Bryan Caplan
This George Mason economist favors free market biases over legitimate democracy, and has more ears in Washington than you might think.
By Steven White, Hampshire College
September 4, 2007
George Mason University economics professor Bryan Caplan thinks you have no idea what you’re talking about when it comes to economics. You don’t instinctively understand the market, you distrust unfiltered free trade, and you care too much about equality at the expense of growth. Your concern with corporate responsibility is misguided and your pessimism is just a psychological marker completely lacking reason. And because of this, we’d all be better off if you didn’t participate in economic decision-making. People like Caplan know what’s best for you. Trust them, they’re economists.
Columnist Jonah Goldberg, “20/20” co-anchor John Stossel, and former presidential economic advisor Gregory Mankiw have all praised Caplan’s work. He’s been getting a lot of mainstream coverage in places like the The New York Times Magazine and the The New Yorker in addition to right-leaning publications from The Economist to the The National Review. Caplan’s new book is called The Myth of the Rational Voter: Why Democracies Choose Bad Policies. As Chris Hayes of The Nation writes about Caplan’s work, "People tend to like books that dress up their biases in fancy statistics." At a recent Cato Institute panel on Caplan’s book, the audience wasn’t just full of libertarian cranks. It was packed with a mix of government agency employees, think tank scholars, academics, and embassy workers. To progressive audiences, Caplan’s elitist libertarianism might seem strange, but he is gaining an audience among people with real power.
Caplan wrote an “intellectual autobiography” that explains his journey into libertarianism. "It began with Ayn Rand, as it proverbially does," he writes. His friend convinced him to read a passage from Atlas Shrugged in an eleventh grade journalism class. He later finished the thousand-plus page tome in "three largely sleepless nights” and promptly requested materials from libertarian mailing lists.
Caplan attended the University of California-Berkeley, where he majored in economics and minored in philosophy. The summer before he started graduate school at Princeton, an internship with the Friedrich Naumann Stiftung in Germany fell through and he ended up interning with the Institute for Humane Studies in Fairfax, VA. Tyler Cowen, a George Mason professor who was then a weekly speaker at the IHS, befriended Caplan and told him to keep George Mason in mind when he finished his Ph.D. in economics. Cowen’s advice turned out to be sound enough. After finishing his degree, George Mason was the only institution to offer him a position and he continues to teach there today.
Caplan’s book basically argues that the vast majority of Americans are not simply ignorant, but rather possess four irrational biases: (1) an anti-market bias that underestimates the benefits of free market capitalism; (2) an anti-foreign bias that underestimates benefits of interaction with foreigners; (3) a make-work bias that overestimates the danger of unemployment; and (4) a pessimistic bias that overestimates the severity of economic problems. He argues that citizens often vote for economic policies that harm the country’s economy. To remedy this problem, Caplan suggests limiting the scope of democratic decision-making and leaving economic policy to be decided by experts.
But as liberal economist Jared Bernstein of the Economic Policy Institute recently wrote in The American Prospect, Caplan’s biggest problem is that "he fails to show that his version of economics gives us the optimal policies." His "anti-market bias" argument, for example, criticizes progressives for focusing too heavily on motives rather than results, but he obscures the often remarkable levels of corruption and greed guiding decisions that in fact don’t end with optimal results for society. And his "anti-foreign bias" seems directed equally at xenophobes on the right and anti-globalization activists on the left, but in the latter case there is hardly anything anti-foreign about it at all. Progressive critics of “free trade” don’t distrust foreigners. If anything, they simply distrust corporations that have long histories of exploiting foreign workers—something Caplan refuses to even acknowledge, let alone adequately address.
Caplan’s argument is intriguing on its surface because few can deny that the average voter knows far too little about politics or economics. But that isn’t exactly what Caplan is saying. He says voters are not only ignorant but systematically biased against his set of policy solutions. Voters may not always make the best choices, but democracy is about more than just the “right” outcomes. Even a Wall Street Journal writer has declared:
For [Caplan], democracy fails because it doesn’t produce the most economically efficient results. He would prefer to see independent experts shape policy or to put more power into the hands of the unelected solons on the Supreme Court. Such a strategy might be more efficient, but then again, American democracy has never been about efficiency.
His website also pays a strange homage to what he calls the Museum of Communism. According to the site, "The tyranny and atrocities of Nazi Germany have been justly condemned by world opinion for over 50 years. But it is only recently that Communist despotism has begun to receive remotely similar attention." As so often happens when economic conservatives discuss the atrocities of Soviet-style rule, Caplan uses this peg to slander the left.
