones that do new things. And I would say that usually that's For the worst in terms of politicians that actually ultimately accomplished a lot of good, I want to say Gorbachev but he not because I think he actually was a really good guy, but he just botched his own effort to reform communism while retaining power. So we like he, like things were co a great things occurred because of him. But again, I would not want to actually give him the credit in any wholehearted sense. You know, again, like one cheer for Gorbachev, or anything like similarly actually Deng Xiaoping. Like he actually took one of the most grotesque, horrifying economic systems in human history and turn it into a tolerable one. At the same time, you know, he was complicit in horrible crimes against humanity during earlier in his career, so, but in terms of like, people done the most good, you know, Deng Xiaoping, who basically spearheaded the re privatization of agriculture in China, and the general opening up and free market reforms, will definitely just do to accomplish a lot, but still really a bad guy. That's, I mean, again, I wish I had a better answer. If I thought about it for a long time, I probably could come up with one. I like you, when I think about it more, I tend to think like, you know, Blessed are the peacemakers, and then like which leaders did the most to swallow their pride to actually durably settle a international illegal international conflict. So, again, that's one where you're like, the the ones that start conflicts are much more famous than the ones that settle them. So

David Wright: 21:38

there's maybe there's maybe like a model here, which is, you know, if the book is if the book is right, right, I'll say that, then maybe you need to look for the unpopular politicians. And that you know, that list, maybe that'd be better list for you.

Bryan Caplan: 21:51

Although you like you can't be so unpopular. They don't actually have power, right? They don't do it doing they're either, right, yeah. Or, you know, like, alternately, there's the ones where the policies are unpopular, but they have such a great personality that they win people over to them anyway. So again, like I'm not far from a huge ronald reagan fan, but he did do a number of things that I think were very good policy reforms. And I think in terms of the actual policies that he adopted, that they probably were not that popular, but he just had such a winsome personality, that he was able to get things done, that other people or someone else with the same views and maybe was smarter, more articulate wouldn't have been able to accomplish.

David Wright: 22:30

So what is the theory of progress, then? That's implied by this book, because it's, you know, pretty pessimistic. So, you know, politicians are bumbling around and messing it up all the time. And they're in charge, right to pretty big assumptions. But let's, you know, you can dispute those, like, then how do we how do we improve in spite of it?

Bryan Caplan: 22:48

So like, a very big part of it is in the modern world, technological and managerial progress have so much momentum behind them, that there can be a lot of headwinds caused by politics, and yet things keep improving. So, you know, you know, think about this. So like, for all the major tech improvements, if there if each of them, right could old, we're only allowed if there had been a votes by both houses of Congress, and that was signed by the president, how much progress would have occurred? Right? Right, very little. But we unfortunately have a system where the the, the status quo is you can do things, and then it takes effort to solve them. And so I think a lot of progress is caused by politicians, this is you being too off the ball to actually prevent improvement from happening, right. And you can really see what this would be like, generally by looking at the how botched the vaccine approval and distribution process has been. So if everything was regulated as vaccines, then everything would go about as well as that, although even there, you might say, well, at least we got a vaccine, you say, Yeah, well, that's, again, the momentum of technology that is so strong, that is able to overcome a really disastrous system of regulation. So yes, just to let you know what I have in mind here. There's a very simple economic reform that could have gotten us these vaccines six to eight months earlier. And that reform is allowing voluntary paid human experimentation. Right. So the way that the actual vaccines were tested was you that like, they got a sample people have got it has got a placebo, and then just waited around six months to see who got sick, and then measure the difference. That is not a good way to rapidly find out whether a vaccine works, the good way to do it, is to give them a vaccine, and then a week later, inject them with disease. And then, you know, within a month, how well the vaccine works, instead of having to wait all the time. Right. And if that occurred, then these vaccines could have been improved much earlier. But so like, Why wasn't this done? And I think that if you think about a little bit, you know why it wasn't done, which is that no politician wants to stick their necks out and take responsibility for doing something that sounds so ghoulish and bad and Yosef manga like and everything else. And even you say, look, it's nothing like it's the opposite of manga. These are this is voluntary. human experimentation is not involuntary is the difference between consensual sex and rape. But that is not. So those are not words that a politician wants to actually say. Right? And you're going to feel like this is all backed by the bioethical community with this absurd view that you can't give true informed consent. If the disease is new, like, how about you tell them, Hey, this is a new disease. So we don't know those could be some unknown things that could be really bad for you, you still want to do it, your 10,000 bucks. Right? So that is a really simple economic mechanism for speeding approval process through, right. And then of course, right now we have a terrible distribution system managed by governments instead of just allowing the market to work and was like, you know, sell people vaccine, sell people the vaccine, right, so that it doesn't go to waste. And we have then their strong incentives to get it into as many arms as possible as quickly as possible. So yeah, I mean, actually, if I read it in the section on anti market bias today, I probably actually just do a bunch of COVID examples, because we've have this bizarre aversion to letting people volunteer to be injected by the disease, not just for the money, but for the good of mankind. Right? Yeah. Like you basically, you're saying yes, so you're not allowed to be here out? Too bad. Right. And, you know, hundreds of 1000s of lives lost because of this delay, but people are very stubborn about it. They don't want to pay people, right. And then similarly, people get so agitated about the idea of a rich guy getting the vaccine first that they'd rather that one, the vaccine just get wasted. And so

