Bryan Caplan  

Voters As Mad Scientists

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More on the Reformation... Health Care and Real Wages...

Voters aren't selfish. That's an important question where the political scientists are right and the economists are wrong. But I part company with the political scientists when they draw implications about how well democracy works. After they shoot down the Self-Interested Voter Hypothesis (SIVH), lots of political scientists can't resist the following leap:

Economists argue that voter selfishness makes democracy work badly. Fortunately, however, voters aren't selfish, so most of the "democratic failures" that economists fret over are just in their heads.

This would be true if voters actually understood policy. Selfish voters would choose the policies best for themselves; unselfish voters would choose the policies best for society. Then, unselfishness gets you a better overall result.

But what happens if people have systematically biased beliefs about policy - for example, if they underestimate the social benefits of the market mechanism? How does bad cognition interact with voter motivation?

This is the question I ask in one of my favorite papers. (Aside: Tyler Cowen said it was unpublishable. I told him he was wrong after Social Science Quarterly took it, but he replied that I was being "too essentialist"!) The gist of my answer is that if voters have systematic biases, unselfishness is worse for society than selfishness.

Why? If selfish voters misinterpret markets as a method for the rich to exploit the poor, at least the rich will still favor markets. They'll want what they falsely see as their "pound of flesh." But if unselfish voters misinterpret markets as a method for the rich to exploit the poor, the rich and poor alike will unite against the imaginary evils of the market. Instead of petty squabbling, we get a consensus for folly.

If you find it hard to believe that unselfish motivation ever makes the world worse, think about a mad scientist. He imagines he's got the cure for what ails you, but all he's got is a syringe full of cyanide. If the mad scientist were selfish, he'd demand payment for his "treatment," and you'd be safe. "Thanks, but no thanks!" The real danger is the unselfish mad scientist. He'd insist on helping you whether or not you paid. Indeed, he'd probably help you even if you screamed "No!" "You'll thank me once you're cured," he'd insist.

When I see how strongly public opinion supports grotesque policies like European labor market regulation, I can't help but think of Dr. Frankenstein.


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TRACKBACKS (6 to date)
TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/235
The author at The Cardinal Collective in a related article titled The Curse Of Unselfishness writes:
    Bryan Caplan on why unselfish voters can be worse than selfish ones: Why? If selfish voters misinterpret markets as a method for the rich to exploit the poor, at least the rich will still favor markets. They'll want what they... [Tracked on April 11, 2005 2:36 PM]
The author at voluntaryXchange in a related article titled Voters aa Mad Scientists and the Do Somethings writes:
    That title sounds like a punk band. I always tell my macroeconomics students that one of the problems with democratic societies is that we elect people to do something even though there are many situations when doing nothing is either [Tracked on April 13, 2005 2:20 AM]
COMMENTS (29 to date)
dsquared writes:

Bryan, your link ought to go to some actual analysis explaining why European labour market regulations are "grotesque", but it actually goes to a link to you, saying the same thing, somewhere else. This ouroboros of reference is unconvincing to say the least.

I also note that you appear to be telling GMU students that "generous unemployment benefits with long duration" constitute a labour market regulation. They clearly don't. They're a government subsidy to idleness, but that's not the same thing as a labour market regulation at all.

By the way, you appear to be claiming that the US unemployment rate is "less than 5%". The BLS figure for March was 5.2% and the ILO figure for February (comparable with European numbers) was 5.4%; close, but both these numbers are greater than 5%.

You also refer to "[European] enormous and persistent unemployment rates of 10, 15, or 20%" and this is wrong by significant amounts; the actual figures are 8.0% in Italy, 9.8% in France and 9.7% in Germany (ILO measure). Looking at the more regulated social welfare states of Europe, the Netherlands was on 4.7%, Denmark on 5.0% and Sweden on 6.5%. The only major European economy for which your statement is even nearly true is Spain (10.3%) and Spain has a known and large fraud problem which biases the unemployment number up. Japan, a regulated labour market if there ever was one, has an unemployment rate of 4.6%.

It is possible to have a debate about the merits of different labour market arrangements, but it would really have to start from a position of basic accuracy about the figures.

