Bryan Caplan  

The Wittman-Caplan Debate

PRINT
Thoughts on September 13... Order and Disorder...

wdebate.jpg

If you attended my debate with Donald Wittman, or wish you could have, here are some additional links, including the full text of my opening statement.

I continue to be surprised by how much Wittman has moved away from the rational expectations assumption that he wielded so vigorously in The Myth of Democratic Failure.

His book relied heavily on the hypothesis I've spent years debunking - that non-economists have the same average beliefs as economists. In the debate, Wittman switched to a much lower standard. Now, he's satisfied if a majority of economists and a majority of non-economists fail to take opposite positions.

Thus, to take a reductio ad absurdum, suppose a survey asks whether destroying all of our food would a "major problem," "minor problem," or "not a problem" for the economy. 100% of economists say "major problem." In contrast, 51% of non-economists say "minor problem," and the rest say "not a problem." Wittman would call that an example of agreement, because a majority of both groups admits that the elimination of all food is a problem!

I'm gratified that Wittman has backed away from his original, empirically discredited position. At the same time, however, he seems to have forgotten that his original position was one of the key assumptions he used to defend the efficiency of democracy. He can't consistently tone down his assumptions without toning down his conclusions.


Comments and Sharing





COMMENTS (12 to date)
John writes:

I'm sure someone taped the debate. You should make it available...in audio form at least...online.

Stan Tsirulnikov writes:

John,
The Economics Society taped the event and I think they plan on posting it on their blog:
http://gmueconsociety.blogspot.com/
or on youtube.
I was at the debate and IMO Caplan won, hands down. Wittman did not appear very comfortable arguing against Caplan's thesis that economists' and non-economists' views on a host of economics issues differed in statistically significant ways. They way in which he manipulated the statistics to prove his point was pretty transparent and I think he knew it.
In the end, Wittman did admit that non-economists have what he called "biases" on things like immigration, but he still claimed that democracy would be economically efficient. To me, it appeared like a total concession to Caplan, but maybe the other posters will show me where I am wrong on that point.
All in all, this was a great event and the Economics Society should be congratulated. (Caplan and Wittman also deserve a lot of thanks for agreeing to participate.)

John writes:

Thanks for the tip, Stan. I'll be looking for it!

I figured Caplan would win. The counter arguments to his thesis that I've read have been very very very weak and need to dwell on sideshow aspects of his book to make a still very weak point.

TGGP writes:

Bryan, the page you link to has a broken link. "Second Reply to Caplan" from Wittman has the same URL as your "Rejoinder to Wittman".

ATMG writes:

But one has to admit that either argument is not sexy. Saying `OK. Democracy fails (or succeed) becuase voters are irrational (or rational)' does not tell much and is not so new. Ironically, the logic of both arguments is pretty much same. They are just mirror images. The debate is about their assumptions rather than their logics.

What would be more appealing is something like voters are irrational but democracy still succeed. For example, this is what the work of V. Smith, Shleifer, etc makes more sexy. `Stock buyers do not have much information, but the stock price approaches the equilibrium pretty quickly. Politicians are angel-like, but they leads to wrong policy.'

My response for either argument of Caplan and Whitman is `Duh, what took you so long to find out that a system fails when agents within the system are stupid.'

Then some people will argue that Caplan's is different because his argument is from the rational irrationality concept. Then I do not see how he differs so much from Beckerian approach. For instance, take Becker's rational addiction theory, and change addiction with irrationality. What is so new about Caplan's rational irrationality? What Becker called rational is how people makes rational choice about becoming an addict. What Caplan called irrational is how people makes rational choice about having irrationality. In other words, they are same, but Caplan is trying to sell that his is different from Becker's.

What would be more appealing is that why would a person keeps iirationality even in a long run. OK. The cost of having irrationality may be small at a point of time (just like Caplan's work) but I doubt that it is as small as he argues if one considers the lifetime cost. So the right question should be why would a person keeps his irrationality even with high cost associated with it. And this question deserves an answer from Caplan. Only if I can be convinced by Caplan's explanation, I will buy his book.

TGGP writes:

ATMG, I don't think you know what you're talking about.

Speaking of the functionality of systems full of idiots, a great Catallarchy post "What Does the Free-Market Require" discusses how a lot of economic laws still apply if homo economicus is a brain-dead automaton.