Calling communism "a grand theoretical synthesis of totalitarianism," Caplan leaves no confusion as to his intentions: "The roots of Communism lie squarely in the works of philosopher Karl Marx." Marx, of course, was not a mass-murderer, nor do his theoretical writings share any of the blame for what leaders like Stalin decided to do after his death. Despite Caplan’s deep intelligence, his site shows he has an occasional tendency to behave like a conspiracy theorist nut.
Caplan contributes to a blog called EconLog: Library of Economics and Liberty. There, he provides analytical, often contrarian commentary on mostly economic matters. On it, he had a surprisingly apt explanation of his libertarianism:
Through the lens of the Jock/Nerd Theory of History, the welfare state doesn’t look like a serious effort to "equalize outcomes." It looks more like a serious effort to block the "revenge of the nerds"—to keep them from using their financial success to unseat the jocks on every dimension of social status.
Caplan definitely sees himself fitting into the “nerd” role of this dichotomy. His personal George Mason web page comes complete with low-quality images and bulky text that is reminiscent of a middle-school Geocities webpage circa 1995. On it, he cites his favorite movies: “21 Grams,” “Amores Perros,” and “South Park: Bigger, Longer& Uncut.” He admits “Hero Games” is his latest role-playing game obsession, and even authored a PDF-only graphic novel called Amore Infernale.
Caplan is determined to let the nerds have their revenge. In his world view, the rich got rich because they deserved to get rich. Those that get left behind will get by when the success of those at the top trickles down to the bottom. But rich and poor aren’t respectively nerds and jocks. Increased productivity is not necessarily distributed in an equitable manner, nor is wealth always built through the market: Often enough, people become wealthy through social privilege and blind luck. But Caplan ignores these realities.
At least Caplan is honest about his elitist tendencies. "In a modern democracy, not only can a libertarian be elitist; a libertarian has to be elitist," he wrote. "To be a libertarian in a modern democracy is to say that nearly 300 million Americans are wrong, and a handful of nay-sayers are right." Caplan’s ideology is free-market libertarianism taken to extremes, which Chris Hayes has aptly summarized for In These Times. He writes:
Caplan’s willingness to embrace the darkness, however, is what makes this book so important: It articulates in lurid detail the obscene id of Chicago-school, Grover-Norquist-style, free market fundamentalism (a term Caplan spends a chapter rebutting). Given a choice between democracy without free markets or free markets without democracy, many conservatives would gladly choose the latter.
America’s history of literacy tests and poll taxes aimed at preventing the poorest and least educated in society from voting means Caplan’s stance is uncomfortable at best. He dresses up blatant biases in academic credibility, and the fact that his radical theories are actually taken seriously among elite and powerful audiences is something that progressives should be paying attention to.
Steven White blogs at stevenwhite.typepad.com.
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Bryan provided a link from his site to your review so we can read first hand what you have to say. I personally have enjoyed his thought provoking blog and agree with most of what he says. I hope your readers will have the opportunity to read and think about some of the Libertarian ideas he presents.
— Gary Rogers - Sep 5, 08:11 PM - #Great analysis and compilation of commentary on Caplan’s book. Though I still think he should have titled it “One Dollar One Vote: The Best Government Money Can Buy.”
— T.R. Elliott - Sep 5, 09:34 PM - #You aren’t clear enough: do you or do you not believe voters have anti-market and anti-foreigner biases?
— Robin Hanson - Sep 6, 07:46 AM - #You have this listed under “Rundowns of our favorite right-wing ideologues” but Caplan is an anarcho-capitalist, not right wing. There is a HUGE difference.
— Warren - Sep 6, 12:34 PM - #Thanks for the great piece on Caplan’s book. His basic argument is pretty easy to understand. He doesn’t like how people vote. Therefore, they are wrong. It’s a nice sentiment — and an extremely dangerous one.
His other problem is that markets suffer from many of the same flaws as democracy — insufficient information, uninterested parties, etc. The advantage of having both markets and democracies is that they can help to keep eachother sufficiently in check.
— Matt Singer - Sep 6, 04:27 PM - #The anarcho-capitalist are quit comfortable with the plutocratic affinities of the right wing. Hence the term fits moderately well—in terms of economics—though not in terms of other social issues.
