Acknowledgements: I thank conference participants and the volume editor s for advice. This essay borrows some of its ideas from Mackie (2008a, 2008b, forthcoming).
Introduction. An economist would be “embarrassed to be seen at the voting booth” (Dubner and Levitt 2005). Although most citizens vote, the standard view in rational choice theory is that it’s irrational to do so. It’s extremely unlikely that any one vote would break a tie, and when a single vote does not break a tie it does not cause the outcome. Since voting is costly, almost any single vote would be instrumentally irrational. And if it is irrational to vote, it is at least as irrational to know anything about the candidate or issue voted on. “Economists have long argued that voter ignorance is a predictable response to the fact that one vote doesn’t matter. Why study the issues if you can’t change the outcome? Why control your knee-jerk emotional and ideological reactions if you can’t change the outcome” (Caplan 2007, 2). Although many citizens have some political knowledge, the standard view in rational choice theory is that voters are “rationally ignorant.”
I begin this essay by briefly tracing the discourse of the folly of crowds from Plato through LeBon to Schumpeter, who is critical to its establishment in American political science. Postwar survey research revealing the weak knowledge of voters about political facts was explained by Downs with reference to the paradox of nonvoting, the idea that it is irrational for any one material egoist to vote unless he is pivotal to bringing about the outcome. The pivotalist model of voter turnout is misconceived, I argue. In its place I offer what I call the contributory model. First, the empirical evidence is that many voters tend to vote for the general interest, not their own self-interest. Second, many voters are motivated not only by the winning value of voting, being pivotal, but also its mandate value, advancing the tally of one’s side in one election and beyond. Contributing to the advance of a great public good is sufficient to motivate voting for many, I suggest. Unlike the pivotalist model, the contributory model is consistent with two observations. First, many citizens do vote. Second, those voters say in scientific surveys that they vote in order to do their duty and to influence the outcome.
Next, with the contributory model in hand, I challenge the economic model of information acquisition, and the idea of rational ignorance. For economists, the wisdom of crowds does apply, quite nicely, to the marketplace. Some even infer that market actors must be perfectly informed. For many economists, however, the voter is perfectly uninformed, due to rational ignorance. Hence, democratic decision should be minimized and formerly political decisions transferred to the marketplace. I claim that the supposed contrast between consumer knowledge and voter ignorance is theoretical speculation, not empirical fact, and I illustrate with some instances of weak consumer knowledge and strong voter knowledge. The public choice school of thought derives two further analyses from the pivotality account, each damaging to democracy. Brennan and Lomasky accept the pivotalist model of voting, accept the fact that people do vote, and conclude that since voters almost never vote for instrumental reasons, they must vote for expressive reasons: they desire to express a desire. I respond that the contributory model of voting restores primacy to instrumentality in the voting decision, and I dissect a widely cited analogization of voting to cheering and booing at a football game. The expressive theory claims that voters undisciplined by instrumental consequence would express their emotions and that often such expression would be irresponsible and harmful in the aggregate. I comment that the contributory account restores the discipline of consequence to voting. Caplan, following up on Schumpeter, argues that voters are both ignorant and irrational, irrational in that sometimes they hold beliefs they should know to be false, particularly in politics. I respond that his thesis of rational irrationality depends on the pivotalist model of voting, and does not apply should the contributory model of voting be a more accurate description of reality. I also offer an alternative explanation for why a generally rational individual would retain an apparently false belief.
The wisdom of crowds is the idea that the aggregation of the judgments of the less informed many may be as good or better than the judgments of the more informed few or one. In its weaker form the idea is that, if error is randomly distributed, then in the aggregation of multitudinous judgments error cancels out and truth remains. In its stronger form, as in the Condorcet Jury Theorem, if judgments of the many are on average better than random, then aggregation of those judgments approaches truth quickly as the number of independent judgments increases. My guess is that the wisdom of crowds helps make democracy a success, but that its scope and its power are much weaker than indicated by the pure models. However, if error is not random, but biased, or if judgments are on average worse than random, then the wisdom of crowds turns viciously into the folly of crowds. The pivotalist model of voting implies the concept of the rational ignorance of citizens, and rational ignorance underwrites both Brennan’s idea that voters are expressive and hence more emotional than rational, and Caplan’s idea that voters are rationally irrational. If citizens are perfectly ignorant, or, worse, systematically biased, then there can be no wisdom of crowds in a democracy.
