*Affluence and Influence*

by on July 22, 2012 at 3:32 am in Books, History, Political Science, Uncategorized | Permalink

The author is Martin Gilens and the subtitle is Economic Inequality and Political Power in America.  A few points:

1. It is an interesting book.

2. It is poorly written and the first fifty pages should have been abolished.

3. It argues, using a comprehensive data set, that the preferences of poor and even middle income people are neglected or underrepresented in the policy process.  The preferences of the wealthiest ten percent seem to have more sway.

4. It should take greater care to distinguish the preferences of the (often ill-informed) poor across means and ends.  Say a poor or middle class person feels “I want tariffs” and also “I want prosperity.”  The elites then push through free trade to produce prosperity and for that matter to get reelected and perhaps also to serve commercial interests and donors.  Have they met or frustrated the preferences of the poor?  By the metrics of Gilens the poor did not get their way but that is not obviously the correct conclusion.  Matt makes a related point.

5. Many lower- or middle-income voters decide to vote retrospectively over outcomes (mostly), rather than over policy inputs.  That suggests we should judge the responsiveness of the system in terms of how well it aims toward those outputs, not whether it gives lower-income voters their preferred policy inputs.

6. What is wrong with this simple alternative hypothesis?:  Politicians seek some measure of redistribution-weighted prosperity to get reelected.  Wealthier voters are better educated and smarter, so they have a better sense of which policies will bring that about.  It seems the wealthier voters are getting their way on policy inputs, but a deeper look shows the pressures on politicians are quite general.

7. I would be falling prey to the fallacy of mood affiliation if I simply assumed the author wanted policy to be more responsive to the wishes of the poor and middle class.  Still I can ask whether this would be a desirable end.  Aren’t they less educated and less well-informed on average?  Don’t they also care about politics less and derive less of their status from political processes and outcomes?  Do I want them to have a greater say over social issues, including gay marriage?  No.

Here is a Boston Review symposium on the book, including many responses from the notables on the sidebar, along with a response from the author.

1 dan1111 July 22, 2012 at 4:08 am

Ultimately, the poor and middle class have the great advantage over the elite in votes. The extra power and money that the elite may use to influence the political process can’t overcome this (unless, of course, the system is “rigged” by the rich, a claim that is often made but not really supported).

Simple observation of the political scene suggests that the poor and middle class have great influence. Programs like medicare and social security are untouchable, even to the point of potentially bankrupting the country. The poor pay little to no income tax and receive a great deal of services. A topic like gun rights is certainly not being driven by the elite. Candidates are constantly drinking beer at Joe’s Bar, shaking hands with factory works, and so on.

Another issue is that the preferences of the elites and the poor often converge. The rich tend to favor programs to assist the poor, for example. And none of the groups in question are monolithic. Thus, the subset of issues in which their preferences diverge in a measurable way must be a rather unusual bunch of issues, unlikely to be representative of the political scene as a whole. Admittedly, I haven’t read the book.

2 Andrew' July 22, 2012 at 4:59 am

We have an education system that stresses obedience with zero-tolerance for boys being boys (while counter-intuitively tolerating bullying to an extent that I think cannot be coincidence) to provide the robber barrons with compliant workers and a credit system that promotes the poor to aspire to an expensive lifestyle which is a cheap knockoff of how the rich live (e.g McMansions). I find this an interesting dynamic.

3 foosion July 22, 2012 at 5:29 am

>>Programs like medicare and social security are untouchable, even to the point of potentially bankrupting the country.>>
That depends on whether you consider the country to be the federal government or the citizens of the country. “Touching” medicare would may reduce costs to the government, but it would increase costs to individuals even more.

Social security is close to fully funded for the indefinite future and would be fully funded with a small increase in taxes.

The problem with medicare is that US healthcare is too expensive. Ending medicare would increase healthcare costs, as medicare has more buying power and lower overhead than alternatives. We may be able to reduce costs by reducing the amount healthcare, but that would result in many sicker or worse people.

4 Andrew' July 22, 2012 at 6:14 am

“Ending medicare would increase healthcare costs, as medicare has more buying power and lower overhead than alternatives.”