David Wright: 26:36

yeah, people die. It feels to me.

Bryan Caplan: 26:39

Anyway, the The reason I bring this example up is just to see how you can have terrible government policy, but progress still happens. Because the technology is so for SEO, there's so much momentum to technology that happens despite the bad policy. So that's a lot of Anyhow, I have another story that part of what voters do is they blame politicians for having unpopular policies. Another thing they do, though, is blame them for disaster. And this means the politicians at least have to think about well, should I do something unpopular if the consequences will be good enough? I'm not saying this generally leads to good policies happening, but at least it is a way that we that so political incentives, somewhat dilute the incentives to just to deliver bad policy all the time.

David Wright: 27:22

Yeah, there's a paper somewhere. So you there's a concept that you touch on in the book called retrospective voting pocket book voting, right? We talk about that, but but the idea of kind of recent events really, enormously impacting people's their vote, and there's like, I was looking at the paper, I forgot the name of the author who can tell me, but I also wrote a paper about how shark attacks really hurt the prospects of some president or something that was about pocketbook voting.

Bryan Caplan: 27:51

Right? So pocketbook voting or more generally, retrospective voting is when voters instead of having theories about what policies are good or bad, they just look at what's been happening since the last politician got in power, and peace and prosperity. Alright, good. Relax him winning a war and poverty bad throw the bomb out. Right? This is a voting strategy, which if adopted would be a tremendous improvement to over the status quo. Because it's really easy to do. It's much it's much less of a philosophical or ideological question just to look at the world and say, what's going on? Right now, you might say, well, it's perfect is maybe a politician got unlucky. So yes, it isn't perfect. But it's a lot less imperfect than the current one where voters figure out for themselves what policies are good based upon what nothing based upon their gut based upon what sounds good based upon poetry. Right. So far better to have a an imperfect measure of political performance that actually does track the good performance rather than what we currently do, which is quite bad. Now, again, like I said, there's people do a bit of this. Basically, I would say that the simplest strategy that voters could adopt to get much better government would just be to do full retrospective voting and be agnostic about policy and to say, look, if they if the country is at peace and getting written and getting rich, quick, under your rule, then I'm going to reelect you and I otherwise I'm not gonna listen to a word you say.

David Wright: 29:18

So it sounds to me like you do not believe retrospective voting is real.

Bryan Caplan: 29:22

So it happens to a modest except it's just that it's only a modest part of what's going on. And on top of it, there's also another problem, which is that in the real world, people's ideology actually strongly affects their view about what's happening. So if your party's in charge, you just tend to think the economy's doing better than then people that aren't committed to a party. Right? So and again, pretty quickly, you can say like the objectives or objective performance measures the same but when your party's in charge, you say things are better. Hmm.

David Wright: 29:57

I feel like the you know, Kind of like a margin, right? So you think about if the, you know, of each party, they got the vote that's in the bag. Right. So the the marginal voter is probably maybe more sensitive in retrospective sense. Would you agree with that, and so that, you know, the force of rich, because one of the questions I had for you was, you know, if you had, you know, in the in the race or the fight between, you know, biased voting and retrospective voting, which one's more important to actual election outcomes? It's kind of what I'm getting at.