From Plato to Downs.In our tradition of political thought, the claim that citizens are woefully ignorant about politics goes back as far as Plato’s aristocratic disgust at the fact that the democratic assembly listens to persons of all ranks and professions without distinction, rather than consulting the noble and the rich as they should (Plato, 1978). It is well-known that in the democratic polity citizens praise insolence, anarchy, extravagance, and shamelessness, why, not only the slaves, but even the dogs and the donkeys there are too full of freedom (Plato 1992, 560e). Although no democrat, Aristotle had friendlier views about the wisdom of crowds. He observed that it is possible (but not necessary) that the many, who are not excellent as individuals, are better when they come together than the few best. True, some crafts are best judged by their few expert practitioners, but others are best judged by their many intended beneficiaries: the guests, for example, are better judges of the feast than the cook. Aristotle’s arguments were repeated and embellished by Marsilius of Padua, among other scholastics; and later by some republicans, including Machiavelli. As cities swelled, industry proliferated, and the liberal democratic state consolidated in the later 19th century, a reactionary panic gripped the upper classes. Mob psychology was generalized by LeBon into a pseudoscientific theory of the crowd. Every individual, including voters in democratic elections and deputies in democratic assemblies, partakes of a normal civilized self, and an abnormal uncivilized self – atavistic, antirational, and dangerous – incarnated by group action. Elsewhere, Lenin knew what had to be done: a revolutionary vanguard must lead the masses, who otherwise would languish in spontaneity. Hitler proposed that truly Germanic democracy requires a leader of genius to take power away from the majority of ignoramuses and incompetents: a hundred empty heads do not make one wise man, he counseled (Hitler 1999, 75-91).
Schumpeter (1942, 256-264) spritzed up with economics LeBon’s wilted theory and transplanted it to American soil. He said that individual will is more definite with respect to consumer choice, because consumers directly experience the consequences of their choices, but is indefinite with respect to democratic choice because voters do not. Individual will is not independent in politics, because it is mostly formed by the propaganda of leaders and their parties, again because of no relation between voter choice and consequence.
Every parliament, every committee, every council of war composed of a dozen generals in their sixties, displays, in however mild a form, some of those features that stand out so glaringly in the case of the rabble, in particular a reduced sense of responsibility, a lower level of energy of thought and greater sensitiveness to nonlogical influences….Newspaper readers, radio audiences, members of a party even if not physically gathered together are terribly easy to work up into a psychological crowd and into a state of frenzy. (257)
Schumpeter holds that the judgment of a qualified leader is generally better than the pooled judgment of lesser beings, which is one reason why he so emphasizes individual leadership.
Another sort of irrationality is exemplified by advertising, which relies on repetition and association of the targeted product with basic needs such as sex and social approval. There is a check on commercial advertising, says Schumpeter, in that the consumer accumulates favorable and unfavorable experiences with products, improving evaluation. Thus, he is rational about “most of the decisions of daily life that lie within the little field which the individual citizen’s mind encompasses with a full sense of its reality….the things which are familiar to him independently of what his newspaper tells him” (258-259). Individual will might be definite and genuine with respect to local politics, or with respect to “many national issues that concern individuals and groups . . . directly and unmistakably” (260), but less so than within the familiar field.
