The Strange Economics of Voting
"God, grant me the serenity to accept the things I cannot change,
Courage to change the things I can,
And wisdom to know the difference."
This is the famous serenity prayer, authored by Reinhold Niebuhr. It was the closest to theological orthodoxy that Niebuhr ever came.
It applies to voting.
VOTING AND LOTTERIES
Voting is irrational, according to free market economic theory. It is like buying a lottery ticket, only dumber. There is a Wikipedia entry on this: the paradox of voting.
The paradox of voting, also called Downs paradox, is that for a rational, self-interested voter, the costs of voting will normally exceed the expected benefits. Because the chance of exercising the pivotal vote (i.e., in an otherwise tied election) is minuscule compared to any realistic estimate of the private individual benefits of the different possible outcomes, the expected benefits of voting are less than the costs. The fact that people do vote is a problem for public choice theory. It was first observed in the modern social choice literature by Anthony Downs.
Was Downs correct? Economists think so. They generally dismiss buying a lottery ticket as a loss-producing activity for people who are bad at math.
A lottery is a form of gambling. Gambling is a zero-sum game: every winner wins at the expense of the losers. Also, there are house rules. The games are set up so that the house usually wins. This is why states run lotteries but prohibit private gambling: "the numbers." The states want to steal from the poor and the ignorant. They resent competition from profit-seeking businessmen: bookies.
The person who buys a lottery ticket believes that he may profit greatly if his "number comes up." Throughout history men have believed in four incompatible systems of overall causation: fate, luck, randomness, and the sovereignty of God. Fate is seen as impersonal. Luck is seen as personal. Randomness is seen as impersonal. God is seen as personal.
People who gamble trust in luck -- "lady" luck. Those who believe in randomness do not gamble. They understand the math. Those who believe in the sovereignty of God do not gamble. They trust in hard work, ethics, and the grace of God, none of which involves gambling. As for those who believe in fate, causation is meaningless anyway. They think men cannot affect the outcome.
The economist tells the gambler that the probability of a favorable outcome from buying a lottery ticket is so low that it is not statistically different from not buying the lottery ticket at all. "Save your money. Don't buy the ticket." But poor people buy them -- the very people who cannot afford the loss. They have given up hope in ethics, hard work, or the grace of God. But they want to believe in something that may help them. They believe in luck. Buying a lottery ticket is a religious act for them: an objective way for them to register their faith in luck. Luck may "smile" on them, they believe. "Give luck a chance."
I don't gamble in zero-sum games. That is because I do not believe in fate, luck, or randomness. I am a Calvinist.
I did participate in a zero-sum non-game: the U.S. government's allocation of radio spectrum that it stole back in 1927. I became a millionaire. So did my wife. We won two separate lotteries. My friend Terry Easton had figured out a way to beat the lottery. My subscribers won, and they won big. But my wife and I won biggest of all. It cost us nothing to play. My partner John Mauldin and his wife also won with us.
The government should have auctioned off the spectrum: "high bid wins." But since it selected a lottery, I participated. But this was not a game.
The same logic applies to commodity futures. It looks like a zero-sum game, but it isn't. The futures market solves two specific non-game problems: (1) how to allocate the ownership of uncertainty -- speculators vs. hedgers -- and (2) how to gain better knowledge of future prices at no expense to society -- "free riders."
My point: sometimes something that looks like gambling really isn't. Is this also true of voting? I think it is. But first, I will consider the costs of voting.
THE COSTS OF VOTING
Voting takes time. The more valuable your time, the more expensive voting is for you. This is the crucial economic insight regarding costs: the economic value of your highest-value use of a scarce resource. What would you have done with the time it takes you to vote? That is the cost of voting for you.
Libertarians have a mnemonic device: TANSTAAFL. "There ain't no such thing as a free lunch." But what about TANSTAAFE? "There ain't no such think as a free election."
Voting takes automobile depreciation: 56 cents a mile, the U.S. government says. It allows this for business depreciation.
It takes time to study the issues. People watch candidates debate. Why? Their vote will not affect the outcome.
The news media are filled with information about the candidates. This displaces news from which readers and viewers might actually be able to benefit.
The outcome of your vote is statistically irrelevant. The cost of your voting is not statistically irrelevant. This is the strange economics of voting.
"YOUR VOTE DOESN'T COUNT."
Critics of individual voters argue that voting is statistically comparable to buying a lottery ticket, but dumber. The person who buys a lottery ticket has a statistical change of getting an immense payoff. A person whose party wins an election knows that his vote will not make a difference, unlike a lottery ticket. His party will win or lose, with his vote or without it.
Next, the payoff is far smaller than winning the lottery. He is way down on the food chain of victory. Politics is a popular form of trickle-down economics. The people at the top get most of the takings. Politics is mainly about divvying up stolen goods.
Statistically, your vote doesn't count except in very small local elections. The larger the number of voters, the less your vote counts.
Voters in the USA care only once every four years. They care only about who is elected President. They vote in large numbers. So, the more important the election is to most voters, the less their vote counts. This is the strange logic of voting.
Their vote counts most in special elections held for a local office or ballot measure. But hardly anyone participates in special elections. That is why their vote would count far more. But they do not care. This is the strange logic of voting.