Bryan Caplan: 30:25

So, yeah, I would say that the retrospective voting is less important, but it does matter at the margin. So meaning it now, the idea that marginal voters are more retrospective than regular voters. That sounds true, but I don't know of any evidence that actually confirms that. And here's the thing is that marginal voters are also super uninformed. And very, and also, you know, they'll also just be very, very emotional. So it's just not clear that they actually are better. So again, like you, in other words, like you want to sway swing voters, you might actually be better off going and talking about flag burning.

David Wright: 31:03

So the another kind of thing that that was really came to mind was talking about pocket voting in a retrospective voting is how it interacts with the self interested voter hypothesis, because you can read about that in a second about definition and some of the critiques of it, or the devastating critiques of it. But it feels to me like a pocket book vote is actually kind of a self interested vote. Making that right, you think

Bryan Caplan: 31:27

so I actually know. Well, yeah, like one of the main ways people have tested seven years of voting is to see if we race, the economic performance side of the country versus your own economic performance, which one is more predictive. And a standard result is that actually, the economic performance of the country is more is quite a bit more predictive of people's votes and their own performance. So basically, if unemployment is low, but you're out of a job, you still tend to reelect the incumbent. Fine. And on the other hand, if unemployment is high, but you're but you're doing really well, you'll still tend to vote against the incumbent. So there's no NES and not only is there no necessary connection between self interested voting, retrospective voting, but actually, one of the main tests is hellbenders voting is to see if we do a race of these two stories, which one works, and it seems like the social wellbeing story is one that wins.

David Wright: 32:16

That's amazing. And as you as you, you know, make a big point of in the book, rightly so. Is that that runs counter to a lot of what we think, or at least we think other people from on basis. Oh,

Bryan Caplan: 32:27

yeah, I mean, again, I would say would probably be better if everyone just voted selfishly based upon their first 10 experience, because it's a lot harder to be wrong about firsthand experience than about the overall level. Your ideology determines what you think really heavily affects how you think the country's doing. But on the other hand, how you think you're doing that's very heavily based upon how you actually are doing,

David Wright: 32:47

and you make the point to that we we actually assume other people vote in a self interested way, even though we ourselves do not right, right?

Bryan Caplan: 32:55

Yeah. So this is one that is very striking to me. So, you know, if you ask people, so why do your political opponents both the way that they do one of the most standard area are stories, as well as they're just selfish, they don't care about society, all they care about is themselves. But here's what's really striking to me, I've sometimes asked people, alright, but why are the people on your side? Why do they back your side, you might think people would be bending over backwards to say that their political allies are unselfish. But in my experience, they don't. So like if you go and ask a essay, like an academic, your left wing Democrat, why is that you think that say? You seem like you're like a white white? Why do you think that Hispanics more democratic? Now they rarely do they say, oh, because Hispanics care more about justice than white people. And so they say, well, because democrats do more stuff for them. Right? And now you might say, Well, people are, yo yo said, Well, why are you a democrat? So they'll say, Oh, well, because I'm idealistic. I care about society. Right now, you might think this, the real story here is that everybody's selfish and that people are overriding themselves. But I said, when you look at the data, really the stories, it seems like in a sense, people are rightly rating themselves and they are underrating. Everybody else, both not only their opponents, but also their allies.

David Wright: 34:13

I wonder if I could like, also see if I can get you to you to agree with me that retrospectives a little bit a little bit better than maybe you think or at least you're saying here because I sensed in the book that you were a little more positive about it, then that I'm hearing now. But let me kind of give you an example of something that really struck me, which maybe even wrote about but the so if you look at NAFTA, right, enacted in the I think the 80s, early 90s. Yeah, and I'm from Canada, it was Brian Mulroney and Canada. By the time I do remember it, and kind of amazing, amazing event, right one that you're you know, I think that the anti market and anti foreign bias would both work against, but it happens. So that's interesting episode in and of itself, and then you had this other event which happened a couple years ago. When President Trump repealed it and then basically re enacted it under a different, less memorable name. So maybe it was less prominent or something so that like, there's some serious, like, persistence there. And I'm wondering if it's just because the thing worked, that they and they knew it was gonna work, and it came out as expected. And so we can't really get rid of it, because that would be bad. Because then we would, you know, we would trigger a retrospective cascade here and, and hurt our How do you interpret NAFTA and the USMC a or whatever it's called now?