Otherwise, with respect to national and international affairs unlinked to personal concerns the sense of reality is . . . completely lost. . . . the great political questions take their place in the psychic economy of the typical citizen with those leisure-hour interests that have not attained the rank of hobbies. . . . One has one’s phrases, of course, and one’s wishes and daydreams and grumbles; especially one has one’s likes and dislikes. (261)
There are two further ominous consequences, he says. First, in political matters the typical citizen would yield to extra-rational or irrational prejudice and impulse, and relax his usual moral standards. Second, the absence of the rationalizing influence of experience and responsibility in political affairs means that the typical citizen is vulnerable to advertising by groups with an ax to grind, and “they are able to fashion, and within very wide limits, even to create the will of the people. . . . we are confronted with . . . not a genuine but a manufactured will” (263). Unlike the consumer, the citizen does not accumulate favorable and unfavorable experiences with political products.
Survey research in the 1950s by political scientists associated with the University of Michigan found that citizens are variably informed, and that many know little about the less obvious facts of politics (Campbell et al., 1960, although Bryce 1995/1889 reported the same finding 60 years earlier, and with a more charitable and astute interpretation, in my view). In the same tradition, Converse (1964) claimed to find little understanding of ideology in the electorate (but his data are suspect, see Popkin 2006).
The paradox of nonvoting was first stated by Downs (1957, 244-246), and is often formulated as follows. B is the individual’s Benefit from a winning election outcome, C is the Cost of the individual voting, and p is the Probability that an individual’s vote is pivotal in causing the winning election outcome. An individual would vote then, when pB – C > 0. The probability of being pivotal, however, is minuscule, effectively zero; for any individual, the act of voting is all cost and almost no benefit, and hence no one should vote. Downs (1957, 244-246, 266-271) premised rational ignorance directly upon the paradox of nonvoting (298): if one has no incentive to cast a costly vote, one has no incentive to gather costly political information. Deductive theory’s necessity claim seemed to explain the data indicating the absence of knowledge.
The Paradox of Nonvoting.Elsewhere, in response to the alleged paradox of nonvoting, I more fully develop a contributory theory of voting (Mackie 2008b). Its argument can be summarized with a simple example. Suppose, reasonably, that one likes playing basketball for the sake of winning, winning by the largest margin, and losing by the smallest margin. The paradox, however, insists that only winning counts, and thus it would be irrational to play on the team if one expected to lose or if to win by more than one point. Past responses to the paradox say: Who cares about the score? It’s stupid to play, or one is paid to play, or it’s one’s duty to play. Or one expresses a desire for victory in play.
The paradox of nonvoting assumes that voters value only the winning of an election. Their utility function would look like this.
From the diagram, it can be seen that unless one’s additional vote pivotally causes the outcome, it is of no marginal value. It would be futile or redundant. If 39 voters out of 100 vote for a cause, a 40th vote for the cause changes nothing. If 51 out of 100 vote for a cause, a 52nd vote for the cause changes nothing. The claim that voting is irrational often confounds two logically independent claims: redundancy and imperceptibility.
It’s likely that many voters value both winning, and how much their cause wins or loses by, the latter termed the mandate value of voting. Their utility functions would look like this .
Each voter’s contribution is pivotal to the mandate value. None is futile or redundant. If 39 out of 100 votes for a cause, a 40th advances its mandate value. If 52 out of a 100 vote for a cause, a 53rd advances the mandate value. In mass democratic election between two major parties, for example, a large mandate for the left party in the last election would in the present term of office shift their governing policies left and assuming no change among voters shift the policies of both parties left in the next election (Fowler and Smirnov 2007). Now the objection is that a voter’s contribution is, not redundant, but imperceptible. Before addressing the imperceptibility objection, consider that voters are mostly oriented to the public interest rather than to simple self-interest (see Mackie 2008b and references therein) Voters are most strongly motivated by duty and by desire to influence the social outcome (see Mackie 2008b and references therein).
The American Citizen Participation Study, for example, asked an instructive series of questions about citizens’ motivations to vote. Prosocial motivation dominates: half the respondents said at least one particular problem motivated them to vote, and for 9% of them myself, family, or others were affected by the problem, for 46% all the community was affected, and for 45% all the nation was affected. Most intend to influence the outcome: 97% say the chance to make the community or nation a better place to live is somewhat or very important, 91% say the chance to influence public policy is somewhat or very important, 65% say that furtherance of party goals is somewhat or very important, 22% say that getting help from an official on a family problem is somewhat or very important. Most are morally motivated to vote: 96% say that my duty as a citizen is somewhat or very important, 86% that to do my share is somewhat or very important. Given that so many voters name both influence and duty, someone who says that she has a duty to vote likely means that she has the consequentialist duty to advance the public good, that is, she is instrumentally motivated. Side payments for voting are not very important: 71% say so about obtaining recognition from people I respect, 88% about not wanting to say no to someone who asked. Finally, few vote because they find it exciting to do so.
