FACTS AND TOOLS

1. David Mayhew’s classic book Congress: The Electoral Connection argued that members of Congress face strong incentives to put most of their efforts into highly visible activities like foreign travel and ribbon-cutting ceremonies, instead of actually running the government. How does the rational ignorance of voters explain why politicians put so much effort into these highly visible activities?

2. An initiative on Arizona’s 2006 ballot would have handed out a $1 million lottery prize every election: The only way to enter the lottery would be to vote in a primary or general election. How do you think a lottery like this would influence voter ignorance?

3. We mentioned that voters are myopic, mostly paying attention to how the economy is doing in the few months before a presidential election. If they want to be rational, what should they do instead? In particular, should they pay attention to all four years of the economy, just the first year, just the last two years, or some other combination?

4. In his book The Myth of the Rational Voter, our GMU colleague Bryan Caplan argues that not only can voters be rationally ignorant, they can even be rationally irrational. People in general seem to enjoy believing in some types of false ideas. If this is true, then they won’t challenge their own beliefs unless the cost of holding these beliefs is high. Instead, they’ll enjoy their delusion.

Let’s consider two examples:

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5. In the television show Scrubs, the main character J. D. is a competent and knowledgeable doctor. He also has very little information outside of the field of medicine, admitting he doesn’t know the difference between a senator and a representative and believes New Zealand is near “Old Zealand.”

6. Driving along America’s interstates, you’ll notice that few rest areas have commercial businesses. Vending machines are the only reliable source of food or drink, much to the annoyance of the weary traveler looking for a hot meal. Thank the National Association of Truck Stop Operators (NATSO), who consistently lobby the U.S. government to deny commercialization. They argue:

Interchange businesses cannot compete with commercialized rest areas, which are conveniently located on the highway right-of-way … Rest area commercialization results in an unfair competitive environment for privately-operated interchange businesses and will ultimately destroy a successful economic business model that has proven beneficial for both consumers and businesses.9

7. The following figure shows the political leanings of 101 voters. Voters will vote for the candidate who is closest to them on the spectrum, as in the typical median voter story. Again as usual, politicians compete against each other, entering the “political market” just as freely as firms enter the economic market back in Chapter 11.

8. Let’s rewrite a sentence from the chapter concerning the Roman Empire: “As the American Empire grew, courting politicians in Washington became a more secure path to riches than starting a new business.” Does this seem true today? If it started happening, how would you be able to tell? In your answer, put some emphasis on market signals that could point in favor or against the “decadent empire” theory. (Hint: By some measures, Moscow has the highest real estate prices in the world, and it’s probably not due to low housing supply.)

1. Is rational ignorance the whole explanation for why voters allow programs like the sugar quota to persist? Perhaps not. In the early 1900s, the government of New York City was controlled by a Democratic Party organization known as Tammany Hall. In a delightful essay entitled “Honest Graft and Dishonest Graft” by George Plunkitt, one of the most successful politicians from the Tammany machine, he argued that voters actually approve of these kinds of government-granted favors. (The essay and the entire book, Plunkitt of Tammany Hall: A Series of Very Plain Talks on Very Practical Politics, are available for free online.)

For example, Plunkitt said that ordinary voters like it when government workers get paid more than the market wage: “The Wall Street banker thinks it is shameful to raise a [government] clerk’s salary from $1500 to $1800, but every man who draws a salary himself says, ‘That’s all right. I wish it was me.’ And he feels very much like votin’ the Tammany ticket on election day, just out of sympathy.”

3. Political scientist Jeffrey Friedman and law professor Ilya Somin say that since voters are largely ignorant, that is an argument for keeping government simple. Government, they say, should stick to a few basic tasks. That way, rationally ignorant voters can keep track of their government by simply catching a few bits of the news between reruns of How I Met Your Mother.

4. We mentioned that the median voter theorem doesn’t always work, and sometimes a winning policy doesn’t exist. This fact has driven economists and political scientists to write thousands of papers and books, both proving that fact and trying to find good workarounds. The most famous theoretical example of how voting doesn’t work is the Condorcet paradox. The Marquis de Condorcet, a French nobleman in the 1700s, wondered what would happen if three voters had the preferences like the ones in the following table. Three friends are holding a vote to see which French economist they should read in their study group. Here are their preferences:

5. In the previous question, you showed that sometimes there may be no policy that beats every other policy in a majority rule election and, as a result, the agenda can determine the outcome. In the previous question, all of the policy choices on the agenda were as good as any other, but this is not always the case. Imagine that three voters, L, M, and R, are choosing among seven candidates. The preferences of the voters are given in the following table. Voter M, for example, likes Grumpy the best and Doc the least.

6. In the 1998 Minnesota gubernatorial election, there were three main candidates: Norm Coleman (the Republican), Jesse “The Body” Ventura (an Independent), and Hubert Humphrey (the Democrat). Although we can’t know for certain, the voters probably ranked the candidates in a way similar to that found in the following table. The table tells us, for example, that 35% of the voters ranked Coleman first, Humphrey second, and Ventura third; and 20% of the voters ranked Ventura first, Coleman second, and Humphrey third; and so forth.

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!launch! WORK IT OUT

1. Suppose there are two politicians running for office, N and O. Who will vote for N? Who will vote for O? Which candidate will win the election?

2. O drops out of the campaign after the local paper reports that he hasn’t paid his sales taxes in years. P enters the race, pushing for higher taxes, so it’s N vs. P. Voters prefer the candidate who is closest to them, as in the text. Who will vote for N? Who will vote for P? Who will win? Who will lose?

3. In part b, you decided who was heading for a loss. You get a job as the campaign manager for this candidate just a month before election day. You advise her to retool her campaign and come up with a new position on the sales tax. Of course, in politics as in life, there’s more than one way to win, so give your boss a choice: Provide her with two different positions on the sales tax, both of which would beat the would-be winner from part b. She’ll make the final pick herself.

4. Are the two options you recommended in part c closer to the median voter’s preferred option than the loser’s old position, or are they further away? So in this case, is the median voter theorem roughly true or roughly false?