Bryan Caplan: 35:31

Yeah. So really, what I would say there was, like, now that it's existed for a long time, it would be devastating for especially a bunch of border states if it were repealed. So I think that you're not like so we could be voters would get angry, I get I think it's more about special interest getting angry. Right? Me, oh, special interest, of course, can inadvertently do good things. And I think this is such a case. So yeah, like you have a lot of business there. And they do have political influence. And so and so they would actually be very upset if NAFTA were genuinely repealed. So I think that is a big part of it. So in terms of, you know, how NAFTA happen in the first place, and you know, the book, I do talk about public opinion, or basically, the one time when support for NAFTA, exceeded opposition, was the first poll that was done after a passed. And then it very quickly became unpopular again. So as to what your what was going on there. And you might say that the improvement of the economy helped Clinton more than the resentment of a particular policy. Possibly, you know, just the main thing I would say is that there are though I think about all the NAFTA is that could have been that didn't happen. Right. And then I think you do get to get an idea about how much waste is really going going on. The other thing I would say is there has been some good research on the link between policy and public opinion. And one of the main results is that existing is worth about 20, politically percentage points of public support. So if something exists, and 40% of the public supports it, it's about as likely to last or to exist, as if it doesn't exist, and 60% of the public supports it. So that is something else where there's the system favors status quo. And there's a lot of familiar psychological stories about why that would be true. Yeah. So like, the idea that Trump would have passed NAFTA, if it hadn't existed? I think that's quite fanciful, that wouldn't have happened.

David Wright: 37:24

Yeah, yeah, that that's probably pretty easy to easier to agree with. To me, like, the thread that runs through a lot of this as uncertainty were like, you know, it's a burden hand, when you have something that exists, it's like, well change it just kind of scary. And, and I actually, I think, usually people, you have to invoke that idea in kind of a negative sense and say, Well, people don't like change. And that's like that, you know, therefore, they're, you know, stupid. But I mean, I don't really agree with that. Because like, it often, you know, obviously, there were certain changes, which I believe are positive, but for the most part, it's the devil you don't know, is the one that's gonna come, you know, we just moved into a new house here, right? In the old house. We had, we had like, bid ants in the house, right? And here, like, you know, I was like, Oh, thank God, no ants, right? And then turns out, actually, there's a mouse living in the basement. And it's like, well, you know, like, we didn't know that was gonna be the case. But, you know, when you make a change, like, a lot of things are gonna change, and they're always gonna be positive, and some of them are negative. So to me, it's like quite prudent, irrational. I don't know if that's quite the right kind of like Word to invoke for it. But it's prudent to be wary of change, because you just don't know what's going to happen. happen. Next.

Bryan Caplan: 38:26

totally reasonable point, actually, yes, it is prudent to be nervous about change. Right? And if we're not, when economists talk to the public about reforms, if that were the main objection, I would actually feel a lot better about people. Right? Because if someone says, well, like, I'm just nervous about change. That's where you say, all right, fine, let's do a test program. Let's do a pilot. Let's do it on a small scale. And keep an open mind and see what happens. The number of people that you can persuade with that idea is close to zero. So so that the, which I think really just tell you something about how crazy people are about politics, you like an argument that would actually make sense. It'd be reasonable, you know, saying, look, this sounds good. But like, the status quo seems okay to me, and like this could be turned out to be really bad. And that's one where it's actually one. It's an objection where you can say, Alright, fine, let's sit down and try to discuss your fears. And let's go and try to see like, well, you give me a chance here to go and try it on a small scale. Right? So that's why you would switch quite striking is just how few people you'll ever meet who will just have that view. So instead of the normal, normal reaction we talked about talking about change is not I don't want to do it all in one step or like we don't know enough. Let's go and try it on a small scale instead. Normally, people just bite your head off.

