Wednesday, 1 August 2007

Dispatches from the Crooked Timbers

"Why is politics like sadomasochism?" is not a question you hear very often. It sounds like the start of a bad joke. In fact, it is the question that David Aaronovitch tries to answer in a new series on radio 4.

Via interviews with a range of politicians, academics and therapists, Aaronovitch explains why he believes that 'the electorate is need of psychiatric help.' His argument is that far from making decisions about who to vote for in rational manner, voters are swayed by a range of subconscious neurosis's. Though I am usually skeptical of psychoanalysis, quite a lot of it rings true. Aaronovitch suggests that voters create unrealistic explanations of politicians, so that they can feel a sense of grievance when they are disappointed. If this is true then it would explain the 'Mr/Mrs Angrys' who bombard politicians with furious complaints.

Aaronovitch is certainly not the only person to be suggesting that voters are not as rational as is often assumed. In his new book, the economist Bryan Caplan identifies a number of logical errors that voters commonly make. For example, they tend to equate prosperity with employment rather than consumption. This leads them to support policies that create work rather than wealth. An often cited (and rather extreme) example is a law passed in the state of Oregon that bans self service petrol stations, in order to protect the jobs of petrol pump attendants.

Now at this point you may be asking, so what? You didn't need David Aaronavitch to tell you that voters can be a bit strange at times. You and anyone else with a modicum of common sense already knew that. Well, the reason this matters is because an increasingly influential school of thought ignores this obvious fact.

Over the past few years, a previously obscure subject known as behavioral economics has become fashionable. It uses insights from psychology to understand economic decisions that are otherwise inexplicable. Behavioral economists have time and again shown that consumers and producers are not the rational calculating machines that traditional economics has often assumed them to be. The conclusion that some policy makers have drawn from this is that since economic agents are irrational, there is a case for state intervention to protect people from the consequences of their irrational choices.

The fatal flaw with replacing individual choice with government control in the name of reason is that the governments decisions are not necessarily going to be any more rational. The same people who are making irrational decisions about buying and selling are also electing the government and as we have already seen not going about it in a particularly rational way.

We cannot legislate against bad decisions and we should not sacrifice our freedom in the vain attempt to do so. Afterall, as Immanuel Kant once said: "Out of the crooked timber of humanity no straight thing was ever made."

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