Tag Archives: behavior of crowds

Selection Bias and the Road to Serfdom

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Office-seeking is about one thing: power. (Money is sometimes a motivator, but power is the common denominator of politics.) Selection bias, as I argue here, deters office-seeking and voting by those (relatively rare) individuals who oppose the accrual of governmental power. The inevitable result — as we have seen for decades and are seeing today — is the accrual of governmental power on a fascistic scale.

Selection bias

most often refers to the distortion of a statistical analysis, due to the method of collecting samples. If the selection bias is not taken into account then any conclusions drawn may be wrong.

Selection bias can occur in studies that are based on the behavior of participants. For example, one form of selection bias is

self-selection bias, which is possible whenever the group of people being studied has any form of control over whether to participate. Participants’ decision to participate may be correlated with traits that affect the study, making the participants a non-representative sample. For example, people who have strong opinions or substantial knowledge may be more willing to spend time answering a survey than those who do not.

I submit that the path of politics in America (and elsewhere) reflects a kind of self-selection bias: On the one hand, most politicians run for office in order to exert power. On the other hand, most voters — believing that government can “solve problems” or one kind or another — prefer politicians who promise to use their power to “solve problems.” In other words, power-seekers and their enablers select themselves into the control of government and the receipt of its (illusory) benefits.

Who is self-selected “out”? First, there are libertarian* office-seekers — a rare breed — who must first attain power in order to curb it. Self-selection, in this case, means that individuals who eschew power are unlikely to seek it in the first place, understanding the likely futility of their attempts to curb the power of the offices to which they might be elected. Thus the relative rarity of libertarian candidates.

Second, there are libertarian voters, who — when faced with an overwhelming array of power-seeking Democrats and Republicans — tend not to vote. Their non-voting enables non-libertarian voters to elect non-libertarian candidates, who then accrue more power, thus further discouraging libertarian candidacies and driving more libertarian voters away from the polls.

As the futility of libertarianism becomes increasingly evident, more voters — fearing that they won’t get their “share” of (illusory) benefits — choose to join the scramble for said benefits, further empowering anti-libertarian candidates for office. And thus we spiral into serfdom.

HAPPY INDEPENDENCE DAY!

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* I use “libertarian” in this post to denote office-seekers and voters who prefer a government (at all levels) whose powers are (in the main) limited to those necessary for the protection of the people from predators, foreign and domestic.

The Interest-Group Paradox

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The interest-group paradox is a paradox of mass action (my own coinage). In this post, I illustrate the concept of mass-action paradox with two examples, then turn to the interest-group paradox.

The paradox of thrift is probably the best-known paradox of mass action. According to an article at Wikipedia, the paradox (propounded by John Maynard Keynes) states that if, in the face of an economic downturn, large numbers of individuals try to save more money, the attempt to do so will worsen the downturn. That, in turn, will cause reductions in the incomes of large numbers of individuals, who will then be able to save less, not more. (The article continues with an explanation of the mechanism behind the paradox. The criticisms summarized in the article are unconvincing.)

Another familiar paradox of mass action has to do with the behavior of panicked crowds. If someone shouts “fire” in a crowded theater, many members of the audience may rush madly toward the exits instead of walking calmly, in lines. The mad rush likely will cause pileups at the exits, leading to more panic and worse pileups. As a result, many (perhaps most) of the theater-goers will die, if not from fire and smoke inhalation, then from being trampled and suffocated in a pileup. The paradox here is that the (panicked) effort by members of the crowd to save themselves may well result in their deaths. I call this the paradox of panic.

The paradox of thrift and the paradox of panic are paradoxes of mass action because, in both instances, large numbers of individuals come to harm when each of them tries to do something that he believes to be in his best interest.

I now turn to the main subject of this post: the paradox of mass action that I call the interest-group paradox. Pork-barrel legislation exemplifies the interest-group paradox in action, though the paradox encompasses much more than pork-barrel legislation. There are myriad government programs that — like pork-barrel projects — are intended to favor particular classes of individuals. Here is a minute sample:

  • Social Security, Medicare, and Medicaid, for the benefit of the elderly (including the indigent elderly)
  • Tax credits and deductions, for the benefit of low-income families, charitable and other non-profit institutions, and home buyers (with mortgages)
  • Progressive income-tax rates, for the benefit of persons in the mid-to-low income brackets
  • Subsidies for various kinds of “essential” or “distressed” industries, such as agriculture and automobile manufacturing
  • Import quotas, tariffs, and other restrictions on trade, for the benefit of particular industries and/or labor unions
  • Pro-union laws (in many States), for the benefit of unions and unionized workers
  • Non-smoking ordinances, for the benefit of bar and restaurant employees and non-smoking patrons.

What do each of these examples have in common? Answer: Each comes with costs. There are direct costs (e.g., higher taxes for some persons, higher prices for imported goods), which the intended beneficiaries and their proponents hope to impose on non-beneficiaries. Just as importantly, there are indirect costs of various kinds (e.g., disincentives to work and save, disincentives to make investments that spur economic growth). (Exercise for the reader: Describe the indirect costs of each of the examples listed above.)

You may believe that a particular program is worth what it costs — given that you probably have little idea of its direct costs and no idea of its indirect costs. The problem is millions of your fellow Americans believe the same thing about each of their favorite programs. Because there are thousands of government programs (federal, State, and local), each intended to help a particular class of citizens at the expense of others, the net result is that almost no one in this fair land enjoys a “free lunch.” Even the relatively few persons who might seem to have obtained a “free lunch” — homeless persons taking advantage of a government-provided shelter — often are victims of the “free lunch” syndrome. Some homeless persons may be homeless because they have lost their jobs and can’t afford to own or rent housing. But they may have lost their jobs because of pro-union laws, minimum-wage laws, or progressive tax rates (which caused “the rich” to create fewer jobs through business start-ups and expansions).

The paradox that arises from the “free lunch” syndrome is much like the other two paradoxes discussed here. It is like the paradox of thrift, in that large numbers of individuals are trying to do something that makes certain classes of persons better off, but which in the final analysis makes those classes of persons worse off. It is like the paradox of panic, in that there is a  crowd of interest groups rushing toward a goal — a “pot of gold” — and (figuratively) crushing each other in the attempt to snatch the pot of gold before another group is able to grasp it. The gold that any group happens to snatch is a kind of fool’s gold: It passes from one fool to another in a game of beggar-thy-neighbor, and as it passes much of it falls into the maw of bureaucracy.

I call this third, insidious, paradox the interest-group paradox. It is the costliest of the three — by a long shot. It has dominated American politics since the advent of “progressivism” in the late 1800s. Today, most Americans are either “progressives” (whatever they may call themselves) or victims of “progressivism.” All too often they are both.

(Related concepts: tragedy of the commons, ratchet effect. Related post: “Slopes, Ratchets, and the Death Spiral of Liberty.”)