David Wright: 39:45

Yeah, yeah. You know, one, the one spot in the book where you kind of tangle with uncertainty, the idea of uncertainty in by training. I'm an actuary, right. And I work in the insurance industry. And so like to me, like, you know, I have a little bit of a drum. I'm kind of beating all the time. about, you know, risk being kind of underrated and it kind of made sense. But, you know, you make mention of the paper by Roderick and Fernandez who, who actually incorporate quite directly this idea of risk in in an explanation for why a lot of economic policies that are pretty well accepted in economic mainstream are not enacted by by politicians. You're kind of dismissive of it, but you didn't really dig into it in detail. And I'm wondering, you know, if you could, you know, talk a bit about what you find unappealing about that argument. Sure.

Bryan Caplan: 40:27

So it's a quite technical arguments, which is part of why I consider it so ridiculous, because it requires a level of intellectual subtlety on behalf of like, in the public, that just is, to my mind crazy. So, but, again, like, basically, what they want to show in that is how policies could be unpopular before they actually get adopted and yet could be Poppy and yet could be popular if they after they get adopted, without having anyone actually change the preferences or learn anything, you learn anything fundamental. So basically, they say, so imagine, imagine that there's a form, and 40% of the population knows that they will lose for sure from it. And then out of the remaining 60%. There are you so out of the remaining 60%. See, so

David Wright: 41:17

I think it was 40%, we're gonna win. And of the remaining 60%, I was like, a third of them was gonna win, or 1/3 probability. And so if you take like, you know, the expected value, but because you know,

Bryan Caplan: 41:29

yeah, guys, yes, that's right, yeah. So suppose there's a form 40% 40% of people will definitely gain, but 60% say, well, there's a two thirds chance that I lose 1/3 chance that I gain, and then you go and do this, then 60% will vote against the policy. But if you adopt the policy, then all 40% of the people that knew they would gain still support it, plus a third of the 60% will also net will now know that they gained from it. And so now 60% will support the continuation of it. So again, this is a cute little story. And it's a fun exercise for probabilistic reasoning. But again, I just say that's not anywhere close to how I like any policy I've ever heard of actually, that's just not the way not not not the way that that people talk about these policies, or the way the reason about them.

David Wright: 42:15

I was kind of all over the place as I was kind of thinking about that argument. Because, you know, I, I agree that certainly as presented, it's kind of like technical. And, and I agree with you, like, you know, probabilistic reasoning is, I mean, listen, I'm an actor. how critical Can I be of it? But I think that, you know, for the most part, people don't probably explicitly go through a process like that, right? I mean, certainly they don't. But if the idea here is that, you know, there's a range of outcomes, there's a confidence interval, and how this is going to impact me. And I don't like confidence intervals. So I don't want it. And that intuition I find appealing. They don't state that at all in their paper in that kind of way. But I do kind of get that right. If I don't

Bryan Caplan: 42:58

have confidence interval for how the status quo is affecting you, too. I suppose that will take us back to why aren't there more people who, when presented with a policy or form, just say, I don't want to try this on a big scale, let's try to a small scale and see what happens. That this is, you know, this is so unusual. For every normal person to say this, I mean, even if you go and prompt people, most people will not go along. But for the opposite of that a randomly selected voter will randomly say, well, we'll spontaneously anneal like without leading the witness, say, I don't want to try this on a big scale. But let's try it on a small scale. So we can learn whether it works, very unusual. Now, of course, doesn't mean by the way, this was actually one of the earliest arguments for federalism was to have a bunch of laboratories of democracy. So we can easily compare and this is reasonably reasonable that many people gave for why the federal government should have very little power, is because we want to be able to look to we'll just have a wide diversity policy, and we can learn from success and learn from failure. But again, like, you know, if you were to go and propose this and say, let's devolve things to the federal, for the federal level, the state level so we can learn more, again, hardly anyone is going to go along with that. So basically, if they're parties in power, and they say, look, we know what's going on, we don't need to learn learning bah. If they like to say you don't need to learn who world's really complicated. It's like, No, it's not. Oh, good all figured out. And this is just you. You're just trying to go into privacy of the fruits of victory by telling us we can't make the whole country do what we have figured out is great.