Table 1. Self-Reported Reasons to Vote
Reasons People Give Us for Voting
% Not Very
Chance to Make Community or Nation a Better Place to Live
Source: American Citizen Participation Study, 1990
These responses are consistent with the contributory theory. Label the number of citizens N, the number of voters for one of the causes n, a voters’ contribution to that cause roughly 1/n, and her discounting of benefit to any other individual α (0 < α < 1), and a citizen will vote when 1/n (Bself + αNBsociety) – C > 0 (adapted from Edlin, Gelman, Kaplan 2007). The term for benefit to self, Bself, is small compared to the term for benefit to society, Bsociety, and, when each is multiplied by 1/n contribution, benefit to self usually goes to almost nothing, leaving benefit to society as the principal motivation for voting. If so, then, just as deliberation may operate as a filter to exclude unjustifiable preferences, voting may operate as a filter to exclude self interest and include public interest as input to collective decisions.
Is an “imperceptible” contribution to the benefit of society irrational (Olson 1971, 64), even if the benefit exceeds the cost of the contribution? Parfit (1994, 75-82) argues that it is mistaken to ignore imperceptible harms and benefits, and I do not know of reasons to reject his arguments. Suppose Fatima wants to become a champion gymnast. Her friends correctly tell her that any one day of practice only imperceptibly advances her towards that goal, but incorrectly tell her that for that reason she should skip every practice. My contribution of $25 is imperceptible in comparison to UNICEF’s 100 million dollar budget, but its comparative smallness does not reduce its value from $25 to $0. Empirical studies show that actual humans do strongly contribute to low-cost continuous public goods (Pellikaan and van der Veen 2002, Frey and Meier 2004) Voting in an election is more vivid in process and result than for many other such public goods, and voter turnout is high in developed democracies (the U.S. and Switzerland are exceptionally low).
Rational Ignorance.Downs (1957, 244-246, 266-271) premised rational ignorance directly upon the paradox of nonvoting (298): if one has no incentive to cast a costly vote, one also has no incentive to gather costly political information. Downs recognizes “future-oriented” voting (49), what I have called its mandate value. He also assumes that citizens are motivated to pursue any economic or political goal, not only egoistic ones (6, 37). These two points are compatible with the contributory account. Yet Downs lapses into egoistic logic in concluding rational ignorance (“it is individually irrational to be well-informed,” 246). Having to explain the fact of robust turnout, he then retreats, stating that “Rational men in a democracy are motivated to some extent by a sense of social responsibility relatively independent of their own short-run gains and losses” (267), because collapse of the democracy due to regular nonvoting would be catastrophic. In a final implausible pirouette (269-271), he adds that nonetheless citizens (excepting those lobbyists who happen to have the opportunity to pivotally influence policy) would be irrational to acquire political information (298). If all voters were necessarily ignorant, then elected officials would be unconstrained and there would be no democratic accountability and catastrophe would follow. Downs’ ad hoc explanation for voter turnout should also predict rational knowledge of politics, not rational ignorance.
The pivotal voter model has difficulty explaining why voters turn out in large numbers, and its companion, rational ignorance, I shall argue, has difficulty explaining why voters seem to be about as well-informed as consumers.