Wilson writes:

Sweden on 6.5

The numbers from Sweden do not include people on "disability" ... many of which are curiously productive when it comes to leaving posts on Usenet.

dsquared writes:

Well presumably their unemployment isn't involuntary then; if someone has managed to work the system to pay them to stay at home, then I doubt that they would describe this as "grotesque". For what it's worth you can add another thick half percent to the US figure for people who aren't in the labour force because they're in prison; that's what I'd call "grotesque".

asg writes:

I love the mad scientist example.

asg writes:

By the way, while I do not doubt in the slightest the figures dsquared quotes, the ILO web site makes it awfully hard to find individual countries' unemployment rates; I could not find the French, German, and Italian figures he cites although it was easy to find averages across the EU.

Noumenon writes:

::considers subscribing to Caplan's blog in order to read dsquared's comments::

Jason Ligon writes:

I'd have to see some awfully compelling data to convince me that people aren't self interested when it comes to voting. How could such a claim be squared with any of the findings of the Public Choice school?

What does strike me as likely:

1) An analysis of self interest can't be confined to dollars when regulation of the activity of others is an option. Dollars are a proxy for economic self interest because there aren't many other choices available. However, it would be a very high dollar value for a NOW member to trade away access to abortions.

2) Self interest reflected in voting habits follows dollars more closely at low income levels than high income levels. This is just to say that there is a diminishing marginal value of dollars relative to other regulatory, er, opportunities as one has more dollars.

3) The two party, winner take all system confuses analyses of voting for self interest to a great degree. I may hate everything else about a candidate, but if the other guy is trying to ban private ownership of firearms, I will do whatever it takes to keep him out of office. I am being self interested when I do so.

Hi, Noumenon.

You wrote:

::considers subscribing to Caplan's blog in order to read dsquared's comments::

You do not have to subscribe to EconLog to read dsquared's or anyone else's comments here.

However, if you wish to add your own comments you do have provide a viable email address. Please see the EconLog FAQ and also the Reminder About Comments.

Lauren
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Library of Economics and Liberty
email: webmaster@econlib.org

Lancelot Finn writes:

I'm inclined to believe that SIVH is false. The "rational" voting choice is to stay home, since the odds that your vote will make a difference are infinitesimal. So if you bother to vote, it's most likely to be out of a sense of duty, and for a cause of some sort. Not necessarily a good cause. Ethnic hatred, of immigrants or minorities, is a frequent bad cause for turning out to vote.

If people ever behave as "rational" voters, their votes are probably a secondary, rather than a primary, effect of their interests. Thus, to take the case of Jason Lignon, I would guess that Jason probably believes, not only that it is in his self-interest to own a fun, but also, rightly or wrongly, that he has a constitutional and/or natural right to own a gun. If he owned a gun from self-interest but believed that it was morally wrong, something he was ashamed of, and that a universally gun-toting society would be a bad thing, he probably wouldn't announce his gun ownership in the comments of a blog. And in the voting booth, I suspect he would vote against gun-rights candidates, or at least be more likely to do so. In fact, Jason Lignon may own a gun because of his moral beliefs as much as because of his self-interest. If he thought gun ownership would help protect him but was nonetheless bad, he might choose not to own a gun.

It's the same on economic issues, and, worse, on ethnic and communal issues. If I am rich, I am likely to rationalize my wealth by adopting pro-capitalist beliefs, according to which property is a natural right, and my economic activities benefit others. If I am welfare-dependent, I am likely to rationalize my dependency on a welfare check by adopting beliefs about the dysfunctional and exploitative nature of pure capitalism. If I am a Serb, I am likely to accept historical narratives which vilify the Croats. We vote based on beliefs and values, but to some extent we adopt beliefs and values which are self-serving and serve to justify and legitimize whatever lives we have chosen.

If people voted "rationally," (including if interests give rise to self-serving beliefs and values, which in turn motivate the voter) it would create problems for democracy, first because redistribution is virtually always in the interests of the median voter, second because majorities have little incentive to respect minority rights. So it's good news that SIVH does not hold. Yes, there is a possibility of mad scientist voters; but there would be if SIVH held, too.

Michael Barone's essay on "The Trustfunder Left" is a good portrayal of one group of mad scientist voters. Barone writes:

Examining the political map of America, as I am obliged to do as I write the chapters of "The Almanac of American Politics 2006," reveals a previously unidentified segment of the American electorate, one which has been growing for some years now but has reached a critical mass and become a major force in one of our two great political parties: the trustfunder left.