— T.R. Elliott - Sep 6, 06:16 PM - #“Anarcho-Capitalism” is an oxymoron. Anarchism is all about diffusion of power. Capitalism is all about concentration of power. When the means of production most people depend on for their survival are controlled by either concentrated private ownership or public (i.e. government) power, ‘freedom’s just another word for nothin’ left to lose’. ‘Left libertarians’ get it. ‘Right Libertarians’ don’t, so they just wind up rationalizing for fascists.
— G.P. Franck-Weiby - Sep 6, 06:47 PM - #Two objections to Caplan:
— Frank Lorniitzo - Sep 6, 09:41 PM - #1. Caplan misread “Atlas Shrugged”. Ayn Rand’s heros
are not economists but engineers and inventors. In addition her basic plot includes that good companies are ruined by boards and speculators. Rand weighed against all the subsidies for the rich programmed by the so-called libertarians. Scratch a libertarian and you’ll find a hypocrite.
2.If the “market” principle works, it should sell itself to these 300,000,000 Americans. The real danger is these “nerds” just have so much money that enables them to make everything one-sided such as the Grover Norquist debacles in Colorado.
While anarcho-capitalism is not a term often used to describe neoclassical or laissez-faire capitalism— also known as classic economic liberalism—it is not an oxymoron. Nor does anarchism advocate the ‘diffusion’ of power. Nor, does capitalism advocate the concentration of power (though some believe it can lead to the concentration of power). Get these facts straight, and you will have a better understanding of what you are talking about. Hope I could help.
— michael - Sep 6, 10:33 PM - #Also, Ayn Rand’s protagonists are not economists (or course), but that is not the point. They are libertarians, through and through. Howard Roark, arguably her most famous protagonist, fought a system that would not allow him to freely create what he wanted in his architecture. Architecture, if you know Ayn Rand’s philosophy, is a metaphor for life. Thus, Roark was fighting a metaphoric battle with an establishment that obstructed his liberty to create—the teleology of humanity.
— michael - Sep 6, 10:50 PM - #Mainly, Ayn Rand’s protagonists are flat caricatures. I read a great description of the Ayn Rand cult once: it’s primarily inhabited by people who were never exposed to deep philosophical ideas before coming upon their warped regurgitated form in her books. This seems to fit with the Caplan bio in which he was exposed Ayn Rand in high school—apparently before he was exposed to anything of more depth. He is on record comparing her to Tolstoy. Ugh.
Sorry. I just can’t help myself. Picking on Caplan is like shooting fish in a barrel. Easy pickings. He’s a living caricature.
— T.R. Elliott - Sep 6, 11:25 PM - #Thank you for comments 10 and 11. Philosophy (language analysis) should teach the difference between metaphor and fact. One should watch out
— Frank Lorniitzo - Sep 7, 06:54 AM - #for and be suspicious of cults, no matter how good the original proposal. Such as Marxism and Christianity. But having seen Roark’s statements I think he is a nut case.
Thank you for your very well-written and thought out article.
What I find interesting about these “free market,” or whatever you wish to call them, advocates is that “free” seems to mean free money to them off the backs of working “stiffs.” For example, all those in the present administration who have been like “pigs at the trough” to quote Huffington, treating tax money as their private stash. Also, the same goes for the unregulated and little-understood hedge funds who are bailed out by tax money when they are about to tank, while their owners are living high on the hog. Not to forget the Savings and Loan and what is happening now with mortgages, etc., etc.
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— Salwa - Sep 7, 11:56 AM - #In defense of Caplan, he would not support crony capitalism nor the pigs in the trough.
My complaint with people like him: Utopianism, a not uncommon trait of nerds.
As a nerd myself of sorts, I read Fountainhead years but found it a flat and melodramatic. And I chose to pursue science—physics—instead of sociology—economics.
— T.R. Elliott - Sep 7, 02:30 PM - #I don’t think Caplan qualifies as being member of any sort of cult. He clearly thinks by himself and will never justify anything by quoting Ayn Rand (or anybody else for that matter).
— Maria - Sep 8, 11:23 AM - #Caplan’s general hypothesis is quite compelling. Given the infinitesimal importance of a person’s vote to their own circumstances, there is no penalty for indulging bias. Whether he has correctly identified prominent biases is another question. But on the more general question, I think he is probably right that political opinions are mostly exercises in consumption behavior not judgment.