"YOU'RE THROWING YOUR VOTE AWAY!"
Let me ask you a question. Someone hands you an ownership certificate. It will cost you time and money to take ownership. There will be zero personal gain from owning it. What is the rational response?
Decline to accept ownership. In short, throw your vote away.
Yet the person who is critical of this decision thinks he is scoring a major debate point when he says: "You're throwing your vote away." You are indeed. So what?
You don't want to vote for the Presidential candidates of the two major political parties. You think you are being asked to choose between the lesser of two evils. Do you want to register your protest? Why? Can you articulate this? Have you ever tried?
Let's assume you have a clear answer. How can you register your protest?
First, you can vote for a third-party candidate.
Third-party candidate George Wallace had two slogans. (1) "Their ain't a dime's worth of difference between the two parties." "(2) Send them a message!" He ran in 1964, 1968, 1972, and 1976. In 1968, he gained 46 electoral votes. That is more electoral votes than any third party Presidential candidate had since 1912, when Teddy Roosevelt came in second to Woodrow Wilson. Wikipedia describes that election:
Wallace's "outsider" status was once again popular with voters, particularly in the rural South. He won 9,901,118 popular votes (out of a total of 73,199,998)--that is, 13.53% of votes cast nationally--carried five Southern states, won 45 electoral votes plus one vote from a faithless elector, came fairly close to receiving enough votes to throw the election to the House of Representatives, and became the last person who was not the nominee of one of the two major parties to win electoral votes.
Nixon won in a close race with Humphrey. Had it been 1960, Humphrey would have won. But in 1964, the South went Republican. Not in 1968.
Second, you can choose not to vote. No one will notice. But if millions of people choose not to vote, this will send a message: "No one cares." That does not bother the people at the top of the loot-allocation process.
Third, you can write in someone's name. Anyway, you could way back when: paper ballots. I did that in 2004: Ron Paul.
From an economic standpoint, choice #2 makes sense: don't vote. Don't get emotionally committed to the outcome.
PRAYER AND VOTING
I said that the serenity prayer applies to voting. Why do I think this?
First, individuals pray.
Second, it calls individuals to serenity about the things we cannot change. As individuals, voting does not empower us. It is a costly pastime that brings us no gain individually. It weighs heavily upon us individually.
We are to show courage in some cases. Does it take courage to vote? No. Does it take courage to face the outcome of an election. Sometimes.
But there is something else. Groups pray. People who believe that individual prayers can change things usually believe that corporate prayer has a better -- I dare not say "chance" -- likelihood of changing things.
So, prayer is a mixture of personal responsibility and corporate responsibility.
So is voting.
There is something else. The Bible teaches that the people corporately are responsible for the sins of their rulers, both priestly and kingly. Under the Old Covenant, the people corporately had to offer sacrifices for the sins of their rulers, priestly and kingly (Leviticus 4). The apostle Paul told churches to pray for rulers.
I exhort therefore, that, first of all, supplications, prayers, intercessions, and giving of thanks, be made for all men; For kings, and for all that are in authority; that we may lead a quiet and peaceable life in all godliness and honesty (I Timothy 2:1-2).
So, the Bible teaches corporate responsibility. But collectives are made up of individuals.
Voting is an act of confirmation. Put differently, it is a covenantal act. It is the judicial equivalent of the high priest's anointing of a king in ancient Israel. A judge, Samuel, anointed Saul and later David.
We call such acts sacramental. They are unique. There are ecclesiastical sacraments. But there are also civil sacraments. In democracy, voting is such an act.
From the point of view of individual economics, voting is irrational. It is more irrational than buying a lottery ticket. But if voting is sacramental, then there is a logic to voting.
You register your complaint by voting for a third party candidate. It is not "none of the above." But in a non-parliamentary system, as ours is, it sends this message: "Neither of the above."
Bernie Sanders' troops can vote for Stein and the Green Party. Disgruntled Tea Party members can vote for Johnson and the Libertarian Party. We can see who has more support: reds who vote green or tax protesters who vote for a man who is such an America-firster that he could not name a single foreign national leader.
There is only one worth naming: Putin. As long as you don't mess with him, it doesn't matter if you forget his name.
CONCLUSIONS
If you are a 100% methodological individualist, you are irrational if you vote. Your vote doesn't count. It costs you time and money for a zero rate of return. Yet there are libertarians who vote. They spend time reading about politics. Why? A few even get involved in the Libertarian Party. Why? Are they irrational? Or are they not really 100% methodological individualists. Are they closet holists -- the dark side?
If you are a 100% collectivist, you should always vote, even in a one-party system. That is why the Soviet Union imposed penalties on Russians who did not vote for the Great Leader. The Communist Party represented the Proletariat. The Proletariat was sovereign. Therefore, Russians were forced by law to vote: to demonstrate the sovereign will of the Proletariat.
If you are a methodological covenantalist, you should vote. But don't send any money to national headquarters. Spend money only on local elections if you spend any at all. With respect to voting for President, you are entitled to send them a message: "Neither of the above." This is not throwing your vote away. This is telling the looters in Washington to loot even more (Green Party) or less (Libertarian Party).
Don't forget to vote no on the bond issues. Get some fun out of voting.