David Wright: 44:28

If I think too, though, if you like come back to Deng Xiaoping, right, so he didn't come up with the idea of market liberalisation. Right. He was quite explicitly copying many countries that were succeeding. And so I think the idea of mimicry is really important.

Bryan Caplan: 44:41

Yeah, anything although the only important thing to realize is that if that Chinese power struggle had gone a little bit differently, China could be still under a mouse, a mouse type regime even now. Right and login like you know the details of it. It was very touching, go for a while. You like really, if Mao had just before he had done He just ordered execution of a bunch of of Deng Xiaoping and a bunch of similar people, then Mao's wife could have taken over, I think she was quite a bit younger. She could have just continued the carnage for decades further.

David Wright: 45:12

Yeah, I mean that that taken Point taken, what I'm trying to get at is like the the idea of other countries being experiments for each other. Right. So in the United States, is achieving remarkable success in one or another, or, you know, other countries for that matter, again, Canada and come up with policies that we adopt here.

Bryan Caplan: 45:33

Right, yeah. So you know, they can and and once in a once in a long while they do. Although this is also something that I did a blog post on this. So everyone were to there are a whole lot of countries that copy the Soviet Union. Right? Despite it being one of the most disastrous economic models in human history, basically, you know, it's a good way to build a giant military while starving your population. Right? If that's your goal, then follow Stalin. But on the other hand, the number of countries that were the number of political movements that were influential on earth after World War Two, they said, let's try to make our country as much as possible, like the United States, it's hard to find any such movements. Right. So basically, it's like, either follow the Soviet model or follow some indigenous model, we need like, we don't want to, like we hear in Afghanistan, we shouldn't follow any external, external model, any foreign model we should do with the Afghan way. And it's like, well, you know, the Afghan way doesn't seem to have been very good so far, does it? So like, why would you want to continue with that model? But, you know, like, Julio, I get to be like, because of this anti foreign bias, and just this ideology of nationalism, it just burns people's pride. To go and emulate a successful country. It does happen occasionally. In a way, a lot of what it takes to emulate successful countries is to get a very rhetorically skillful leader, who will say, who basically will sugarcoat everything and say, No, no, we're not called the United States. This is the true Afghan way. And just willy nilly, if you can just go and snow people that way, then maybe you can get some good stuff through.

David Wright: 46:59

And that happens, right? I mean, you made me quite a lot of points in the book about how politicians, shirk and all kinds of like, all kinds of, right, so it's very normal.

Bryan Caplan: 47:07

Yes, nearly shorthand, generalist normal shirking, to go and set aside failed economic models and favor more successful ones based on mimicry does happen, but again, it's quite rare for you.

David Wright: 47:20

There's there's nothing back, though, you know, you make the point about people adopting the Soviet Union's norms of investigating themselves.

Bryan Caplan: 47:27

say they're the like, yeah, even though the model itself was a disaster, but the rhetoric was, it was so romantic, so emotionally appealing, that it's not surprising that it actually had so much power. I mean, again, like the, you know, to say, look, the other people should rule this, everything should be all shared by everyone in common. You know, I know that kind of thing that sounds great to people. Right? So we I remember the Oh, there's this old test of political knowledge. And the question was, you know, does the only true false the phrase from each according to his ability to each according to his need, appears in the constitution? Right? Of course, it doesn't. It's and Karl Marx, and I think it was Noam Chomsky, who said, well, it's an unreasonable mistake, because that's such a great idea. All right, it's like no, it's not a great idea. It's a it's an idea that sounds good. Very different from actually being right idea. Right. So the only there are ideas that are terrible, that sound good. There's ideas that are good, that are great, the sound bad. Things like voluntary paid human experimentation to go in, and then speed up the approval code a vaccine. That sounds terrible to normal people. But it's a fantastic idea. Right? Like it's one where I would say like, if you can't see that, that's a good idea. I can't I just can't imagine what's wrong with you that to sit there drill, like saying no, no. Like, they consented. If speed is it'll save hundreds of 1000s of lives. Just put these this squeamishness aside and get on board. Like, that's when we're actually I was daydreaming, like if I was president, I would just say look, we're doing this is there anyone that disagrees? If so, you must resign I will not be in the same room as someone that is not on board with this absolutely essential, totally logically bulletproof idea.

