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The real problem with democracy is Parkinson's law of triviality, otherwise known as BikeShedding. Every executive on the board knows what color they want to paint the office bike shed. They argue about it for hours. How to build the plant or do something complicated is left to overpaid consultants or specialists who are given the hands-off treatment.

Same thing with legislation. Take an issue like gay marriage. Everyone can understand it at some level, so everyone has an opinion on it and it becomes a popular subject to talk about when discussing politics.

Now take something like financial regulation. The future of the country is riding on it, but it's too complicated for most people and thus people fall asleep after 5 minutes of talking about it, so it's handed off to specialists and consultants who work for the finance industry.

Totally right - the other astonishing thing is just how cheaply regulators and congress can be bought. A congressional race costs between 1-5 million for all but the most expensive media markets. That's all they need to raise, total. If you're a multi-billion industry player, what's a few million to set up a PAC? It's nothing, compared to the return you get. Run a few ads claiming that the non-bought person in the race is going to restrict your freedom or let terrorists into the country or some bombastic nonsense. Huge ROI.

I don't think that's true at all. Not knowing much about economics does not cause people to have less strongly held opinions on it, it often causes them to have more. There are millions of people who don't even understand basic economic concepts who are vehemently opposed or in favor of government bailouts.

I think mostly its because of ideological difference (small government, national debt, non-republican government) over actual rational opinion on economics (This is not to say I support or disapprove of the bailout).

If this was a non-ideological/political position we would be having a civil war over bushes spending during his term.

The thing that discourages me about financial regulation is that it's going to be a huge, unreadable bill, written mostly by lobbyists, which disproportionately burdens small businesses and outlaws anything innovative, thereby eliminating competition and reinforcing the corporate oligarchy that exists.

So is deregulation the answer?

Well, no. When deregulation gets done, the bills are written mostly by lobbyists. The big corporations identify a few of their pain points and we happily eliminate those regulations, but we never worry about the things that are most burdensome to small businesses or the regulations that prohibit new companies from starting up at all. So deregulation tends to strengthen existing companies and reinforce the corporate oligarchy that already exists.

Basically, for the market to work better we need to increase competition, but Congress will never have any incentive to encourage increased competition. That proposition would pit the lobbying dollars of every existing company in an industry against the interests of companies that haven't been formed yet.

In an effort to defuse any potential flames that may arise from a hot-button issue like gay marriage let me replace your example with "social issues".

You argue that financial regulation is important (and it is) but the problem with your statement is that the economy is all-important. I'm not going to argue that it isn't, rather I am merely goung to point out that people have very different ideas about what government is for.

For some there are many social issues that Are important to society as a whole. One could argue that freedom of religion is an unproductive distraction.

One can argue that we shouldn't legislate morality, which many clearly try to do, but we do that in many ways. Theft, murder, etc are all morality when it comes down to it.

If you approach democracy by saying "these people are irrational because issue X doesn't matter to the economy" you're not making any useful observation. In fact, it's a bit like arguing that the problem with democracy is that you don't get the outcome you want.

To put hard numbers to it:

Suppose your personal stake in a presidential election is $50,000 (e.g., you make $500k/year, and Candidate 1 will raise or lower your taxes by 2.5%/year.) Your odds of swinging the election with your vote are 1 in 100 million (assuming 100 million voters).

Your expected gain from voting is $0.0005. Therefore, you will not rationally be willing to spend more than $0.0005 determining which candidate is best. Further, you might deliberately vote for the wrong candidate for expressive reasons. I.e., if you assign $0.25 worth of utility to supporting the guy you want to share a beer with [1], or to proving you aren't racist, you will vote for the worse candidate.

[1] Because the stakes are so low, most people didn't even bother learning that this candidate doesn't drink. That would take more than $0.25 worth of effort.

Maybe I'm looking at this analogy too hard, but ...

If I actually did have $50k riding on the election, I'd spend more than $0.0005 cents determining which candidate is best, because assessing risk is necessary to plan for the future.

Fine, but this doesn't change the main point. Even if you figured it was worth your time to determine the effect of each candidate on your future, it still wouldn't compel you to vote for the candidate which helps you most; the expected value would still only be a tiny fraction of a penny, and you'd be better off using your vote to signal allegiance, assuage your conscience, etc.

...unless you are alturistic, and you value the impact on the other 300 million citizens (and the rest of the world). Then it can make sense to vote for who you think is best.

I think assuming that the only value you derive from voting being tax rate is the major flaw here.

Altruistic value is usually very high in the issues that people seem to vote based on: gay marriage, government health care, military operations, etc. Many people do value these things much higher than their tax rate.