Who are the trustfunders? People with enough money not to have to work for a living, or not to have to work very hard. People who can live more or less wherever they want. The "nomadic affluent," as demographic analyst Joel Kotkin calls them.

These people tend to be very liberal politically. Aware that they have done nothing to earn their money, they feel a certain sense of guilt. At the elite private or public high schools they attend, and even more at their colleges and universities, they are propagandized about the evils of capitalism and globalization, and the virtues of environmentalism and pacifism. Patriotism is equated with Hiterlism.

Most socialist leaders and thinkers, including Marx and Engels, Lenin, and Rosa Luxembourg, have been from the middle class or the aristocracy. Osama bin Laden, whom Niall Ferguson calls an "Islamo-Bolshevist," follows the same pattern. Living on unearned wealth themselves, they consider all wealth unearned. And in order to assuage their guilt, they embrace self-confessedly generous, idealistic causes.

Analysis of SIVH, I think, leads to an appreciation of why Christianity is correlated with democratic capitalism. For Christians, moral judgment should be pointed inwards as much as outwards. "Judge not," said Jesus, "that ye be not judged." A Christian is forever reminded that he, too, is a sinner. He is exhortation to introspection, to doubting his own rightness. This interferes with the process by which we let our self-interest invade our beliefs and values.

To reiterate, people vote based on beliefs and values rather than self-interest; but in order to justify themselves, they are likely to form beliefs and values that correspond to their self-interest. A Christian, aware he is a sinner and exhorted to judge not, is less likely to form beliefs that justify his class interests. This is especially important among the poor, lower middle class, etc., who are less likely to blame the rich for their problems, or demand redress from the government, and more likely to look inward for the source of their problems. It is no accident, then, that democratic capitalism has always flourished most, and continues to flourish most, in Christian countries.

Lawrance George Lux writes:

Bryan,
I'm afraid I still agree with Tyler. lgl

Publicus writes:

(1) You omit the possibility that voters might be thoroughly selfish and hopelessly confused intellectually. (2) The idea that the rational selfish thing to do is not to vote assumes that there is no utility value in voting.

Tino writes:

'[the actuall unemployment of] Sweden is 6.5%.'

This is a JOKE. Even the official unemployment number, not including those on early retirement, sick-leave, welfare etc is 8.5%, inkl. those in "unemployment programs".

Another 4% are on sick-leave at any given day, plus some 9% of the adult population who are early retired(!). Another approx. 2-3% are on welfare.

The head of Swedens socaildemocratic Union recently admitted that the true unemployment numbers were "20-25%"

For 2003 the State reports 19.6% of the adult population who received all their income from various forms of welfare (in equivalent all year persons, which means that at any given moment the number is even higher).

The total transfers are more than 25% of GDP, most of which goes to support healthy adults. In comparison only some 18% of the famed Welfare States GDP is spend on Health Care, Education, Elderly care and Childcare *combined*.

If you are on sick-leave you get a better deal than unemployment benefits, and often a better deal than working (an estimate is that the average Swedish workers gains 8 dollar/day by going from unemployment to work, due to the high benefit-levels).

When total taxes are over 60% for common workers and the marginal rates 75% for those earning more than 50 K that is what happens. But most taxes are hidden, baked in with prices and given other names. This is called Fiscal Illusion, which I know proff. Caplan has worked on. In Sweden the voters estimate the tax rate to be 40%, rather than the true number of 63%.

http://www.skattebetalarna.se/BinaryLoader.aspx?ObjectID=5120&PropertyName=File1&CollID=File

I have put links, the rest are in Swedish but you can see the numbers. I know you can't read it, but the last link confirms Proff. Caplans point about economic confusion perfectly. Commenters explained the 20%+ unemployment numbers by "too low demand", "the need to fight inflation" and "too high intress rates". Inflation and intress rates are both at historical lows in Sweden, not that the argument wouldn't have been stupid anyway.