David Wright: 49:06

It reminds me of like, you know, there's appeal to your right to like expertise and authority which you know, you're unabashedly invoking here which doesn't always go well. Right. I mean, your point about you know, you've just made the point the Soviet Union, in you know, in China, like when you have a lot of authority concentrated on a smaller smaller space, you know, you get some you get some diverse outcomes

Bryan Caplan: 49:31

are actually very predictable outcomes. This is one rising part of the discourse Conservation Authority otherwise that violent fanatics seize control of country and then ruled until they died.

David Wright: 49:42

Yeah, and that's that's pretty common, but you know, your urgings towards moving from are collectivist and and i think that you know, what, what's the part about your book that kind of like most got me to wondering is like, what is the you know, kind of alternative cancer like to our current state and you know, you touch on a few ideas Maybe you can talk about them a little bit now. But in a world where you're contracting authority in any way, you can reduce this risk of picking the wrong authority. Right?

Bryan Caplan: 50:09

So you might see the book, you know, first thing is, it was like, step one is just admitting that you have a problem. So step one is to say Jessica said it is popular doesn't mean it doesn't mean it's true. Right? And not just pro forma, but to like really internalize that thought and say look, like yes, this idea, like it'll people like it. But is it true? Right, and instead of biting people's heads off for second guessing the people to get to say, Well, look, look, look, this is the question we should always be asking, like, what's actually true? So that's one thing I say that I talked about a number of other structural reforms, you're thinking of selling your things like I suggested that there could be a you could give the Council of Economic Advisers the same kind of power, the Supreme Court has said supreme court can say laws unconstitutional. The Council of Economic Advisers could rule the law is uneconomical, and therefore it gets validated. Right now, this sounds like science fiction. And I agree it is because there is a gale, there's a catch 22 with a lot of institutional reforms, which is the whole point of the institutional reforms is to change the policies that exist. And yet the positive, the foreign policies exist are there because people think they're a good idea. So there's that I do know, just talk about be a better education and trying to communicate economic ideas and just rational thinking more effectively. I mean, obviously, that is a horrible uphill battle. I mean, even like, some things that I think would make a big difference to just to go and spread the normal retrospective voting. And just to say, look, be agnostic about policy vote based on on actual observed results, rather than a grand theory, which you're not really able to figure out is too hard. You know, so that would be an improvement. Any like the so I'd say there's a lot of ways to improve on things that mean, the problem, again, is that they generally are fixes that people are not interested in because they think they're right.

David Wright: 51:56

There's a, a critique that I heard recently that I really find fascinating, which is, as I forgotten who where it came from, but the pundit was saying that, in the intellectual circles in China, the pro communist ones, I suppose, they have this critique of, of our governance system here, which is that it maximizes dissent. Because Because where the two party system is set up, you're naturally going to move the line, the ideological line to where to exactly slices the population in half. Because you know, the parties are, well, it's obviously not the case, right. But like near enough to that, where the the only have to carry 51% of the people to, to win. And so you're more likely to carry the 51% if you don't go for 60, because you'll have to water down the stuff that irritates the extremists soon you visit missing the party. So like the, you know, kind of like the the internal cohesively maximizing strategies to only go for 51%, which means that you necessarily are splitting all the issues up. And by maximizing disagreement, you in a sense, can never agree on anything. I wonder if you ever heard this? What do you think about that?

Bryan Caplan: 53:06

Yeah, so you could fix that story to make it true. But as you stated it, I don't think it can be right. So I mean, essentially, what you're describing is what's called the median voter theorem where politicians male moderate, in order to win, right, but, you know, bidding and like the result of that model is the exact opposite. Basically, both parties wind up being almost identical. And they that adopt middle of the road policies, which are white, which are at least not very far from what most people want. In order to be basically, in order for you to get the story of having strong disagreement. You need the parties to be worried about losing their extremists. And so each party basically refuses to compromise refuses to move the center in order to keep their extremists on board. So that is a very different model, that one would give you this results.