I think not. The buying power argument assumes that this reduces prices. How could it reduce prices? Buying power (as touted) can really only reduce costs by taking from the profits of the medical services system. Insurance company profits seem to be fairly low (although there is a lot of gaming the accounting). Doctors and nurses don’t have enough onions to squeeze blood from. To paraphrase a quote about power the buying power to give you what you want is the power to take what you have. So, it is either reducing costs by taking away profits or by limiting consumers. The reason we are discussing it is because it hasn’t limited costs and that is why we are also discussing limiting consumers (death panels or effectiveness committees). The lack of overhead is a function of the non-limitation of consumers. You live long enough, you get medicare. No need for overhead membership overhead. There also hasn’t been any significant cost containment with medicare- you have a different population and it has risen higher than inflation, if slightly slower than private insurance- though I doubt that, and I believe that Medicare has increased the competition for resources raising costs and prices.

WRT overhead, most of the advantage is likely miscounting:
http://www.forbes.com/sites/aroy/2011/06/30/the-myth-of-medicares-low-administrative-costs/

5 Andrew' July 22, 2012 at 6:23 am

http://www.usatoday.com/news/health/2009-02-25-medicare-costs_N.htm

I don’t think people really know why there is such regional variance in per patient cost, but if medicare “controlled” costs this wouldn’t happen. So, the factor must be something different than medicare cost control.

Also, I’m finding it difficult to find sources, but accounting “per enrollee” obviously obscures medical service costs from insurance costs. Everyone gets enrolled in medicare, so this skews the enrollee denominator and at the very least is an unfair basis of comparison.

6 Floccina July 22, 2012 at 8:19 pm

“Touching” medicare would may reduce costs to the government, but it would increase costs to individuals even more.

How could that be true? Who do you think is fund the Government?

7 Ricardo July 22, 2012 at 10:19 am

“Programs like medicare and social security are untouchable, even to the point of potentially bankrupting the country. The poor pay little to no income tax and receive a great deal of services.”

This point is overstated. First, while the poor can generally avoid paying income tax, they do not avoid paying the payroll tax that funds Medicare and SS. The wealthy, on the other hand, avoid paying SS taxes on most of their income. And this is not even mentioning the “carried interest” tax treatment and other such loopholes.

On the question of beneficiaries, the poor certainly do benefit from SS and Medicare but the overall distributional impact of these programs is quite modest, especially for SS where benefits are computed based on a weighted average of one’s salary history up to a certain limit. In dollar terms, the biggest beneficiaries of Medicare+SS are solidly in the middle class. Medicaid is much more targeted toward the poor but Medicaid is a relatively unpopular and dysfunctional program that is not even fully funded by the federal government. This set of facts seems to support the notion that the poor, if not the middle class, don’t have much influence over federal government policy.

8 Willitts July 22, 2012 at 6:26 pm

The wealthy, on the other hand, avoid paying SS taxes on most of their income.

Yeah, let’s just remove all pretense that SS is a social insurance program and revealed its true nature as a redistribution program.

The net return of SS is negative for most high income individuals who could otherwise earn positive returns. That’s not a “modest” redistributional impact. It’s theft.

More than half of the population are net beneficiaries of our tax and transfer system.

9 Steven Kopits July 22, 2012 at 10:20 am

+1000 for dan.

If the elites really controlled taxing and spending, then government spending by rights should be far lower than it is (assuming the elites want to be taxed less), and the lower 47% would be paying a poll tax, not effecitvely no Federal tax at all.

10 Jan July 22, 2012 at 11:33 am

“…and the lower 47%…not effectively no Federal tax at all.” The point has been made above, but this is wrong. They pay all kinds of taxes, many of which are regressive. Very few people who aren’t elderly, permanently disabled or full-time students pay no federal tax.

Consider all this talk about how very little the expiration of the Bush tax cuts for the rich would actually impact the deficit. The rich and elite don’t care that much about government spending as long as they don’t have to pay for most of it, really they don’t. The middle class are the ones primarily funding and also benefiting from government programs.

11 Ricardo July 22, 2012 at 11:42 am

Also, it is worth pointing out that SS is in no way “bankrupting” the United States. It is a program that is funded largely by the (younger) middle class and mostly benefits the (older) middle class but faces a long-term deficit that must be made up either by raising taxes or cutting benefits. If Congress were to remove the cap on SS-taxable earnings and perhaps bump up the payroll tax by a few percentage points, that would fix the solvency problem immediately.

Might the fact that many intelligent and otherwise well-informed people claim SS is facing a “crisis” or “bankruptcy” (rather than a completely predictable and easily solvable long-term shortfall) be evidence of elite influence on public policy discourse? I grant that the fact that SS benefits are considered untouchable is a sign of middle class voter power but this seems to be balanced by elite influence among commentators and op-ed columnists who use gloom-and-doom rhetoric to justify support for cutting future SS liabilities. The net result is a stalemate in which neither taxes are raised nor are benefits cut.