Sweden is a case study of rational irrationality. In the midds of a massive crisis for public health care the Socialdemocratic state has passed popular (populist?) laws abolishing privately owned Hospitals, commenly belived to be the cheapest (for the taxpayers) and best in the country. The argument is not efficiency, but that it is 'immoral' to benefit from the sickness of others. Please explain to me how rational altruistic voters or self-intrested voters could support a laws that helps absolutely nobody (the nurses etc. generally earn more at private hospitals, the taxpayers pay less for better care, the sick repport much higher satisfaction, and even most managers of public hospitals are happy since they are cronically short on beds).

This is the sad mess american so called "liberals" dream of imposing on this nation.

http://www.scb.se/templates/pressinfo____95912.asp
http://www.ams.se/RDFS.asp?A=58512&L=32472
http://www.scb.se/templates/pressinfo____120435.asp

http://danne-nordling.blogspot.com/2005/03/lo-har-rtt-om-enorm-arbetslshet.html

Tino writes:

"you can add another thick half percent to the US figure for people who aren't in the labour force because they're in prison; that's what I'd call "grotesque".

1. You assume that the people in prison would not have jobs if they were not in jail. In fact at least half of them would.

2. The murder rate has halved since 1981, with simillar trends for other violent crimes. But as usual the left only has sympathy for rapist, murderes and terrorist, and non for their victems. No wonder Hillary wants to give the vote to violent criminals, she is pandering to her political base.

"Well presumably their unemployment isn't involuntary then"

The incentive structure that makes work unprofitable (taxes, subsidies and regulations) is enforeced through coersion. The same people would of course like to work if the state had not put a massive wedge between their output and what they got to keep. So clearly this IS involuntary.

The slums of Paris and Stockholm are soon riveling the american innder cities, and Europe didn't need 400 years of Slavery and Segregations to get there. Just the collective stupidity of socialism.

dsquared writes:

Does anyone think that "early retirement" is just like being unemployed? Really?

Mikael writes:

Unemployment numbers are certainly hard to compare (even though OECD prints something they call "standardised unemployment rates"). But if we look at employment, the figures for the regulated social welfare states of Europe (i.e. Scandinavian countries) are at least as high as US figures (Swedes has a higher employment rate than US as one example).

Thus, I wish could see some compelling evidence that regulated labor markets is the answer to european unemployment, but...that is quite hard (as confirmed by several OECD papers). It is more likely to affect flows into and out of unemployement rather than levels.

Bryan Caplan writes:

A couple quick replies:

To dsquared: Those labor econ notes were written several years ago when U.S. unemployment was below 5%, and (see Hans Siebert's 1997 JEP piece) *average* European unemployment was around 11%. The next JEP piece by by Steven Nickell gives a country break-down, with 1989-1994 rates of 14.8% for Ireland and 18.9% for Spain. I don't have time to check, but since the average rose sharply from 89-94, and stayed pretty flat until 1997, there is good reason to think that other countries got into that ballpark.

To Jason Ligon:

1) An analysis of self interest can't be confined to dollars when regulation of the activity of others is an option.

I agree. There are many studies that use finer-tuned measures of self-interest, yet fit nicely with my summary. See the survey article by Sears and Funk in Mansbridge, ed., *Beyond Self-Interest*.

2) Self interest reflected in voting habits follows dollars more closely at low income levels than high income levels.

I'm pretty sure this has been tested and found to be incorrect, but I don't know a citation off the top of my head.

3) The two party, winner take all system confuses analyses of voting for self interest to a great degree. I may hate everything else about a candidate, but if the other guy is trying to ban private ownership of firearms, I will do whatever it takes to keep him out of office. I am being self interested when I do so.

There are lots of studies that test for self-interest on single issues. They often find even less evidence of self-interest than for voting. For example, during the Vietnam War, friends and relatives of *conscripts* (no self-selection here) were *more* in favor of a more aggressive prosecution of the war, even if it meant higher risk for soldiers. I believe Sears and Funk has a summary and the citation.

El Presidente writes:

Bryan and Jason

With regard to:
The two party, winner take all system confuses analyses of voting for self interest to a great degree.

This is true but not nearly half of the issue. Bryan's Vietnam example illustrates that. If we want to answer questions about intentionally self-interested behavior we have to also acknowledge the differing types of complexity involved in voting behaviors (personality, prioritization, ignorance). My primary problem with trying to discern patterns reflecting SIVH is that voter reasoning is replete with the informal logical fallacy of Argumentum ad Hominem Circumstantial. Our representative democracy (AKA democratic republic) substitutes candidate preference for policy preference.