Do Voters Know Enough to Make Good Decisions? If there’s one thing that many people know about political science, it’s that citizens are woefully uninformed about politics. We are hearing a lot about the topic these days. Bryan Caplan (2007) exposes The Myth of the Rational Voter: Why Democracies Choose Bad Policies, Rick Shenkman (2008) asks Just How Stupid are We? Facing the Truth About the American Voter, Ilya Somin (forthcoming) examines Democracy and the Problem of Political Ignorance. These authors (each affiliated with George Mason University) emphatically relate many poignant instances of citizen ignorance. Caplan and Somin are libertarians who believe it would be beneficial to reduce the scope of democratic government in favor of market exchange. Majority agreement or disagreement has nothing to do with the truth and rightness of libertarian claims, which should be evaluated directly on their merits. Libertarians though, like Marxists of yore with their concept of false consciousness, need a theory about why the majority of fail to accept their doctrines, and the ignorance and irrationality of the democratic voter is one such theory.
Empirical findings about the imperfection of knowledge in actual democratic politics are compared to theoretical assumptions about perfection of knowledge in idealized market exchange. Neoclassical economics, for modeling convenience, assumes that humans are perfectly informed. That is the default, and sometimes one or another departure from perfect information is modeled. One hopes it is true that everyone understands that perfect information is a modeling assumption and not a fact. The efficient markets hypothesis further holds that prices of traded items accurately reflect all publicly known information at all times. Although the market must be somewhat efficient, crashes and bubbles suggest that it is not entirely so: people do engage in herding behavior (Shiller 2005), for example, copying one’s neighbor who has big paper gains on his house by taking out an interest-only adjustable rate mortgage to speculate on a home purchase, or a pension fund buying opaque mortgage-backed securities only because other pension funds do so. Citizens do tend to lack encyclopedic discursive information about politics in the survey setting, an observation which has prompted several programs of research in political science.
What does democratic theory expect of citizens? Schumpeter invented a classical doctrine of democracy, attributing it to the utilitarians, which supposedly assumed that democracy requires a fully informed citizenry (Mackie, forthcoming). However, John Stuart Mill, the intellectual avatar of liberal democracy, worried considerably about the ignorance and incapacity of the citizens (and of any other controlling body in a government). That is why he wrote in 1861 that “it is essential to representative government that the practical supremacy in the state should reside in the representatives of the people” (1977, 423), that those representatives should depend on an expert bureaucracy for advice, and that the citizenry should become better educated both by publicly-funded education and by civic participation. James Bryce (1995, chs. 76-87), another influential early theorist of representative democracy, in his 1888 study of the American regime, provided quite a realistic account of how a weakly informed general population could nevertheless control its representatives for the benefit of all. Althaus (2006) details how modern democratic thought generally has not demanded a highly informed citizenry.
Humans lack perfect information about all aspects of their lives. Any individual faces a hard-biting constraint on knowledge acquisition: a limited number of hours in a day and in a lifetime, not to mention foregone opportunities. People begin from complete ignorance, not from complete knowledge, and use a variety of devices to approximate competence. To buy a car one does not need to know who is in charge of the Chevrolet division or the Corolla division, or to know how the firms make their decisions. One compares the final products, and then not as zealously as would a geeky academic, but with reference to easily obtained information from advertising, personal experience, word of mouth, and scattered bits of expert opinion. Voters don’t need to know how the government kitchen is organized. They each can, like the guests at Aristotle’s feast, judge whether they have more or less liberty, safety, peace, and prosperity since the last election, and switch chefs when meals worsen. There is one thing that each of them does know well, how government policy affects her life, and the aggregation of those judgments is more authoritative than the judgment of any panel of expert chefs. Enns and Kellstedt (2008) provide evidence to support the view that “even the least politically sophisticated segment of society receives messages about the economy and uses this information to update attitudes about political issues.”
The low-information rationality school of political cognition holds that humans are cognitive misers who use quick heuristics, information shortcuts, to make decisions (Lupia, McCubbins, and Popkin 2000 is slightly dated but an excellent introduction which contains contrary views). Lupia and McCubbins (1998) study in depth whether citizens can learn what they need to know. They distinguish information, the abyss of possible facts, from knowledge, the ability to make accurate predictions. More information is not necessarily better in order to make a better prediction, and, given budget constraints, usually would cost more than it’s worth. For voters to make a reasoned choice requires sufficient knowledge, not the Wikipedia of information tested in survey research and retailed in stories about how stupid voters are.