I'd like to add that my guess is that political systems are not especially competitive (the government is worse than a monopoly in that you can't abstain from it and new parties pop up much less frequently than new companies) and government is designed to operate through political rights rather than property rights which would make transaction costs quite difficult to overcome. If Caplan is right that may be a good thing, but I still need to read Wittman's book before agreeing with him on the other assumptions. It won't be until after Caplan's though!

ATMG writes:

TGGP. I am not sure if I do not know what I am talking about. But given that TGGP does not answer my questions, I take it as TGGP even know less about the subject.

That post TGGP refers to sounds like a great post. It sounds like a great posts becuase it is about lots of economic laws still apply even with agents with no brain. But that is what I was exactly talking about. What Caplan is saying is that people are irrational (just like sheep in his book cover) and democracy fails, and that is exactly opposite result of what TGGP says about the system with no brainers. If Caplan says people are irrational and democracy still succeeds, then I will be more interested in his work because it is sexy (just like the title of the post TGGP refers to is sexy).

That was all I was saying. Not much more. Tell me exactly why I am wrong about Caplan's argument instead of just saying you think I am wrong. Also if want to say that I am wrong because Caplan is assuming people are rational but still consume irrationality because the cost is low, then please read what I said later in previous post. Then what Caplan is saying is exactly same as what Becker is talking about. Then should I take Caplan as a member of Chicago political economy tradition? Where does Whitman belong to then?

Nacim writes:

Apparently, Wittman claimed after the debate that he was uncomfortable being shoehorned into the position of defending democracy. That seems like a bizarre statement to make considering his previous work. I also did not, at all, understand his response to the question I posed him after the conclusion of the debate. He claimed that economists favor freer immigration not because they are more educated, but in order to save face in front of other economists. That's circular logic if I've ever seen it.

TGGP writes:

I said you didn't know what you were talking about because you think they aren't saying anything new. Caplan's "rational irrationality" and his explanation of democracy failing based because of voter irrationality is new. The idea of "rational ignorance" is old, but Wittman showed it does not result in democracy failing. Wittman used neoclassical methods to show that democracy does not fail in the way that Public Choice economists had claimed, by ignoring the wishes of voters in favor of special interests. Caplan says democracy fails BECAUSE it does what the voters say. You say `Duh, what took you so long to find out that a system fails when agents within the system are stupid.', but I responded that isn't necessarily true as the Catallarchy post showed and Wittman did when he assumed people were ignorant but rational. Caplan explains why democracy but not the marketplace is prone to failure by showing that voters are not randomly but systematically wrong on various issues and providing a theory to explain why their beliefs on certain issues are rational when they otherwise seem competent in many ways. I don't think you are very familiar with Public Choice, rational expecations, behavioral economics or Wittman's and Caplan's writings on the subject. An overview of the history of government failure arguments from an Austrian perspective can be found here, and Caplan links to a page with papers from him and Wittman.

If Caplan says people are irrational and democracy still succeeds, then I will be more interested in his work because it is sexy
Shouldn't the more important issue be whether what he is saying is true?

What would be more appealing is that why would a person keeps iirationality even in a long run. OK. The cost of having irrationality may be small at a point of time (just like Caplan's work) but I doubt that it is as small as he argues if one considers the lifetime cost. So the right question should be why would a person keeps his irrationality even with high cost associated with it. And this question deserves an answer from Caplan. Only if I can be convinced by Caplan's explanation, I will buy his book.
Democracy is a commons. Political rationality is a public good, and as a result will be undersupplied. The probability that any given vote will affect the outcome of an election is roughly zero so the individual faces no incentive to be rational in the voting booth. The problem is that the costs are shared by everyone, regardless of whether or not you are rational. The marginal cost of a vote is nothing but in the aggregate all the votes make the populace worse off.

Bryan Caplan writes:
TGGP writes:

Bryan, the page you link to has a broken link. "Second Reply to Caplan" from Wittman has the same URL as your "Rejoinder to Wittman".

Fixed it! Thanks.
asg writes:

Only if I can be convinced by Caplan's explanation, I will buy his book.

Isn't it a little odd to insist that one be convinced of an argument before actually engaging it in its strongest form?

Sam writes:

Will we see a point by point response to Dr. Block's review of your book Dr. Caplan? It is quite devastating and your readers deserve it.

http://www.lewrockwell.com/block/block84.html

Comments for this entry have been closed
Return to top