A logical exception is when voting on ballot initiatives. If we want to free ourselves from personality preferences and prioritization of issues in evaluating voter behavior we should focus on these types of elections. You might want to skim "Citizens as Legislators" and "Polycentricity and Local Public Economies". Both help to describe how individuals and communities address collective needs/problems; not necessarily how they vote for representatives. They are, in fact, distinct behaviors.

It seems to me that you would have to deconstruct a vote into the issues at play in each voter's decision-making process, evaluate their individual issue preferences and priorities, and then reconstruct their preferences into a voting behavior to complete the analysis in representative elections. I haven't been convinced by any such reassembly that I've read that this has ever been done successfully.

Admittedly without any proof to speak of, my own explanation for voting shorthand (ad Hominem) is that voters are progressively isolated from the full and direct impact of their voting decision. The degree of impact the voter anticipates has something to do with the quality and quantity of information they seek and therefore the reliability of any SIVH analysis.

A game that politicians play (this is confessionary) is to elevate an issue to a higher arena (one with a broader constituency) than it might appropriately deserve in order to change the dynamics of voter behavior. It backfires when you hit a nerve on a particular issue. A good current example can be found in the extensive threats to use ballot propositions by Governor Schwarzenegger. Again, speaking solely from personal experience and observation, the more often this occurs, the less involved and therefore less concerned voters seem to be. Oddly, those who don't vote seem to agree when they express fatalism or indifference. It's easier to get reelected when your participatory constituency shrinks and your informal job description becomes clearer. You may want to reexamine notions of voter sovereignty and voter intent. I voted for a write-in candidate for president in 2004. It was ideological, fatalistic, and if you asked me, self-interested. But, you could produce respectable arguments to each of those adjectives.

dsquared writes:

Bryan: I don't want to be a dick here but 1994 was eleven years ago!

Mikael, and others: We really, really, really need to make a distinction between "social welfare states" and "regulated labour markets". Regulated labour markets (potentially) stop people from working when they want to. Social welfare states pay people when they don't want to work. It's not the same thing at all.

Bill writes:

I'm sure glad I chose physics over econ or poly sci. Trying to determine whether voters are selfish or unselfish seems impossible to me. For example, a citizen votes on a bill concerning socialized mental-health care:
1) Does this person vote yes because they care for the mentally ill or they think that the streets would be safer for them?
2) Does this person vote no because they don't want their taxes to increase or because they think that the government will likely do more harm than good?

If asked, would this person even tell the truth about why they voted they way they did?

Heck, every four years I vote for president knowing that my vote will have no effect on the outcome, but I do it anyway. I can barely discern why I vote the way I do, much less figure out why others vote the way that they do. IMO, most voters have no real idea of the consequences of their votes. Without economic literacy, how can any such person cast a "reasonable" vote--one that has an overall positive result.

Here's an odd real-life example: A tenured professor of physics who is a Democrat. She favors Social Security, nationalized health care, etc. She also thinks that it is immoral for couples to have more than one child. Huh? This from a mathematical physicist? She is obviously an economic illiterate, since the decline in population would be so precipitous as to make these social programs totally untenable. Her views are contradictory at the least!

How do these voter theories deal with such ignorance? Isn't the ignorance much more important than voter self-interest, so much so as to make the question irrelevant? A little help here, please. I think I need it.

Tom West writes:

What on earth makes Bryan Caplan assume that the highest possible income is what is desired by voters? Certainly completely open markets may maximize total wealth, but I *strongly* doubt they maximize total or median happiness, and suprisingly enough, the voters believe this as well.

Happiness/satisfaction with wealth (above a certain long met level) is entirely comparative. No-one would want to live like an upper-class person of 1900, and we don't fret about living as well as someone in 2100 will.

Economists often wonder why the poor complain about growth when it betters their lot as well. Of course, if the wealth gap grows, their happiness goes down, even as their income goes up.

And, of course, open markets come at the cost of stability, and stability is *highly* prized by most. Labor mobility helps contribute to the wealth growth, but it doesn't contribute to happiness.

Then why do we pursue wealth, even at cost to our happiness? Because if *everyone* else is doing so, we risk falling behind, and *that* damages happiness even more.

