Voting is a highly irrational exercise when a large numbers of votes are cast. Really? Yes, spending enormous amounts of time, the price/cost thereof, to become familiar with issues, is greater than the value of one vote as the chances of one single vote affecting the outcome of an election, where a large number of votes are cast, is tiny. Politicos are always harping that one needs to vote. However, a very good question is: Why do so many people vote in the first pace given its irrationality. (1) (2) (3)
But many people feel a responsibility to vote. If you feel that responsibility, and considering local politicos and their associated ilk and the spending habits thereof, complete with the assertion that such spending creates prosperity, one might consider the following when casting a vote:
“Government spending cannot create additional jobs. If the government provides funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other. If government spending is financed by borrowing from the commercial banks, it means credit expansion and inflation. If in the course of such inflation the rise in commodity prices exceeds the rise in nominal wage rates, unemployment will drop. But what makes unemployment shrink is precisely the fact that real wage rates are falling”. - Ludwig von Mises, Socialism, An Economic and Sociological Analysis, 1951, page 530.
Or stated alternatively:
“The government has nothing to give. The government is simply a mechanism which has the power to take from some to give to others. It is a way in which some people can spend other peoples' money for the benefit of a third party - and not so incidentally themselves". - The Invisible Hand in Economics and Politics, Milton Friedman, Institute of Southeast Asian Studies, 1981, p11.
However, politicos rely on Keynesian analysis, as Keynesianism gives them the right or duty to intervene and spend. How so? Try this:
“Keynes was exceedingly effective in persuading a broad group—economists, policymakers, government officials, and interested citizens—of the two concepts implicit in his letter to Hayek: first, the public interest concept of government; second, the benevolent dictatorship concept that all will be well if only good men are in power. Clearly, Keynes’s agreement with “virtually the whole” of the Road to Serfdom did not extend to the chapter titled “Why the Worst Get on Top.”
Keynes believed that economists (and others) could best contribute to the improvement of society by investigating how to manipulate the levers actually or potentially under control of the political authorities so as to achieve desirable ends, and then persuading benevolent civil servants and elected officials to follow their advice. The role of voters is to elect persons with the right moral values to office and then let them run the country.” - Milton Friedman, Richmond Federal Reserve Economic Quarterly, volume 83/2 Spring 1997.
So are “we all Keynesians now”? That is an oft cited quotation, from a source one would not expect, one Milton Friedman. Problem is, it is merely an excerpt from the entire statement. Here is the entire statement:
“In one sense, we are all Keynesians now; in another, no one is a Keynesian any longer. We all use the Keynesian language and apparatus; none of us any longer accepts the initial Keynesian conclusions.” - Milton Friedman, “Why Economists Disagree,” Dollars and Deficits (New York: Prentice-Hall, 1968), p. 15.
What about those Keynesian conclusions?
“For policy, the central fact is that Keynesian policy recommendations have no sounder basis, in a scientific sense, than recommendations of non-Keynesian economists or, for that matter, non economists.” After Keynesian Macroeconomics (aka After the Phillips Curve), Robert E. Lucas and Thomas J. Sargent, 1978, page 57
We end this exercise with lots of lever pulling by local politicos spending tons of taxpayer money year after year yet total employment in Guilford County has been flat or declining since its peak in the year 2000. Go figure. (4)
Beware of the non-statistic statistic by the moniker “jobs saved or created”. It is a known-known that government can’t create jobs. What about “saved jobs”. What in the devil does “saved jobs” mean? Saved jobs is a rather recent politico creation that in somehow and in some way bailing out or subsidizing particular industry (aka corporate welfare) with taxpayer dollars is some sort of net positive. Oh please spare us.
So if you feel that responsibility to vote, and considering local politicos and associated ilk, the spending habits thereof, with the assertion that such spending creates prosperity, maybe one doesn’t pull that lever next to that politico’s name so as not to empower particular politicos with the ability to “manipulate the levers actually or potentially under control of the political authorities”.
(1) Congressional Incentives and Government Failure, Chris Edwards, CATO Institute, September, 2015.
(2) The Myth of the Rational Voter: Why Democracies Choose Bad Policies, Bryan Caplan, 2007.
(3) Government Failure: A Primer in Public Choice, Tullock, Seldon and Brady, 2002.
(4) The Nussbaum Center for Entrepreneurship, Job Growth. Comparison of Guilford, Mecklenburg and Wake counties,
Saturday, October 3, 2015
Voting is Irrational, But if Voting, Be Rational about the Irrationality
Labels: government failure, Ludwig von Mises, Milton Friedman, Politicos through the mechanism of government, Robert E. Lucas and Thomas J. Sargent, voting is irrational in large numbers
BS Economics, cum laude, Private and Public Sectors, 1979, West Virginia University, Morgantown, WV. Undergraduate Minor in General Insurance. Chartered Life Underwriter (CLU), Huebner School of Economics, American College, 1992, Bryn Mawr, PA. Life Underwriter Training Fellow (LUTCF), 1986, National Association of Life Underwriters, Washington D.C.. Currently enrolled and completed one half of Chartered Property and Casualty Underwriter (CPCU) from the American College. 38 years insurance industry experience.