— henry evans - Sep 12, 02:12 PM - #Caplan’s general hypothesis is quite compelling. Given the infinitesimal importance of a person’s vote to their own circumstances, there is no penalty for indulging bias. Whether he has correctly identified prominent biases is another question. But on the more general question, I think he is probably right that political opinions are mostly exercises in consumption behavior not judgment.
— henry evans - Sep 12, 02:12 PM - #Sorry to say. Caplan’s book is full of illogical and contradictory arguments, mangled terms, cultural prejudice, and a whole lot of other weaknesses. It’s also pretty scary when you really think about what he is arguing for. He is hermetically sealed inside his own thinking and theories, and totally unhinged from the real world… past and present. I won’t recap the whole list of objections here… but it’s on my site. (literalmayhem.com)
— Martin - Sep 21, 08:47 PM - #>>And his “anti-foreign bias” seems directed equally at xenophobes on the right and anti-globalization activists on the left, but in the latter case there is hardly anything anti-foreign about it at all.>Progressive critics of “free trade” don’t distrust foreigners. If anything, they simply distrust corporations that have long histories of exploiting foreign workers—something Caplan refuses to even acknowledge, let alone adequately address.
— David - Oct 4, 11:19 AM - #As one who sat in Bryan’s class long before this book hit the shelf, I can say that you simply do not understnad his critique of democracy. Bryan makes an externality argument, and you merely yack about how he does not like how people vote. You have grossly mischaracterized his work.
— Doug MacKenzie - Oct 15, 03:38 PM - #BTW why don’t you have a stab at my own critique of democracy, recently accepted for publication at JEBO. It is online at the Mises Institute under the title of “The Use of Knowledge about Society”.
— Doug MacKenzie - Oct 15, 03:42 PM - #So, ‘campus progress’ means satiating our demand for irrationality by making ad hominem remarks? You might as well have said Caplan murders puppy dogs.
Caplan does what most economists are unwilling to do: define irrationality. The fact that its a big pill to swallow doesn’t mean its any less correct.
If anything, you satirize yourself in this article by displaying the kind of freel-good preference fealty Caplan discusses in his book.
— Timothy Sottek - Oct 31, 10:30 AM - #Whats more:
I just noticed a link on the right side of the page titled “ask the expert.”
You say in your article: “People like Caplan know what’s best for you. Trust them, they’re economists.”
— Timothy Sottek - Oct 31, 10:32 AM - #Whats the deal? Trust YOUR experts but not economic experts?
Please explain to me how Caplan writing a graphic novel has anything to do with the your assertion that his political economy ideas are dangerous. The ad hominem paragraph is totally unnecessary in analyzing Caplan’s beliefs and only diminishes the quality of a mostly good profile. Worse, this is not the first Campus Progress profile to fall into near name calling. It’s Campus Progress, not high school.
— Kyle Gracey - Oct 31, 11:34 AM - #Thank you for the excellent article. After all the fawning that this asshole has been receiving in the mainstream press, it’s nice to see SOMEONE offer him his comeuppance. Thank you for the excellent job.
I, as well, did a bit of writing regarding this asshole and the dishonest methods that he uses to move his disgusting policy-preferences into the mainstream. Most recently I wrote of him here, where I referenced some past notes on CapCap as well: Yes, Bryan Caplan IS a cold-blooded asshole
All the best and thanks ~
mnuez
— mnuez - Nov 3, 03:33 AM - #www.mnuez.blogspot.com
Oops.
“Yes, Bryan Caplan IS a cold-blooded asshole”, is a title . The HTML apparently didn;t come through.
The link is here:
http://mnuez.blogspot.com/2007/11/yes-bryan-caplan-is-cold-blooded.html
— mnuez - Nov 3, 03:39 AM - #“To be a libertarian in a modern democracy is to say that nearly 300 million Americans are wrong, and a handful of nay-sayers are right.”
Why is this sentiment, or elitism, if defined by it, morally objectionable? Proponents of democracy and many progressive reforms were once small minorities.
Regardless of Caplan’s politics, arguing the unpopularity inherent in his views makes them any less legitimate is hardly an attitude befitting of ‘progress’, and mars an otherwise useful criticism.
— DPT - Nov 3, 11:43 PM - #“To be a libertarian in a modern democracy is to say that nearly 300 million Americans are wrong, and a handful of nay-sayers are right.”
Almost the entirety of humanity believed that the earth was flat; does that imply that they are correct?