So, if voters can slow wealth creation down in return for happiness producing stability and reduce happiness-diminishing inequality while doing so, who is Bryan Caplan to admonish them for doing so? People seem to be happiest with moderate growth accompanied by reasonable security with no-one growing too rich or too poor.

Small wonder economist don't get elected too often.

(And to those who would complain that this philosophy would leave us all lower standards of living, may I remind you that you probably *aren't* actively unhappy that all of our standards of living aren't twice as high as they are now. As long as everyone goes along for the ride, nobody really cares (except for a few outraged economists). (Obviously negative growth makes us unhappy because we compare with previous times instead of other people, etc., etc.) These are generalizations of voter desires, etc., etc.

Randy writes:

Tom,

Re; Of course, if the wealth gap grows, their happiness goes down, even as their income goes up.

Interesting statement, but it doesn't match my experience. Sure, I'd like to have as much money as Bill Gates, but the fact that Bill has more than I do doesn't change my happiness level one way or the other.

The reason your statement interests me is that you prefix it with the words "of course". The assumption that inequality is a source of unhappiness is very common among the left leaning crowd. I'm wondering what you base it on.

El Presidente writes:

Tom/Randy

Tom says we dislike falling behind and it detracts from our happiness. I agree. The wealth gap is important but more important is the profit gap or the equity of income distribution and taxation (undervaluing labor, overvaluing capital) because this determines the rate at which one might be able to catch up. It changes the nature of the bargain for labor and wages.

Randy says he doesn't feel badly because Bill Gates is filthy rich. OF COURSE you don't. But that's not the point Tom was making. If Bill is at the top of the income ladder who is on the bottom? Probably not you. You are probably in the middle and so the negative effects of his wealth fall less on you than they do on the unemployed folks who could be productively and willingly employed by the liquid assets he sits on as the almighty sovereign of computer operating systems. Wealth tends toward monopoly because at a certain point wealth can become unmanageable and abstract (APC, APS: once you get beyond lifetime financial security what good is another billion dollars) and if you have enough of it you can receive a greater return, in power if not wealth, from anti-competitive than competitive activities. That’s where accumulation of wealth can intersect the distribution of income and can begin to feel oppressive.

The voting behavior of an average person who understands this relationship and places a reasonable amount of weight behind it might, in fact, be economically self-interested. However, determining the right vote to moderate income and wealth gaps is very difficult for most people (myself included) if for no other reason than that, 9 times out of 10, they are voting for a person on a ballot instead of a policy.

Rick Stewart writes:

Tom West says:

'And to those who would complain that this philosophy would leave us all lower standards of living, may I remind you that you probably *aren't* actively unhappy that all of our standards of living aren't twice as high as they are now.'

Let me assure you I AM actively unhappy. The great 20th Century experiment in economies run by governments has left the entire world with perhaps one-half or less of the wealth we would overwise have had. Been to Africa? Been to Russia? Been to Latin America? They could use it.

Tom West writes:

Interesting statement, but it doesn't match my experience.

There's an fair bit of data to back it up. It seems pretty much built in, and has been documented in a bunch of primates as well as humans. (You can correlate unhappiness with a bunch of other variables including stress related illnesses, etc.) I can imagine that evolution favors the trait.

Bill Gates might not affect you much, but if everyone *but* you suddenly doubled their wealth, I *strongly* suspect that you'd be less happy than you were, even if your wealth rose by 50%.

Even the poor (in North America) live like kings compared to the rich of 100 years ago, but do you really think they feel the same satisfaction (in their economic accomplishments) as rich of 100 years past?

Let me assure you I AM actively unhappy.

Well, if it means that you are suffering the general consequences of long term unhappiness, including physical and mental health problems, you have my sympathies...

They could use it. [economic growth]

Certainly in the poorer nations, they could use economic growth (absolute poverty is absolute poverty). On the other hand, most industrialized nations feel poor only in comparison to the United States. Absent the United States, the citizens would be happier trading off growth for stability. A common refrain is the taking of measures that decrease happiness "because there is no other choice".

Tino writes:

"Regulated labour markets (potentially) stop people from working when they want to. Social welfare states pay people when they don't want to work. It's not the same thing at all."

1. You are wrong. Let me repeat: The welfare state does not "pay people when they don't want to work", it artificially reduces the the profitability of work and induces people not to (want to) work.