The ignorance finding is due to uncharitable research design in some cases. Gibson and Caldeira (2007) mention that an open-ended question in the 2000 American National Election Study asked who William Rehnquist is, and only coded as correct the answer Chief Justice of the Supreme Court (when in fact his official title is Chief Justice of the United States, with the result that 10.1% gave a “correct” answer. They found that 72% of answers coded as incorrect (excluding don’t-know answers) were in fact nearly correct. A conventional survey takes a respondent by surprise, asking for an immediate answer to a question the respondent is unlikely to have recently considered. Prior and Lupia (2005) gave respondents a dollar for a correct answer, 24 hours to answer the questions, or both, and correctness increased by 11 to 24%.
The miracle of aggregation, in the thinner sense that aggregate public opinion and voting about broad and important issues changes sensibly in response to events and to changing government policies, and that government in turn responds to changing opinions and votes of the citizens, is well supported. Page and Shapiro (1992) survey the policy preferences of Americans from the 1930s to 1990. They conclude that aggregated American opinions on public policies are rational, in the sense that they are stable, coherent, and make sense in terms of underlying values and available information. Most importantly for the argument here, public opinions change in understandable and predictable ways in response to changing events, and opinion changes are sensible adjustments to new information and conditions. Examples are rife. World War Two increased support for military spending, wage and price controls, long working days, high taxes, and prohibition of strikes, and the end of the war increased support for reversal of those policies (332). And so on. Wlezien’s (1995; Soroka and Wlezien 2004; 2005) thermostatic model is supported by evidence that the public responds to certain general categories of public expenditure. When the level of policy is more than the public prefers, the public favors less, and when the level of policy is less than the public prefers, the public favors more. In turn, budgetary decisions follow public preferences. Erikson, MacKuen, and Stimson’s (2002) sophisticated and richly detailed analyses argue that election results are influenced by Macropartisanship, roughly, accountability for past economic and other government performance, and by Public Mood, roughly, the public’s demand for future policy change. They also argue that public opinion responds to policy (342-351), not at the individual level, but “when we turn to aggregates, the nation as a whole, the public does react (and react appropriately) to policy making by the national government” (351).
Is the Marginal Costs Model of Information Acquisition Plausible? The economic theory of knowledge acquisition holds that an individual seeks new information up to the point where the marginal cost of new information equals its marginal benefit. The proposition has always had a whiff of paradox about it, or confusion perhaps. Since the individual by definition lacks information concerning a possible decision, how could she know what unknown information is worthwhile to obtain and what not? By its market price? The more it costs the more it is worth having? That means that the purchaser has perfect information that the seller of the information is trustworthy, that unknown information is exactly relevant to the decision problem at hand, and that it is worth as least as much as it costs. Maybe that describes buying an issue of the U.S. monthly magazine Consumer Reports containing vehicle reliability reports, but sadly most ignorance is not so easily tamed. What if the information is not for sale on the market, but must be discovered directly by the individual? Would the effort and opportunity cost of obtaining the information measure its worth? No: suppose the person studies astrology for a month to learn better how to assess the reliability of alternative automobile purchases. Studying astrology for two months wouldn’t make the decision better. Consider: how is it that I know that astrology wouldn’t help? Did I test that belief in an experiment? Can I cite any experiment carried out by others on the question? I shall return to this point.
The marginal costs model assumes that an individual otherwise has perfect information, or, somehow, sufficient information, to calculate the acquisition decision. It applies now and then, here and there, but it could never be a general model of information acquisition. Assume a person with no information. How does she proceed? She doesn’t know whether it is worth having any kind of knowledge; she does not know the truth or falsity of any possible belief, maybe she doesn’t even know that she has desires. The marginal costs model is necessarily parasitic on some other more general theory of learning and knowledge. The model does not warrant any sweeping, or even any modestly general, account of knowledge acquisition, not by homo sapiens, not by homo economicus, and not by homo democraticus.
