Democracy's 'Bad Policy' Bias

There is a difference between the study of Policy, and the study of Politics. Policy scholars ask: what should the government be doing with its coercive power? Politics scholars ask: given the current (or alternative) institutional frameworks and processes of the governing system, what is it likely that the government will end up doing with its coercive power? The Policy scholar, implicitly at least, imagines himself in the position of a kind of supreme dictator, whose policy decisions are automatically implemented by the government. The Politics scholar does not deal in these kinds of fantasies, but instead looks at what the people with the actual power in a society are likely to do. Both forms of study are useful for the social thinker in different ways. I myself normally take the role of the Policy scholar, but for this article I am going to wear the hat of a Politics scholar.

The question I will seek to answer is: what kinds of policies will a government operating with the institutional structure of representative democracy, a form of government common in Western countries, be likely to adopt? The answer, in a nutshell: bad ones! I will attempt to explain why in this article.

Rules of the Game

Democracy, at its core, is majority rule. Representative Democracy is majority rule when it comes to electing leaders, but then rule by the elected leaders at other times. In order to be elected in a democracy, politicians have to somehow cobble together a coalition of voters to support them at election time, a coalition that must outnumber the coalitions put together by rival politicians. Once elected, victorious politicians do not have to constantly abide by the wishes of the majority of would-be voters, but if they want to be re-elected, they cannot afford to alienate too many supporters in between elections.

Two Complementary Sources of Bad Policy Bias:

1. Rational Voter Ignorance:

Government has the ability to stick its fingers in many pots; interfering with many aspects of many different industries and areas of life, if it so chooses. In a democracy, voters are asked to decide, for every industry and area of life: 1. whether the government should interfere or not, and 2. if so, what exactly its intervention should consist of. To intelligently answer the first question requires at least an understanding of economics and the other relevant social sciences, and often at least a bit of knowledge about the industry or area of life in question. If the first question is answered in the affirmative, to intelligently answer the second question requires detailed, in-depth knowledge about that industry or area of life.

This is a heck of a lot of knowledge that the voter must possess if they are to make an intelligent choice. A significant amount of time and effort would have to be invested in order to even approach the goal of casting a ballot intelligently, taking all issues into due consideration. Thus, the costs of voting intelligently are quite high. At the same time, the benefits of voting intelligently are quite low. This studious, mythical voter’s choice counts as just one in millions of votes cast. Their highly researched and informed opinion could well be neutralized by another voter’s choice that was made based on the hairstyles of the competing party leaders.

Time is money, and most people would rather spend their time making money or doing something they really enjoy, rather than selflessly contributing to an infinitesimal increase in the intelligence of the average vote cast. Hence the phenomena of rational voter ignorance. Due to the major costs and minor benefits of getting really informed about all the relevant political issues, it is a rational course of action, for the vast majority of people, to simply remain uninformed about most political issues.

2. Interest Group Politics:

If rational voter ignorance is a real phenomena, than why do we observe so much political activism, so many people getting so involved in politics? Enter Interest Group Politics. It is irrational, from the point of view of most people, to get well-informed about all of the relevant political issues so as to be able to cast a truly intelligent and well-considered ballot. However, many of these people will find it rational to pick a particular political issue and really get involved with this issue. Why? Well, the costs of learning about one political issue, particularly if it’s in an area that you find particularly interesting, are a lot lower than the costs of learning about all of the political issues that are at stake in an election (ie. all of them). And, the benefits of casting a narrowly-informed vote, one that incorporates knowledge of this one political issue, are much higher than the benefits of casting a broadly informed vote. This can be for either commercial or personal reasons.

A commercial interest group seeks to encourage government policies that will tilt the economic playing field in favour of the interest group’s members, allowing them to make more money. Some examples include: 1. Domestic producers groups lobbying for tariffs to exclude foreign competitors; 2. Professional associations lobbying for licensing restrictions to keep down the supply of people allowed to do their jobs and thus their own incomes up; 3. Agricultural groups lobbying for government subsidies for their members’ activities.

As an isolated voter, trying desperately to cast a vote that reflects the ‘general interest’ of society, you are weak; as a member of a commercial interest group, voting based on the narrow economic interests of members of the group, you are strong. The latter is a much more understandable and personally beneficial way of voting than the former; and grouping together as an interest group gives the group real clout when it comes to swaying politicians, something that the isolated voter does not possess.