The same people would like to work in a envirement where the value created by work was not nulified.

2. Early retirement is roughly the same as long term unemployment in many countries in Europe (Scandinavia, Holland, Italy, Greece). People simply go from longterm unemployment to early retirement afte rsome time. We are not talking about sick people or those who have saved enough to enjoy their 60s as in the US. Most of the increase in early retiremtn in Sweden is 40-50 year olds who have been out of work for long times.

3. If people cared more about relative position than absolute income we would not observe Mexicans flooding the US, we would see american or at least Hispanic americans moving south. People obviously prefer to be lower class in America and own two cars rather than being upper middle class in Mexico and own one.

As usual the liberals are decoupling their political views (cheap to be wrong, everyone one bears the costs) from their private behaviour.

4. That people are not substancially happier now than 100 years ago is not a mysteri. We are genetically designed not to be happy for long periods. Happiness is mainly a ratio of outcome and expectations, with Mean Reversion. The refugee in Sudan who finds an extra piece of bread is probably happier than most of you reading this post, for a time.

Happiness is therefore the wrong measure of utillity. What matter is "being well off", in the sence that you rather want to be one than the other.

Bill writes:

Those of you that are unhappy because others have more money are just envious fools. If your happiness depends upon your wealth relative to others, you have some serious mental health issues. I grew up dirt poor, working since I was a child. I appreciate life when it's good, and don't when it's not. It has nothing to do with the relative wealth of others. I do get very unhappy when thieving socialists hold a gun to my head and steal my money to give to ADM, GM, seniors that have accumulated wealth, and people defrauding the welfare and disability systems. I grew up in a welfare community. MOST welfare and disability was fraud. This is my reason for hating limosine liberals that probably never new a poor person in their lives, e.g., John Kerry. I don't like rich-brat Bush either. Don't get me wrong. I don't dislike Bush and Kerry because of their wealth. I dislike Bush and Kerry because they use their wealth to steal my hard-earned income. I don't care how wealthy someone is relative to me, just don't use your wealth to tread on me!

Randy writes:

Bill,

Well said.

Tom West writes:

3. If people cared more about relative position than absolute income we would not observe Mexicans flooding the US, we would see american or at least Hispanic americans moving south.

Except, of course, that we live in a global culture. The yardstick of comparison is no longer just our next door neighbor, but what we see on TV, etc.

Secondly, many Mexicans are attempting to escape absolute poverty.

Thirdly, it's not (in general) the Mexicans who are relatively wealthy that are immigrating.

Fourthly, a *decrease* in absolute standard of living is going to hurt regardless of relative levels because you compare with previous standard of living (rather than comparing with others). That's why you tend not to see too much Southern migration.

Those of you that are unhappy because others have more money are just envious fools.

Or simply human.

If you're happiness is really dependent on your *absolute* standard of living, it's a good thing you weren't born 100 years ago. You'd have died of unhappiness at your standard of living, even if you lived in the upper class.

If nobody owns a television, you're happy with your radio. If everyone owns a television, suddenly owning the nicest radio of the block doesn't mean as much.

We are genetically designed not to be happy for long periods. Happiness is mainly a ratio of outcome and expectations, with Mean Reversion.

I will say that stability *is* an important component of long term happiness. An unstable situation does depress happiness over the long term. That's why people value it so highly.

Happiness is therefore the wrong measure of utility. What matter is "being well off", in the sense that you rather want to be one than the other.

Interesting and it does give rise to "what is the purpose of government and/or life?". On the other hand, if you asked people whether they'd rather their children have a happy life or a wealthy one, I suspect most would choose happy.

Randy writes:

Tom,

Okay, I will concede that inequality does cause a measure of happiness, as jealousy is certainly a form of unhappiness.

So which is the more appropriate response?

a. Accept the existance of inequality and responsiblity for one's own actions. Study the methods used by those with more and try to emulate them.

b. Allow the jealousy to persist. Assign responsibility and/or blame for the inequality to those with more, or to society in general.

Personally, I choose option a. But the truth is that option b seems to work for a lot of people. It has resulted in "progressive" taxation which helps them to meet their "needs". Perhaps it even helps them to achieve greater happiness, though it seems to me that the "success" of jealousy results only in the persistance of jealousy.

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