The pivotalist model and the marginal costs model together imply that acquisition of political knowledge is almost never instrumentally beneficial. Some instrumentally valuable political knowledge comes at no effort or opportunity cost, what Downs (1957, 221) called the free information system. It is acquired incidentally in pursuit of some other purpose, for example, watching an entertaining television show exposes one to a political advertisement. Other than paid advertisement, or accidental personal encounters with lobbyists, however, no other incidental knowledge would appear, I infer. The idea that at a poker game one learns about a political candidate, or that there is a frequency of political buttons among one’s friends, depends on the presence of contributory actors, whose existence the pivotalist would deny. In contrast, a contributory voter or activist would be instrumentally motivated to obtain political knowledge, up to a point.
Much knowledge acquisition is intrinsically beneficial, a pleasure in itself to discover, whether it’s knowledge of wars and elections, baseball stats, Pokemon trading cards, geography and history, wedding planning, daily news, child development, handgun types, and so on. Surely individuals vary in the extent of their overall level of curiosity, and the targets of their curiosity vary even more, but a thirst for knowledge is ordinarily part of the human experience. The interest emotion motivates exploration and learning, globally and locally (Silvia 2008). It is generally adaptive, because a creature lacking perfect information does not know whether the unknown is harmful and to be further avoided or whether the unknown is helpful and to be further pursued. To speculate, it may, like other positive emotions, be evolutionarily adaptive: negative emotions such as fear motivate avoidance of threat, but positive emotions such as interest function during times when individuals are able to consolidate and expand their resources. Interest, which motivates people to try new things, people, places, and experiences, is distinct from happiness, which motivates attachment to what is known to be enjoyable. (Gallagher and Lopez 2007, Silvia 2008)
Caplan (2007, 120-121) considers history, philosophy, religion, astronomy, geology, politics, and the like to be impractical knowledge. Erring in any of these disciplines is costless, except maybe for the social consequences of being thought ignorant by others. Practical knowledge involves getting out of bed, driving to work, eating lunch, going home, having dinner, watching television, and going to sleep. Here, an error in one’s beliefs is far more likely to have adverse consequences, he says. If Caplan is correct, then the marginal costs model of information acquisition would advise one to forego such impractical knowledge. I join John Stuart Mill, however, in thinking it better to be Socrates dissatisfied than a fool satisfied. An economics which accepts preferences as sovereign has no authority to criticize me for obtaining satisfaction from the rhapsodic application of my impractical knowledge as I wander the Cathedral of our Lady of Chartres. “Impractical” knowledge is not only intrinsically valuable, as in the preceding example, it is of instrumental value as well. In a complex and largely unknown world to possess a magpie’s nest of useless knowledge is instrumentally valuable in obtaining goods and avoiding losses. Serendipity, the discovery of things by accident, has brought us velcro, penicillin, x-rays, teflon, dynamite, the Dead Sea Scrolls, and thousands of other benefits (Roberts, 1989, ix). The economist Jevons, the physicist Mach, the scientist Priestley, according to sociologist of science Merton (and Barber 2004, 158-162), are just a few of those who say that accidents more often than design propel the advance of discovery. Louis Pasteur, according to Merton, taught his overly practical students that, “Theory alone can bring forth and develop the spirit of invention.” Pasteur, one of the greatest benefactors of humankind, also said that “chance favors only the prepared mind” (Roberts, 244), but what is preparation? Kekule did not calculatively learn the image of ouroboros, the snake swallowing its tail, in order to discover the structure of benzene years later, presumably, he just happened to know it from natural curiosity. Caplan neglects the value of supposedly impractical knowledge in obtaining gains, but it helps avoid losses as well. In the U.S. television series of the same name, the hero MacGyver repeatedly applies seemingly useless knowledge in devising escapes from looming catastrophes, and apparently useless knowledge is serendipitously beneficial in our more mundane lives.