But not all interest groups are commercial; there are also personal interest groups. Most people feel that politics should be loftier than the mere grubbing for personal economic advantage exhibited by the commercial interest groups. However, the barriers to casting a truly balanced and well-informed vote remain as high as ever. As a result, the path that many people take is to pick a few political issues about which they are passionate, for whatever reason, and then vote based on the candidate’s position on these issues almost exclusively. These issues are not usually very technical ones, such as monetary policy, trade policy, subsidies, licensing, or technical tax reform: most people find such issues to be too dry and boring to learn about, and generally not things to get very passionate about. Instead, they are issues that people can confidently form opinions about fairly easily, and that arouse people’s passions. Such issues include: 1. Abortion 2. Gay Marriage 3. Should we invade Country X? 4. Environmentalism. 5. Universal Healthcare. 6. University tuition fees. 7. Labor Unions. 8. Redistribution of Wealth. 9. Racism/Sexism.          

Many political commentators applaud people who get involved with these personal interest groups for their alleged ‘civic engagement’ and ‘public spiritedness’. Actually though, voting based almost exclusively on your official or unofficial membership in such groups is almost as narrow as voting based almost exclusively on membership in a commercial interest group. It seems less greedy and crass, but unfortunately the actual results are almost the same: an overly narrow political focus leading to bad policy results overall.

Imagine that a politician cobbles together a winning coalition of the following commercial and personal interest groups: domestic steel producers, dairy farmers, the auto workers union, the anti-abortion group, the anti-gay marriage group, and the environmentalists. The policies that he will probably have to promise are: 1. Higher tariffs on foreign steel. 2. Higher subsidies to dairy farmers. 3. Legislation to give the auto workers union leaders more power or leverage in negotiations. 4. To make abortion a criminal offence. 5. To not recognize gay marriage legally. 6. To legislate tougher standards on industrial emissions and to set aside more areas as national parks.

There are three serious problems with this platform. First, many of these policies will end up harming either the general consumer of goods or services by making them more expensive, or the general taxpayer who must fund these policies, or both. These general groups are not suitable interest groups; and hence their interests have little chance of being protected via the political process. Second, what if you are a voter that, for instance, wants abortion to be legal but that also wants tougher standards on industrial emissions? Should he vote for the candidate or not? Such a voter will be forced into a ‘lesser of two evils’ voting scenario, and the part of his opinion that did not determine his vote will be disregarded by the politicians.  Third, this platform does not deal at all adequately with all of political issues facing the government to be elected, nor does any real political platform. The politician has already made his coalition, so there is no need to promise any additional policies. Political issues not addressed, such as monetary policy, can simply be decided by the elected politician at will, without any democratic input, in whichever way serves his interests.

Thus, due to the nature of democratic politics, voters segment themselves into various commercial and personal interest groups, who consider politics exclusively from the point of view of their own narrow economic interests or pet personal issues of interest. Coalitions of these narrow interest groups that politicians cobble together are in no way a substitute for broad, well-considered, and well-informed voting, aimed at promoting the ‘general interest’, by the majority of voters. Unfortunately, due to the phenomena of rational voter ignorance, the latter is not achievable, and hence democracies will always be dominated by narrow interest groups. The result will be that the general interests of citizens will be routinely sacrificed to narrow special economic interests and to narrow, tunnel-vision perspectives on emotional issues, such that almost everyone in the society will be made worse off by the totality of the democratic process.

Alternatives:

So democracy has some serious problems: but what are the alternatives? Authoritarian systems are also dominated by interest groups; the main difference is that access to firepower and fighters replaces the number of voters at its disposal as a measure of interest group power (access to money is important to interest groups in both systems).

One alternative, tried by the US in its earlier years, is limited government, or ‘fenced-in democracy’. Here, the system is democratic, but the government is only permitted to interfere in a limited number of industries and areas of life. A written document, the Constitution, is what is supposed to limit the government to these areas. The problem is that a piece of paper has no real power to limit government. Through a series of constitutional amendments, changes in public opinion, and creative ‘interpretations’ by the US Supreme Court, most of the limits originally placed on the US federal government were pretty much eviscerated by the end of the 1930s. The democratic system broke through its fences, and there is no reason to believe that the fate of any future experiments in limited government would be any different.

Another alternative is to attempt to do away with the idea of having a centralized, monopolistic government entirely. The free-market would reign supreme in all areas, including in the provision of law and the protection of person and property against aggression, areas long thought to be the core, fundamental functions of any government. A combination of private security forces, ‘crime insurance’ and ‘contract insurance’ companies, ‘personal reliability’ rating agencies, and private arbitration firms could conceivably perform these functions in a society without a government. One could of course think of a number of problems that might arise with such an institutional structure, the analysis of which would concern Politics scholars. But given how flawed democratic systems are, the question is: which institutional structure would result in the more serious problems, democracy or a Stateless society? I, for one, am not sure what the answer to this question is, but I do know that the question deserves a lot more attention than it has currently been given.