Sometimes an idea can be so entrenched in society, you never think to question it till you see someone else do it first. You’re taught that it’s one of the greatest things ever when you’re in school, politicians and the media always refer to it in an overwhelmingly positive way, and it’s far superior to the alternatives that immediately come to my mind. Then you realize that not only is the idea a mediocre idea, very few have made a serious attempt at improving on it for god knows how long. This is how I’ve been feeling about democracy for the past few months.
This isn’t a “People are too stupid to make good decisions” rant. It’s not a critique on corrupt politicians, Gerrymandering, voter apathy, voter ignorance, money in politics, prevailing voting systems, or any of those things. All of those are, more or less, problems with the implementation of democracy. I want to make a stronger statement: the very idea of having the public vote on what policies should be passed is fundamentally ridiculous and stupid.
Again, this is not an anti-populist rant. No one should read this and think, “Yeah, there’s a ton of people who don’t agree with me and keep voting for the wrong people into office”. I’m saying you and I, as voters, have been given tasks that we are simply not suited for.
Let’s take an issue like Syria. During 2016 presidential debates and campaigns, candidates kept talking about whether they supported or opposed a no-fly zone over Syria. And I kept wondering… HOW AM I SUPPOSED TO KNOW IF THIS IS A GOOD IDEA OR NOT? How am I, or the average citizen, supposed to truly understand and weigh the military and diplomatic consequences of this decision better than the actual military strategists and foreign diplomats who are actively engaged in this? US foreign policy is incredibly complicated. Even if I were to read through all the news and op-ed pieces and expert opinions to weigh the arguments for and against, no ambassador or military commander or foreign policy expert would think I had any input worth listening to. And yet our democracies essentially ask that this decision be crowdsourced.
How about raising the minimum wage – is that a good idea? I don’t know and despite what you may have read, you don’t either. Study after study and meta-analysis after meta-analysis have yielded conflicting reports and hundreds of economists have both supported and opposed increases. If even the most learned people in the field can’t make up their minds, why do so many everyday people enthusiastically support or oppose minimum wage increases?
These are just two of a thousand policy proposals that candidates make and no one reads. Instead, we have skim arguments from trusted sources, weigh these decisions to ourselves, and then head to the ballot boxes as if we have a clue.
Decisions like this have real consequences and should be made by the people who understand and have expertise in the fields. Can you imagine a doctor who chooses which medication to prescribe patients based on crowdsourcing? An engineer who decides on how to build a bridge by polling people? A lawyer who decides what the best defense for his client would be by setting up a ballot box? The reason these don’t happen isn’t just impracticality, but because these are awful ideas.
The obvious solution of giving more power to the experts is called epistocracy, which means government of the knowledgeable. It’s also got an obvious counterpoint: if you give some “experts” the power to make the decisions they want, they will just make decisions that benefit themselves. Power corrupts, after all. This is a fundamental pitfall of epistocracy that essentially removes it from any serious consideration. So how do we do better? How do we incentivize the experts and the learned to do what’s best for everyone instead of what’s best for them?
A problem with democracy is that when we vote for a party, we are effectively voting on a large number of issues, indicating both what we want as well as how to get what we want. And I think democracy has survived and done so well because it lets the people voice what they want, not because it let them voice how to get what they want. In fact, I would say it has survived despite conflating the two and crowdsourcing the decision on how to get people what they want.
If you take the Syria example from above, for instance, people by in large want the same thing: we want our lives unaffected by international war, we want our tax dollars to not be wasted, and we want oppressive regimes removed. How we would prioritize these might be different but I don’t think anyone from either party wants to get attacked by ISIS, have their taxes be wasted, or see an increase in oppressive regimes in the world.
The same goes for the minimum wage question. Everyone wants a strong economy that will allow them a comfortable standard of living while doing what they like and not having to work themselves to death. Again, different people would prioritize things like job satisfaction, standard of living, and free time differently – and we should be able to vote on that. But the minimum wage itself is ultimately an implementation detail, one the average person is not qualified to answer.