The problem arises when we treat dollars as the unit of value. Value is not possible to practically quantify, and using money as the common denominator pushes things that actually are money to the fore, and fails to expose the things that do matter to people.

I discussed a tax increase simply because it made things simple, but you can assign a dollar value to any of the items you've mentioned. How much would you, personally, pay to legalize gay marriage?

$50,000? If so, repeat my calculation. $100,000? If so, then voting is worth $0.001 to you. $100 million? Then voting is actually worth $1 to you.

A much simpler explanation of voting behavior is the expressive value of voting. People devote great effort to cheering for their team and signalling allegiance - just look at sales of $50 Yankees pinstripes or $80 Paquiao jackets. Most people don't wait in line for 10 minutes just to donate $1 to a good cause.

What I'm saying, though, is putting a dollar figure on things like gay marriage is disingenuous. We have this conception that "value" automatically means that it can be put in terms of money.

Money has value, and events like law changes have value. However, both money and events have wildly varying value to different people. What a dollar is worth to me is different than what a dollar is worth to you, and indeed, what the millionth dollar is worth to me is far different than what the first one is.

The problem is this assumption that money is an appropriate expression of value. This is what I reject. It is an abstraction parallel to the bundles of mortgages that American banks were brought down by - putting it into a unit the MBAs and politicians can understand meant losing essentially all the meaning of what was bought and sold, and ignored fundamental fallacies in assumptions made.

Or, like most people, you're not a rational machine.

The future that costs you $50,000 (or helps/hurts you via any of the mentioned surrogate currencies) is distasteful. Your irrational brain won't let you do nothing, and makes you go out and cast your vote, even though you may understand that it's a waste of time.

Alternative theory: Risk.

Highly publicized close elections create a scenario that looms large in your mind: The Bad Guy wins by one vote. (Or just a few). You would never forgive yourself. Even though you know it to be fantastically unlikely, you aren't willing to risk it.

/me doesn't vote.

Aren't you assuming that all you can do to protect your 50k is vote? And that all votes are independent? What if you could spend 25k mobilizing your side in the election? Or running an issue ad? You gain it all back and then some.

Still seems like a low return on investment, especially when you multiply by the risk of failure. Yes you can increase your investment and reduce the risk, but the ceiling on gains make this unappetizing.

Taleb's talked about chasing activities where the black swans are positive: http://akkartik.name/blog/9400292

On the contrary, you currently get far more leverage out of your money by participating in the (US) political system and flashing cash than you do by apathy. And the more money you spend, the less risk there is.

Why is there no net neutrality bill? The rich are overrepresented in our system for a reason. Sad but true.

Your odds of swinging the election with your vote are 1 in 100 million

This assumption doesn't make sense

For a presidential election, you think this estimate is too high?

It makes sense... it's just wrong. The odds that your vote is the last one counted in a 100M vote election is 1 in 100 million.

The odds that the election would be decided by a single vote have not been considered.

The rational voter never votes. At best he spends his effort convincing other people to vote a certain way, persuading others that their vote does indeed count, all the while knowing his own vote doesn't. If he participates at all, he does so as demagogue and charlatan.

There are 100 million votes, one of which decided the election (the N+1'th vote on the winning side, assuming N votes on the losing side).

If you prefer, you can play with binomial distributions to calculate P(side X wins with N votes && side X wins with N-1 votes) [1]. Using the normal approximation and ignoring the normalization prefactor (an overestimate) exp[(n(p-0.5)^2 / 1(np(1-p))] odds of having your vote matter. For p=0.501 (i.e., voters are split 50.1%, 49.9%), that works out to about 10^{-87}. For p=0.51, double floats are incapable of representing a number that small.

I stand by my statement. Your vote doesn't matter.

[1] Conceptually, this is slightly different from computing the odds that you cast the deciding vote, but I realize it is more useful from a decision theoretic perspective.

There's no point in putting it to "hard numbers" if you make terribly impractical guesstimates.

Please explain which of my approximations you believe changes my results significantly.

(By "significantly", I mean "increases the odds of your vote mattering to a number greater than, say, 10^{-86}. )

I can't help you clean up the calculations because the entire premise that the probability of "your vote mattering" times your potential financial gain from one candidate over another gives any reasonable estimate of utility of a vote is absurd.

It doesn't have to be financial gain - it can be altruistic gain from policy choices. As I said in another post, if you personally would be willing to spend $50k to legalize gay marriage (for example), you can replace $50k of financial gain by $50k worth of utility derived from helping others.

It varies by state. [0][1]

[0] http://redbluerichpoor.com/blog/2008/10/what-is-the-probabil...