12 Champ July 22, 2012 at 12:52 pm

I’m not sure whether Ricardo’s proposed fixes for SS would in fact work, but for the sake of argument let’s assume they would work. The problem I have with these type of fixes is that they have been utilized in the past yet did not permanently fix the problem. Over the history of SS there have been several times when we raised the tax by a few percentage points to try to close the program’s solvency problem. And here we are again talking about the same thing.

So, Ricardo is right that this *could* increase the revenues to the SS program. However, the money doesn’t stay in the SS program. The problem has always been that all federal revenue, no matter its source, is dumped into one big pile of money from which all expenditures are made. There is no meaningful attempt to keep monies in their own funds and draw targeted expenditures from the appropriate targeted funds.

So gasoline taxes are not guaranteed to be spent on highways, tobacco taxes are not guaranteed to be spent on health programs, and SS taxes are not guaranteed to spent on SS benefits. Instead, all the money is combined and the next bill due is paid out of the combined money without regard to where it came from. When there is not enough money in the combined pile, additional money is borrowed and thrown in the same pile. Have you ever heard the Treasury Secretary complain that he couldn’t pay a bill because, while there may be plenty of money in the treasury, there is not enough money left in fund X?

This is, of course, an ideal accounting system for politicians as they don’t have to worry whether they have adequately funded a program. So I worry, and I hope my fellow citizens worry, that any increase in SS taxes will be squandered on expenses that do not result in a more solvent SS program. indeed, the solvency of the SS program is the same as the solvency of the entire federal government.

The lesson I take away from this is — don’t let a politician run your retirement fund. Whatever system we choose to fund our retirements, it should be constructed with the least likelihood of political interference. The current system does not meet that requirement.

13 The Original D July 22, 2012 at 3:27 pm

I believe SS should be means-tested and suspect that would fix a lot of the problems. SS was designed as an insurance program, not a retirement program.

14 Willitts July 22, 2012 at 6:51 pm

No, SS was designed as a retirement program, not an insurance program.

No insurance company would run SS the way it is run.

15 The Original D July 23, 2012 at 3:16 am

FICA stands for the Federal Insurance Contributions Act. It is meant to supplement pensions, not replace them.

If we means tested distributions it would act as insurance. You pay into the fund over your career as a hedge against future calamities.

16 Willitts July 22, 2012 at 6:49 pm

You are confusing “saving the system” with “preserving the promise.”

SS was supposed to be a self-funded, intergenerational transfer that put a minimal level of income under ever retiree. It was never intended to be the sole source of retirement income. It has become a rape and pillage program where Congress spent the surplus from the baby boom and loaded up on debt it cannot repay.

Raising retirement age breaks the promise.
Raising taxes breaks the promise.
Raising the maximum contribution breaks the promise.
Cutting benefits breaks the promise.

All of your supposed “fixes” sacrifice the guaranty for the sake of keeping an inherently insolvent system alive to maintain the legacy of its myopic founders. All of the problems of SS were evident when it was started. Congress added more problems by increasing benefits and adding beneficiaries. So many people are holding SS IOUs that a majority are afraid to end it.

I am a financial advisor to moderately wealthy people but who, like everyone else, fear outliving their assets or having little to give to their children or grandchildren. Most of the risk of superannuation and bequest depletion could have been solved if they had had that 15.3% of taxable income to invest all those years. They were robbed so that people who earned little and saved nothing could become idlers on the government dole.

Hell, if half of those contributions were returned, I could work wonders with it. Instead, I’ve got successful people with careers, college degrees, and small businesses who have to sell their homes or get reverse mortgages to survive or help their grandkids go to a good university. “Rich” is relative and there is nothing “secure” about Social Security. In fact, the clients I have that have the fewest worries are retired teachers who could and did opt out of SS.

Propose to voters whether to save SS, they’d vote yes because their money is in it already. But give them the choice to opt out from this day forward for an individually owned matching fund, and I’ll bet 80% would do so.

17 GiT July 22, 2012 at 10:10 pm

Let’s all shed a tear for the poor, savaged, home-owning, multi-generation-college-educated, small-business-owning, financial-adivisor-hiring middle-class who can’t find money to pay for their grandchildren’s overpriced college education because they’ve earned a lower rate of return on their half mil+ in retirement savings stuck sunk in their social security entitlements. If anything in the world warrants histrionic rambling about taxation as theft, it’s this.