David Wright: 53:54

Do you think that's what's happening? Because if it feels kind of like, well, people talk about that, that is what kind of is happening. And

Bryan Caplan: 54:00

like, My own view is actually it's different from both the stories he was really going on, is that the main kind of polarization we have, it's not so much issue polarization as as mutual antipathy or hatred. Right. So here's the thing, you could have two very moderate politicians who still make their small differences into a matter of life and death. And I think that's a lot more of what we have in the US, is the what you call tyranny of small differences. Were again, like the actual difference in view between the typical democrat and typical republican on the minimum wage is fairly small, like only large majorities of both groups think that there should be a minimum wage, to disagree about whether the existing minimum wage is is high enough or whether it should be raised a bit. Right. Now, you might think that if that's your only disagreement, you wouldn't actually be angry at each other. But human nature allows people to hate each other and demonize each other even when the differences between them are quite modest, emotional. You know, my favorite example here, of course, is the wars religion between Catholics Protestants were to anyone who was just not a Christian. It's like, it's the same book, it's the same religion, these differences are totally trivial. But that doesn't stop them from drowning Europe in blood for a century, over differences that to any neutral bystander are not very important. I would say that, you know, despite the extreme antipathy that Democrats, Republicans Now bear towards each other, and there is good data bearing this out, in particular, in the 60s, hardly anyone had any anyone cared whether someone from their own family married someone from the other party, they've been doing the survey. And now it's actually one of the most objectionable things is for your family member to cross party lines when they marry. So that does suggest a degree of just disgust and resentment of the other. But in terms of actual policy views, if you were to go and just do a survey of world opinion and policy, American, the American Democrats or Republicans would be very close to each other by global standards. It's like, yeah, we don't want Korea. sure he's probably a lot of countries, hardly anyone here wants it. Right. And if you just go down the line for policies, you'll see that way, if you have a reasonably broad view of what policies are possible, you'll see that the American Democrats, Republicans are very close together. But that doesn't stop them from hating each other and want And just like with it with a passion, and they got any more than the fact that you know, Catholicism, Protestantism are virtually the same stop them from eating each other, or Sunni and Shia Islam are basically the same, but doesn't stop them from hating and killing each other. So that's what I think is going on.

David Wright: 56:33

So do you think that that is a completely irrelevant to the theme of the book? So is this is this just a total sideshow in an independent kind of like? development?

Bryan Caplan: 56:44

Right? Well, I mean, I would say that it fits in with the general theme of politics being the the religion of identity, I wouldn't say that the model specifically predicts this, it couldn't because this wasn't true 50 years ago. So I also mean, I guess what I would say is that the model is like, once you say people are rational, then you should at least be open to the possibility that they might be really upset about some martial differences.

David Wright: 57:08

Yeah. So we're out of time here, Bryan, but maybe you can strike an optimistic note for me. What can we say that's positive? I mean, if things are better, are they getting better? No.

Bryan Caplan: 57:18

So 2020 is the one year my life where I'm very confident things got worse for the world. So he like it happens right now. I mean, the only my view is actually the disease itself was quite modest by stork standard Spanish flu, properly measured was probably highly only 100 times as bad. But the policy reaction was so extreme that sent my view. So it was such an overreaction, that it was really quite disastrous. In Dubai, yeah. But he asked me for a positive note, UCLA, my view of positive note is just to say you step back and look out your window is the world on fire. It's not so be grateful for that the real sonicfire rice and then just to say he'll say like, like you consider like other places around the world where you might be consider other consider other times you might have been born and realize that by those standards, things are quite good. So I appreciate that. It also does tell people remember, like politics is not life. So while you can make it into your life, and spend all of your time looking at what the other side is doing and hating them, it is not a very good way to spend your life. So you know, like I write about this stuff, and yet I do try to spend most of my time thinking about more constructive things, you know, taking a hike with my kids is doing they like doing things that are enjoyable, right and just trying to feel positive about what was actually doable, which, again, like is overall pretty amazing. You know, like COVID messed that up a bit, but still like things will go back to normal. You probably by the end of the year, so I'm looking forward to normality. So that's, that's my version positive.

David Wright: 59:00

My guest today is Bryan Caplan. Bryan, thank you very much for your time.