[1] http://www.stat.columbia.edu/~gelman/research/published/prob...

That's assuming time has constant value.

For example, I consider time I spend reading on the toilet basically worthless. So when the voter guide comes in the mail, with the candidates' statements, text of propositions and submitted arguments for or against, it is less than $0.25 to multitask there.

Expected gain, though, is higher than just the tax cuts and beer-having. It can be fun to study that stuff. And, looking at the big picture, the collapse of our democracy by having an uninformed electorate would mean everyone loses everything that is based on the USD.

Tax liability is not the sole metric of electoral interest.

As Winston Churchill said: "The best argument against democracy is a five-minute conversation with the average voter."

In democracy, the job of the "average voter" is to represent himself. Expecting the "average voter" to have an understanding of issues at the level of the person running for office is a misinterpretation of their role.

What a jerk I would be if I said: "The best argument against industrialization is a five-minute conversation with the average construction worker" or something similar.

Unfortunately "representing yourself" also ends up being "representing how you want others to be mistreated".

Yes, that's inevitable. You can't help take away from others. Even if you're a Jain, sweeping the floor before you to avoid killing insects. Perfection is unattainable, but I dream of a system that takes people's motivations (both selfish and altruistic) into account.

Nice turn of phrase. (Source?)

> Caplan, however, emphasizes that democratic failure does exist and places the blame for it squarely on the general public. He makes special emphasis that politicians are often caught between a rock and a hard place: thanks to advisors, they know what policies would be generally beneficial, but they also know that those policies are not what people want

These three sources of failure (voters, politicians, lobbyists) don't have to be mutually exclusive. I'd say they're all broken, with the real problem resting in the idea that government is upwardly scalable. The inability of most people to understand actions and motivations other than their own (a requisite for computer security) leads them to thinking that affecting larger groups somehow solves more people's problems (while in fact the opposite is true).

I am not sure why people wants to burden the voters with the hard decisions in life.

Nobody in the world knows how to make all parts of the pencil. The graphite have to be mined. Somebody have to make coffee for the miners. Somebody have to truck the graphite to pencil making factory. Somebody have to chop down the wood.

Even programmers specialized. There's somebody who work on deploy tools, and there are some who are trying to make ruby faster.

Voters now have to decide between a wide range of policy stance that they probably don't know anything about. There are foreign policies, economic problems, etc. All of which are subjects that probably required lot of studying to get right. Than, those politicians, as generalist probably don't know these issue as well as they need to, or they are compromised by their own interests.

Programmers, doctors, etc are busy with their own profession trying to keep themselves competitive on the market and make decisions for their own lives. Sometime, they got it wrong.

If a lot of people can't make the right decisions for themselves, why do they expect them to make decisions concerning the leadership of a nation?

Better to have ignorant voters trying to make the decisions in the interests of the country, than a small group of rent-seeking special interests making decisions that benefit themselves to the detriment of the country.

When you're deciding about wars, financial crisies, decimation of the middle class, increasingly extreme wealth distribution, etc., the former probably is the lesser of two evils.

I believe that the main function of voting isn't putting politics in the government, but kicking them from it. "Candidates" is derived from "clean" in Latin. Time will make them dirty, people will end perceiving it and choosing the lesser evil.

The rules that prevent a president from too many reelections are similarly befeficial, and a lot cheaper even if not enough.

Actually, it's meant as "brilliant" or "brilliantly white", since candidates during the elections to public offices in Rome walked around with their different levels of entourage wearing togas that had been whitened to the extreme with chalk.

> But are the voters any better?

The voters have the voters' interests at heart. Businesses have their own interests at heart. But you're right: voters are often stupid, irrational, misinformed, etc.

I'll leave the last word to Churchill: democracy is the worst possible system for running a country, except for all the others.

> democracy is the worst possible system for running a country, except for all the others.

This is one of those chants that everyone keeps repeating for fear of looking at the alternatives, or to excuse the horrors. Keep repeating the chant, and you don't have to take a close look at the problem.

Yea. I agree with Churchill (at least for the correct quote: "It has been said that democracy is the worst form of government except all the others that have been tried."), but I think these glib slogans are non-constructive or worse.

The version of the quote I've heard has "from time to time" at the end of it. With more context:

> Many forms of Government have been tried and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.

I disagree. If you actually look at existing and historical states, those that are democracies generally do better.

I think this depends on what you define as "better". Certainly totalitarian regimes have lower economic growth. But if you measure economic growth as your measure of "better" then it seems that democracy is not as much a determinant as the economic system (eg: the more capitalist the faster the growth, higher the standard of living, the more powerful the central government and thus the more socialist, the lower the standard of living and the slower the growth.)

