On Political Action

I stumbled upon an important article by Anthony Downs (1957) on political action in a democracy. I was not aware of this article, but it is very topical these days. It deals with how politicians act, taking into account that they seek income, prestige and power – which is consistent with behavior of other agents in society (according to economic theory).

On the voter’s decision (italics mine):

But, as soon as ignorance appears, the clear path from taste structure to voting decision becomes obscured by lack of knowledge. Though some voters want a specific party to win because its policies are clearly the most beneficial to them, others are highly uncertain about which party they prefer. They are not sure just what is happening to them or what would happen to them if another party were in power. They need more facts to establish a clear preference. By providing these facts, persuaders can become effective.

Now, compare this to how Scott Adams explains the behavior of president-elect Trump:

Trump, the Master Persuader, is rewiring our brains in real time – while we are watching him do it.

However, Down’s paper goes much deeper. I will close with a few quotes.

On informed voters (#falsenews):

Since the cost of voting is very low, hundreds, thousands, or even millions of citizens can afford to vote. Therefore, the probability that any one citizen’s vote will be decisive is very small indeed. It is not zero, and it can even be significant if he thinks the election will be very close; but, under most circumstances, it is so negligible that it renders the return from voting “correctly” infinitesimal. This is true no matter how tremendous a loss in utility income the voter would experience if the “wrong” party were elected. And if that loss – is itself small-as it may be when parties resemble each other closely or in local elections – then the incentive to become well informed is practically nonexistent.

On economists (Hi Paul!):

[…] economic theory has suffered because it has not taken into account the political realities of government decision-making. Economists have been content to discuss government action as though governments were run by perfect altruists whose only motive was to maximize social welfare. As a result, economists have been unable to incorporate government into the rest of economic theory, which is based on the premise that all men act primarily out of self-interest. Furthermore, they have falsely concluded that government decision-making in all societies should follow identical principles, because its goal is always the maximization of social welfare.

On Diversity

Reduced to a word, Jacobs’s argument is that a city, or neighborhood, or block, cannot succeed without diversity: diversity of residential and commercial use, racial and socioeconomic diversity, diversity of governing bodies (from local wards to state agencies), diverse modes of transportation, diversity of public and private institutional support, diversity of architectural style. Great numbers of people concentrated in relatively small areas should not be considered a health or safety hazard; they are the foundation of a healthy community.

A not to miss article on Jane Jacobs, diversity and politics.

And what will be the impact of Vinex-locations on political views one holds?

Book review (3): Van Dinten on Today’s Structural Problems

This is the last part of the review of Van Dinten’s short book (part 1 and 2) and teaches me how I have failed (and still fail) to grasp underlying, invisible mechanisms at work that might have a crucial impact when neglected.

In the 80s, Van Dinten argues how neoliberalism surged because of the rational way of organizing. Coase’s thought became leading. Everything needed to be expressed in costs, although often impossible in an evolutionary context (how can you ever price pollution while its effects are unknown?).

Helped by technological advance, organizations become obsolete in many occasions. Transaction costs have diminished, almost disappeared in many occasions; people can find the right service by using Uber, AirBnB, eBay, Amazon, Bitcoin, PayPal, Netflix, crowdfunding etc and do not need the big organisations (and governments) as before. Organisations reply in a predictive way: they try to cut costs in order to compete: efficiency dominates! Streamlined organisations hire and fire people when needed (helped by flexible employment regulations). Governments – while losing their coordinating role – respond by creating more and more regulations in order to maintain power. Regulation has become a top-down approach, restricting disruptions, while it used to be bottom-up initiative. There is loss of freedom.

Van Dinten perceives a “silent revolution”, roughly between two generations. The elder want to construct according to concepts and detailed plans: more regulations is the answer. The younger generation, on the other hand, organizes itself, uses (and takes care of) those aspects of their environment that they like and need.

Van Dinten provides the example of the EU and Brexit. The ever increasing amount of rules and overarching agreements in combination with a loss of degrees of freedom is a logical behavior from the point of view of the policy-making elite. They cannot understand that people look – instead – for more autonomy. The younger people find their own way, however. They don’t want regulations from above. The younger generation also turned out to be decisive in the Brexit vote – by not voting, they care more about their direct environment.