Читать книгу Selfishness, Greed and Capitalism - Christopher Snowdon - Страница 16

Debating mankind’s quotient of rationality may seem like an arcane academic exercise, but there is a practical issue at stake. For free-market economists, the question is not whether people are perfectly informed, impeccably rational individuals – obviously they are not – but whether they are better placed to make informed and rational decisions for themselves than politicians and bureaucrats are on their behalf. Criticism of the rational man hypothesis often leads to the conclusion that the government should intervene more strongly when rationality runs dry and information is imperfect. Ha-Joon Chang, for example, jumps seamlessly from straw man to statism in 23 Things They Don’t Tell You About Capitalism, asking ‘how can we accept economic theories that work only because they assume that people are fully rational? The upshot is that we are simply not smart enough to leave the market alone’ (Chang 2010: 173). By this, he means that ‘we’ (the people) are not smart enough and so ‘we’ (the government) must intervene.

The psychologist and behavioural economist Dan Ariely strikes a similar chord in his book Predictably Irrational. After describing some experiments which show that the price people are prepared to pay for certain goods can be manipulated, Ariely (2009: 48) concludes as follows:

So, where does this leave us? If we can’t rely on the market forces of supply and demand to set optimal market prices, and we can’t count on free-market mechanisms to help us maximise our utility, then we may need to look elsewhere. This is especially the case with society’s essentials, such as health care, medicine, water, electricity, education, and other critical resources. If you accept the premise that market forces and free markets will not always regulate the market for the best, then you may find yourself among those who believe that the government (we hope a reasonable and thoughtful government) must play a larger role in regulating some market activities, even if this limits free enterprise. Yes, a free market based on supply, demand, and no friction would be ideal if we were truly rational. Yet when we are not rational but irrational, policies should take this important factor into account.

The problem with delegating power from the individual to the state in the way Chang and Ariely propose is that the government is made up of the same flawed men and women who are supposedly so irrational in the marketplace. It is far from clear that we can expect the government to be ‘reasonable and thoughtful’ and there are few, if any, historical precedents for the state setting ‘optimal market prices’. Furthermore, if consumers suffer from systematic bias, so do voters. Can we expect irrational politicians elected by irrational voters to be more rational than the average Joe? In a famous rhetorical question posed in his first inaugural address in 1801, Thomas Jefferson (2001: 5) suggested that we could not:

Sometimes it is said that man cannot be trusted with the government of himself. Can he then be trusted with the government of others? Or have we found angels, in the form of kings, to govern him?

If buyers, sellers and politicians were all equally irrational, it might make little difference who makes decisions in an economy, but there are reasons to think that politicians’ decisions will often be worse. Their incentives to seek the best outcomes for the electorate are weaker than the incentives individuals have to advance their own interests themselves. They are surrounded by vested interests trying to persuade them to pass laws that will benefit a minority at the expense of the majority. And even if the politician can gather together an elite team of wiser persons who are objectively more rational than the man on the Clapham omnibus, he cannot possibly know the varied preferences of every citizen.

Consider how politicians come to wield power in the first place. They are elected, generally with less than half of the popular vote,9 by an electorate that is not entirely rational and is largely ignorant of politics and economics. Bryan Caplan argues that it would not greatly matter if the majority of voters were ignorant and irrational since they would vote in an essentially random manner in which their votes are cancelled out, leaving an informed minority as kingmakers who would swing the election towards the candidate with the best policies. However, he says that the situation is even worse than that. Voters are not just ignorant, they are misguided and systematically biased towards bad policies.

Over a period of many years, voters have been shown to support a range of policies which economists from across the political spectrum agree are costly and counter-productive. A worrying number of non-economists continue to hold beliefs which Caplan describes as ‘positively silly’ such as the notion that technology destroys jobs and that trading with other countries is bad for the economy (the latter objection usually being framed in terms of ‘jobs being sent overseas’). It is not unusual, even in broadsheet newspapers, to be told that crime and disease are good for the economy because they create work for those who have to clear up the mess – a fallacy that was mocked by economists in the mid-nineteenth century (Bastiat 1995). At the most elementary level, very large numbers of voters and politicians are wedded to ancient misconceptions about economics which can most generously be described as only superficially appealing.

The basics of economics, as explained in Adam Smith’s Wealth of Nations, are not hard to grasp and may even seem obvious, but, as Caplan (2007: 32) points out, people needed to hear them in 1776 and have needed to hear them ever since:

If Adam Smith’s observations are only truisms, why did he bother to write them? Why do teachers of economics keep quoting and re-quoting this passage [about people naturally being led to ‘employment which is most advantageous to society’]? Because Smith’s thesis was counter­intuitive to his contemporaries, and remains counterintuitive today. [Emphasis in original]

Take the issue of employment, for example. Individuals clearly benefit from having a job and need to have no understanding of economics to be incentivised to find one, but when economically naive politicians make it their task to find work for others, they are liable to endorse immigration controls, bailouts of failing companies, protectionism for failing industries and ‘job creation’ in the public sector (the only sector that they can easily control). Economists have understood for centuries that such policies are unsound. Although protectionism and tariffs appear to ‘create’ or ‘safeguard’ jobs, such policies encourage unproductive employment which drains the economy. Nevertheless, such schemes continue to be politically popular.

None of this should be construed as an argument for giving economists supreme executive power, let alone allowing capitalists to run rampant (‘The government of an exclusive company of merchants,’ wrote Smith (1999: 152), ‘is, perhaps, the worst of all governments’). The point about the free market is that it does not require central direction. Individuals do not need to understand the economic system in which they live for it to work. They know enough about their own abilities and aspirations to work productively in their occupation of choice. The problems only come about when authorities devise well-meaning schemes to help them out, often as a result of irrational voters electing badly informed politicians who pander to special interests and ill-informed prejudices.

Individuals rarely have perfect information, but collectively they have vastly more information about local circumstances and personal wants than any government agency could hope to gather. Once we recognise that the state is run by fallible human beings who have been elected by other fallible human beings, the case for the state making decisions for millions of people – who have different goals, different interests and different abilities – ceases to be attractive except when there is no reasonable alternative. ‘The law ought to trust people with the care of their own interest’, wrote Adam Smith, because ‘they must generally be able to judge better of it than the legislator can do’ (Smith 1999: 110).

9 In 2005, the Labour government had a large working majority with around 35 per cent of the popular vote and with just over 20 per cent of the electorate voting for it.