This tends to be less true for social policy. Advocates and opponents of gay marriage literally want different things, as do advocates and opponents of abortion rights. Some “field experts” may be able to provide some information that may change your mind, but there are no experts who are better qualified to answer this question than individual voters, in the way there are in economic or international policy.
So how do we separate out the two? The key is that social policy depends on values. Are so-called traditional family values important to you, or is egalitarianism important for you? Economic and foreign policy depends more on beliefs. Will establishing a no-fly zone in Syria put us in a better military and diplomatic position or a worse one? Will raising the minimum wage lead to a stronger economy or a weaker one?
In essence, we always want the people to be able to voice their values. But we want just the experts to voice their beliefs. And we need to do this in a way so that no one can accuse the experts of bias or personal interest.
Futarchy is an untested form of government that is the brainchild of economist Robin Hanson. Its motto is “Vote values, but bet beliefs”. It tries to address the problem through betting markets. Betting markets, despite having orthogonal purposes, have been shown to be great aggregators of information that yield large degrees of predictive accuracy.
Here’s an (overly simplified) explanation of how such betting markets would work. Feel free to skip down to Section IV if you don’t want the gnarly details.
Let’s say the American government wants to know if raising the minimum wage would result in some sort of success metric as defined by the American people, let’s say reduced income inequality. A bank could offer the following assets:
- Asset D: Pay $1 if income inequality is decreased, conditional on minimum wage being raised
- Asset I: Pay $1 if income inequality is increased, conditional on minimum wage being raised
The price of these assets would be determined by what bettors are willing to pay. If bettors would pay $0.70 for Asset D but only $0.30 for Asset I, this implies a consensus that if the minimum wage is increased, there is a 70% chance that income inequality will decrease. (Think in terms of expected value if this isn’t immediately obvious: if both assets were equally priced, someone who thinks there is a 70% chance that inequality will decrease has reason to keep buying asset D until its price reaches $0.70, because that’s when E = 70%*$1 – 100%*$0.70 = 0.)
The more money people are willing to pay for Asset D than Asset I, the more confidence we have that raising the minimum wage will decrease inequality. If the measure is passed, the investors will be appropriately rewarded; if not, all bets are cancelled and no one will have made or lost money. And we can do this to evaluate policies individually to see what the prediction consensus is.
Under futarchy, voters will vote for what they want and the government will use betting markets to determine what the best policy would be. The reason betting markets work and are hard to corrupt is that everyone can be a part of it but only knowledgeable people can expect to make money out of it. This will lead to a world where people are truly incentivized to understand policy proposals and consequences because their own money is on the line. The overconfident will lose their money and learn not to bet; and when the majority or self-interested corporations are on the wrong side of an issue, experts can identify this and can make even more money by correcting for this. It ceases to matter whether you’re rich or poor, whether you’re loud about your opinions or quiet about them – what matters is your correctness. I could keep writing about why this idea is so promising, despite how weird it sounds at first, but Scott Alexander has already done that here.
Because futarchy is untested, whether it ends up being far superior to modern democracy, somewhat superior, or even worse, is unknown. But if you know what a status quo bias is, you will agree that it’s worth a shot.
How would we do a trial run? Perhaps someone could run prediction markets for all the main government policy proposals and record what a futarchial government would have done, what the actual government did, and what the outcomes were. After a decade of this, we could compare the outcomes that resulted when the real government and futarchial governments’ decisions were the same, with the outcomes that resulted when they were different.
After a decade of this, if this futarchial government was shown to be consistently better, maybe someone in a largely techy left-leaning libertarian city could run for office on the promise that they would base non-social policy decisions on what betting markets say to do. Then perhaps state governments would start looking into it and eventually it could make its way to the federal level. In the meantime, as this form of government gets more exposure, more people could bet in these markets and the process could be improved upon.
All of this sounds strange and inconceivable, I’m sure. But if there’s a lesson to be learned from 2016, it’s that what’s strange and inconceivable is still possible.
I don’t want to criticize democracy too much here. There’s no question that it’s a far superior alternative to fascism and monarchies. But I think it’s far too early to call it quits in coming up with even better political systems. Futarchy is just a solution I’ve heard of that seems promising, far more promising than epistocracy. But I’m hoping there will be others. Let’s move past democracy.