Much novel knowledge, including local social and political knowledge, and national political knowledge, is not obtained from dubious testimony or costly experiment, but is immediately inferred from theory at no cost. I shall elaborate on this point in the section on rational irrationality. In summary, I have suggested three types of costless information acquisition: the incidental, the inquisitive, and the inferential. Costless information acquisition might create a sufficient background of knowledge in which a marginal cost model of information acquisition could operate. The contributory theory of voting allows for instrumental turnout and it allows for instrumental information acquisition, up to a point. Given the many demands in her life, the citizen would seek for the minimum costly knowledge needed for reasoned choice, in politics, in the market, and in other life activities.
Rational Ignorance Applies to Both Voters and Consumers. A recent pilot study by Mat McCubbins, with my participation, compared student respondents’ knowledge of issues of concern to voters and issues of concern to consumers. Large majorities know about national political issues, and few (including me) know much about important but obscure state political issues. As to consumer issues, people don’t know which sports activities are more or less likely to cause injury, the content of toothpaste, the market costs of health insurance, which common foods have greater or fewer calories, which common grocery items cost more or less, or that acetaminophen is the major cause of liver failure, or that you’re more likely in your home to die of a fall rather than in a fire, among other things. They do know some details about their most beloved consumer items such as Ipods. Voters and consumers each showed a wide range of knowledge and ignorance on factual questions.
A response may be to concede that consumers are rationally ignorant about trivial purchases, but become fully informed when the stakes are high. How about the typical consumer’s biggest transaction, with the most dire economic consequences, purchase of a home? A quantitative survey by the U.S. Federal Trade Commission of 819 recent mortgage customers asked them to examine and compare hypothetical loan documents (Lacko and Pappalardo 2007). The study disclosed the following:
The failure to convey key mortgage costs was evident across a wide range of loan terms and among substantial proportions of study participants.
About a fifth of the respondents viewing the current disclosure forms could not correctly identify the APR of the loan, the amount of cash due at closing, or the monthly payment (including whether it included escrow for taxes and insurance).
Nearly a quarter could not identify the amount of settlement charges.
About a third could not identify the interest rate or which of two loans was less expensive, and a third did not recognize that the loan included a large balloon payment or that the loan amount included money borrowed to pay for settlement charges.
Half could not correctly identify the loan amount.
Two-thirds did not recognize that they would be charged a prepayment penalty if in two years they refinanced with another lender (and a third did not even recognize that they “may” be charged such a penalty).
Three-quarters did not recognize that substantial charges for optional credit insurance were included in the loan.
Almost four-fifths did not know why the interest rate and APR of a loan sometimes differ.
Nearly nine-tenths could not identify the total amount of up-front charges in the loan.
Results were confirmed and deepened by 36 in-depth interviews with recent mortgage buyers about their actual loan experiences: “Many had loans that were significantly more costly than they believed….Many of these borrowers did not learn of these costs and terms until at or after the loan settlement, and some appeared to learn for the first time during the interview. Some of these borrowers reported that they had spent considerable time shopping and comparing loan offers, but still experienced problems or misunderstandings.” Alba and Hutchinson (2000), in a review article on consumer knowledge, conclude that, “Consumers are overconfident – they think they know more than they actually do.”
In contrast, according to Delli Carpini and Keeter (1996), 91% of survey respondents could locate Texas on a map (1988), 76% the Soviet Union (1988), 63% Grenada (1983), 61% Peru (1988), 59% knew the state with the largest population (1988), 55% could name one Central American country (1988), and so on. In history, 91% know that the U.S. used A-bombs on Japan (1990), 84% why Pearl Harbor is important (1981), 81% who was Andrew Jackson (1955), 74% who gave the Statue of Liberty to the United States (1986), 58% who was Napoleon Bonaparte (1975), and so on. In politics (all 1989), 96% know the length of a presidential term, 89% can define veto, 74% know who is vice president, 73% who is governor, 55% which party controls the Senate, and so on. The range of knowledge and ignorance of political facts is much wider on the ignorance side than indicated in this exercise, but the point about comparing consumer and voter knowledge is made.
The notion that consumers are necessarily better informed than voters is a theoretical speculation, not an empirical fact.