Wednesday, February 24, 2010

If They're Too Stupid

I've been thinking about my post the other day on finance and freedom. I wrote then:
the outrage [against credit card companies] only makes sense if you figure the American people are idiots. These are legal contracts. Not to take this too far, but if American people can't understand their credit card, then is the average American too stupid to enter into any contract?

Since, I've been thinking about this more generally. There are a wide range of issues where the basic working premise is that the American public is ill-equipped to understand the issues at hand. Many lament the transition toward more individually directed retirement plans because people don't have the expertise. Therefore, we ought to create government regulated plans. People are getting fat. So, we ought to ban or tax certain foods. These are just two realms of life where this strain of reasoning exists. The policy prescriptions in each is often to take away the complex and complicated choices from individuals and through government intervention or regulation to give it to experts. Panels of financial planners and economists would help design national retirement plans or the rules under which plans ought to exist. Panels of doctors and public health experts would sift through the data on what foods are bad for us and what medical procedures are not cost effective and make the difficult and complex decisions for us.

And this all makes some sense. The American public in survey after survey is astonishingly ignorant of many financial and medical facts. But there's an exception to this shift toward experts.

Survey after survey and study after study demonstrate that the American public is largely ignorant of the details of public policy and often basic facts like the three branches of government. Yet, the response is always more voter education. Nobody says, maybe the people are too stupid to vote. Perhaps we ought to lessen our get out the vote drives.

Further, if we shift the complex decisions to technical experts working in or for government, and then the check on this is elections for candidates who articulate public policy recommendations that are just as complicated have we gotten anywhere? To put it simply -- if the American public is too stupid to plan their own retirements' or health care or whathaveyou, then what makes them qualified to determine the better public policy that would do it for them in an election?

Another factor involved is the difficulty in even expressing a policy preference in an election. A vote for a candidate is a vote for a collection of policies, not all of which the voter agrees with.

Accordingly, there is no better way to make me think you are a fucking idiot that to repeat a trope like this:
But, as a lawyer friend, Manuel Wally, put it to me, “When it comes to health it makes sense to involve government, which is accountable to the people, rather than corporations, which are accountable to shareholders.”

This is one of those things that, while simple and true, is almost completely irrelevant to the issue at hand. As usual, I will explain by analogy.

Wal-mart is a corporation motivated by profit maximization. If they institute a policy change that I do not like, then it is very easy for me to shop at Target. Then the policy doesn't apply to me at all and my problem is solved. Quickly and cheaply.

If, however, I have an issue with a city or state ordinance or policy, then I'm pretty much shit out of luck unless I want to move out of the city or state. If I have a problem with the DMV, same deal.

As I mentioned above, my displeasure at some policy cannot clearly be communicated in a vote. Sure, I could write letters and lobby my representatives, but that takes time and effort. It's nowhere near as easy as switching from Wal-Mart to Target.

Now, I will admit that the distinction is not always as clear. Sometimes Wal-Mart is the only store within driving distance. (But store policies are usually national and would be impacted by competition elsewhere.) Sometimes the ability to change which company you are a customer of is constrained.

As Timothy Burke pointed out in a comment a few months ago:
I think this is my big disagreement with libertarians in general, namely, the proposition that the power to coerce resides solely with the state. It may make a difference that the state names everyone as a citizen (or a subject) at birth, that if there is any contract, it is the theoretical 'social contract' that precedes an individual's relationship with a state. You can change citizenship potentially (just like you can not be a customer or not work in a job) but it's very hard in the contemporary global interstate system to be without citizenship (whereas at least notionally you can opt out of market relations almost entirely.)


Whatever the paper differences, in practice, whether a bureaucrat mediating my access to health care is an agent of the federal government or an agent of a large insurance corporation doesn't make that much of a real difference. In either case, that's a person remote from my life who is making decisions that have a huge impact on my life, and my ability to seek redress for those decisions is relatively limited in either case. Being a customer or a citizen amounts to the same thing in this case, because in either instance, I have very few, possibly no, alternatives to living with that relationship and hoping it will work in my favor.

He makes a good point. When your timeframe is short, i.e. you need a medical procedure now, and your ability to change providers is longer in duration or otherwise constrained (i.e. you need to change jobs, lobby human resources to change providers, or limited by existing conditions), then the benefits of private providers are lessened. Both private and government bureaucrats have power over you. However, I'd argue that human resources departments do review the service that their employees are getting from their insurers, and if the insurer sucks they'd change eventually. I'll agree that's cold comfort to somebody who needs a procedure now and is being denied. But I'm not sure that I agree that the nature of the coercion of a government bureaucrat and a insurance bureaucrat are the same then, at least over the long term.

Let me just sum up by saying that there are legitimate reasons, such as pooling risk and market failure, that do make government programs appealing. So, I'm not arguing that government programs have no legitimate basis. I'm simply addressing two common arguments for them -- that the issues are too hard for people to understand and that the government being responsible to the people, in theory, makes it more responsive to the people's preferences.


The Ancient said...

Granted, vast chunks of the public are dumb as rocks. It's always been that way, and it always will. Once upon a time, people moved out a wee bit too far on the frontier. (Tomahawk time for the wife and kids.) Or they took their wagons on a shortcut they hadn't sufficiently researched. (Have you got salt for that femur?) Or they took stock-tips from shoeshine boys. (Welcome to 1929.)

As tempting as it is to see this as a useful winnowing process, most people are too sentimental (or compassionate, or committed to "social justice," or compulsively meddlesome -- call it what you will) to resist arguing for some sort of public protection against catastrophic outcomes for large numbers of people. (Curiously, this does not extend to children confined to inner-city public schools, but that's another topic.)

I have always felt that large-scale public programs, if they are to be successful, need to be simple, and involve the smallest possible amount of bureaucratic discretion in day-to-day administration. The Obama administration feels otherwise on nearly every front - financial regulation, health care, environmental protection, etc.

It's as if no one had learned anything since the days of Herbert Croly.

George Pal said...

People too stupid (or simply uneducated) to navigate deeper waters were nevertheless instructed (once upon a time); given a rudimentary education in virtues and graces. So an inability in even ordinary circumstances, for example finances, was remedied, to a certain degree, by espousing the virtue of thrift. Were such instruction still available the stupid would at least have a basis upon which to make decisions – the thrifty candidate being someone the simple man who knew at least the value of thrift could get behind.

And apropos of stupid: there’s stupid and there’s too stupid to be allowed an opinion..

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