Parrhissa (truth to power) is a common theme in history of thought. Caplan can be compared to Socrates seeking truth in the face of a hostile mob.
One key element of Ayn Rand’s writing is missing from this discussion-the idea that there is an objective truth and it is knowable. This is the key of her writings and a controversial ideal in the sea of relativism that permeates modern society.
One is made to wonder how many of the critics of Caplan that have posted on this site have read his book or have taken even a basic economic course?
— arp - Dec 9, 02:55 AM - #Actually he favours legitimate market mechanisms over the tyranny of the masses. Big whoop. Get over it.
— Inquisitor - Jan 13, 08:06 PM - #Their problem over there is that they, like most Randians, think they are much smarter than they really are. They mistake strict adherence to a philosophy for intelligence. Start questioning their prejudices and you will find yourself banned from their blog. What is sad, is not only can they not see how their own prejudices blind them to reality, they react so vehemently when people point them out to them. They are not Libertarian as they claim. All they are doing is packaging a shallow pop version of Libertarianism for individuals who desire a ready-made philosophy and justification for what they are already doing. That he can’t see the almost eerie parallels between his theories and the Bolsheviks is a little alarming. In both cases we have ‘experts’ who take over the control of policy and government for the benefit of society. Why he thinks Randheads will govern without the corruption endemic to humankind is never explained. Perhaps only individuals steeped in the mystery of the Virtue of Selfishness can govern others wisely. ‘
It is telling that I got banned from the blog for questioning the heart and soul of their philosophy, that poor people are poor because they show moral weaknesses and ‘poor impulse control’. I guess if you are a little rich kid and the only poor people you know are the drug-addicted little brothers of other rich kids, this makes sense. To those outside Caplan’s little echo chamber, those who have experience in the real world, this is pure idiocy.
— Morgan - Jan 16, 08:16 PM - #To the above commenters (not that I necessarily expect them to read this):
Comment 8: Of course Ayn Rand weighed against subsudies, but so would Caplan. As an Anarcho-Capitalist, he wouldn’t want any taxes, so there would be no money to subsidize him with in his ideal system. But actually, all true libertarians are against big buisness subsidies.
Comment 7. Anarchy is the absence of government. Left-anarchists and Anarcho-capitalists agree that government should be abolished, but disagree on what happens next. Will people choose to cooperate or compete? I would guess a mix of both. But my point is that until government is abolished, both anarchy types are working towards the same goal.
Comment 30: We call them “Randbots” where I come from.
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Caplan’s book raised some interesting points about voter biases. However, his solution of deferring to experts is something I totally disagree with. Tyranny of a minority is just as bad as tyranny of a majority, even if that minority knows what they are talking about.
As for the ad hominem attack on Caplan’s nerdy-ness, it doesn’t add to the critique. However, to be fair, if you’ve ever met him, he exudes nerdy-ness.
Also unfair is the “right-wing” classification. I assure you that a libertarian like Caplan hates right-wingers and neocons just as much as he hates liberals. Call it equal opportunity. Perhaps a new category might be in order, “Know your anti-government speakers?”
As a bleeding-heart Anarcho-Capitialist, I genuinely believe that my system is the most beneficial for the most people, because it allows them to work together consensually, without aggression or force, to accomplish their goals. I probably wouldn’t call Caplan representative. He comes across very harshly, since he is coming at it from a purely economic standpoint.
— Lehua Makai - Jan 18, 05:58 AM - #SLANDER: “[W]e’d all be better off if you didn’t participate in economic decision-making. People like Caplan know what’s best for you. Trust them, they’re economists.”
CAPLAN’S TRUE MESSAGE: Caplan’s solution is not an economic elite to rule America. He merely objects to the noneconomic (yes, ignorant) majority ruling America and proposes a hands-off approach. We’d be better off if NOBODY participated in group decision making than the status quo.
Caplan spikes such a refutation in his article for CATO Unbound:
“I suspect that many readers will just view me as “tone-deaf” to democracy. Whether or not the people know what they are doing, don’t they have a right to choose?
I can understand when people make this argument about self-regarding choice. Even if an individual does not know his own best interest, I normally think that he should be free to make his own mistakes. The problem with irrational voting, unfortunately, is that people who do it are not “just hurting themselves.” If the average voter is irrational, we all have to live with the consequences.”
www.cato
— Allison McCarty - Jan 23, 08:12 PM - #