I wouldn't call China a democracy, but they have given up a lot of central power and are growing fast.

Certainly there are also example of successful societies that have lasted for very long periods of time that are not democracies, such as tribal communities. They don't exhibit significant economic growth, but they also are far less likely to make war, which would be a good candidate for being "Better" (it is bad to lose a generation of men every couple of generations.) Their lower economic growth may also be a result of their lower war making, but their higher standards of living of the populace relative to the overall standard of living, when compared to democracies, argues again for their form of government being superior.

My point being that it is very common for a culture to reinforce in its members a perception that the cultures way of doing things is "right" and that it produces a better outcome-- and it does it in such a way that people presume that this to be a fact, rather than a bias.

Immigration flows (which, indeed, involve people leaving one culture and entering another) do a lot to show that there probably are some genuine advantages to democracy over the other forms of government that have been tried from time to time. So far there isn't any fast-growing dictatorship that has achieved long-term prosperity greater than that of the various democratic countries around the world.

> I think this depends on what you define as "better".

I think by most standards that most people would agree on, democracies come out well.

For example, consider life expectancy -- this is IMO a good measure because nearly everyone wants to be alive, and someone who is alive is (usually) better off than someone who is dead. If you look at countries with the highest life expectancy ( http://en.wikipedia.org/wiki/Life_Expectancy_by_Country ) democracies seem to be over-represented at the top. This is particularly the case if you discount territories that aren't counties (such as Hong Kong).

Of if you go by UN Human Development Index, you get a similar story.

> Certainly there are also example of successful societies that have lasted for very long periods of time that are not democracies, such as tribal communities. They don't exhibit significant economic growth, but they also are far less likely to make war

I'm not sure this is the case. Are you familiar with the high rate of homicide among the Yanomamo?

> My point being that it is very common for a culture to reinforce in its members a perception that the cultures way of doing things is "right" and that it produces a better outcome-- and it does it in such a way that people presume that this to be a fact, rather than a bias.

You're right that this is a cognitive bias we should guard against.

When looking at statistics you must guard against differences in methods and political bias. The UN is not a neutral organization, and life expectancy is not measured in a consistent way (in my understanding.)

At any rate, I believe what you're seeing is the superiority of democracy as a form of tyranny, and I won't dispute that. Most of the comparisons, looking at those statistics are to other forms of tyranny. There are very few free countries, and few people who have been educated to respect human rights enough to take up arms to overthrow their government to defend them. When these people do this, though, as the somalis overthrew their dictator, they are visited by no end of warmaking from these so-called "peaceful" democracies. Somalia has been attacked without provocation by the US and UK many times since throwing off their dictator.

As for the Yanamamo, I'm not familiar with them, but it would be interesting to understand how many of these homicides are murders and how many are instances of the death penalty. (EG: crimes themselves or responses to crimes.) I, of course, can't say.

Other than people have a natural instinct for a form of morality, but this morality can be perverted by culture. (note americans propensity for supporting violence against the innocent in the forms of war and taxes.)

It's remarkable that this quote shows up on nearly every thread where somebody criticizes democracy on a non-specialist website. It's like the creationist assertion that life is too complex to arise by chance. The phrase short-circuits all discussion and protects the wielder from any doubt or any need to reconsider his beliefs.

Many people in history have thought their current way of doing things was pretty nifty and everything that came before was barbarism and idiocy. We have to be a little more open-minded than that to get at true or useful ideas. There is certainly something suboptimal about a government that can't pass a bill smaller than the size of a dictionary, or that in theory and practice protects concentrated interests at the expense of the broader good. I have my doubts that the American state is in a sustainable equilibrium given the astounding irrationality and paralysis of the legislative process.

On specialist websites, people might be familiar with the existence of an entire sub-discipline of economics dedicated to explaining the incentives facing voters and governments (Public Choice) and the historical lessons of hundreds of different governing forms in human history, so the discussion thankfully extends beyond Churchill's quote.

Thanks for mentioning public choice theory. It's an interesting discipline of political science

http://en.wikipedia.org/wiki/Public_choice_theory

that appears to explain some phenomena that are not readily explained on other grounds. Public choice theory was a big part of the content of the course on legislation in the first year of law school, and had much to do with why I don't expect to solve all of my country's problems by passing new laws.

At least the voters are entitled to choose a government and the government should write the laws themselves. Lobbyists have no constitutional basis.

Freedom of speech (for the lobbyists) and freedom of association (for the congresscritters)?