18 Willitts July 23, 2012 at 12:25 am

They earned it with their hard work and intelligence, and all you can do waste precious oxygen. People like you are viruses.

They don’t need your tears. They just need your filthy hand of their wallets.

19 GiT July 23, 2012 at 3:46 am

Oh, you know what I do for a living? Impressive.

20 The Original D July 23, 2012 at 12:53 pm

It’s call social insurance. Do you really think Paris Hilton should get benefits when she retires?

21 foosion July 22, 2012 at 5:22 am

Free trade agreements are an interesting example. They generally seem designed to tilt toward the elites and against the middle class and poor. They do this by increasing competition for the jobs held by the middle class and poor, retaining limits on competition for many who have higher incomes (e.g,, those with government monopolies, such as doctors and lawyers) and reducing competition for many at the top of the income distribution (e.g., holders of intellectual property monopolies, such as drug companies).

This produces a larger pie (standard benefits of trade), but one not broadly shared. The standard answer is to redistribute income so that no one is worse off as a result of trade, but the elites block such moves.

Those hurt by this are right to resist, even if the country as a whole benefits.

22 asdf July 22, 2012 at 11:43 am

Please stop telling Marginal Revolution simple truths that would blow up their entire worldview if they put even the slightest thought into things beyond what they read in Econ 101.

23 derek July 22, 2012 at 1:19 pm

There was a news item last week that Canadian per capita income has increased near or surpassed that of the US. A stagnant economy with chronic high unemployment, somewhat like what you see in the US, is no longer. Free trade is one of the things that changed. It could be argued the barriers that still exist in Canada to economic development are sectors that have protection from external competition. Telecom for example.

I’d like to see the evidence where the US economy and wages would prosper under a protectionist regime. There are some that would do well with that, but it isn’t who you think it is.

24 Anon July 22, 2012 at 1:52 pm

AHHH!! I disagree derek. The fact that Canada has significant barriers in several sectors of its economy does NOT explain Canada’s per-capita income. Telecom barriers enrich telecom companies, while screwing over consumers. MAYBE there is an argument that GDP is greater because of this (similar to the broken window’s fallacy- the revenue of the companies are greater than if the sector was more open). But this does NOT make Canadians better off; all we get out of it is high prices, lower quality service, and an enriched oligopoly. Same thing can be said about the dairy industry, where consumers get shafted and dairy farmers get enriched.

You’ll notice on the Wikipedia page for Canada that the NOMINAL GDP is ~$50k (USD), while the PPP GDP is only ~$40k (USD). (US GDP is ~$48k). What this tells us is that Canadians earn a little more than Americans, but their REAL income is lower, because of higher prices. (perhaps BECAUSE of a lack of openness?)

(and btw: the news item was that Canadian per-capita WEALTH was higher than Americans. This is probably because the financial crisis didn’t hit Canada as hard as the US; the reason for this is probably better financial regulation… a whole different topic)

25 GiT July 22, 2012 at 10:04 pm

Actually, you don’t understand derek, and you agree with him.

Try reading this again:

“It could be argued the barriers that still exist in Canada to economic development are sectors that have protection from external competition. ”

Parse it. A possible retarding force on continuing economic improvement in Canada is the inefficiency of sectors that are protected from external competition, like telecoms.

26 Anon July 23, 2012 at 4:46 am

Hmmm…. I see your point GiT. I think you may be right. If I was mistaken in my first post, I apologize for the misunderstanding derek! I agree with you.

That’s what happens when you don’t read carefully enough.

27 Anonymous coward July 22, 2012 at 5:23 am

Still I can ask whether this [policy to be more responsive to the wishes of the poor and middle class] would be a desirable end. Aren’t they less educated and less well-informed on average? Don’t they also care about politics less and derive less of their status from political processes and outcomes? Do I want them to have a greater say over social issues, including gay marriage? No.
Gosh. Could it be that you are arguing against universal suffrage here?

28 Millian July 22, 2012 at 7:31 am

As Tyler Cowen would say, Mood affiliation!

Many good arguments for universal suffrage don’t depend on the correctness of the policy preferences of less-educated people. For instance, we could have a situation where politicians have free agency to be “policy entrepreneurs” within a certain range, constrained by the promise of defeat if they behave in an egregiously unacceptable manner, e.g. trying to establish an oligarchy. Low-information voters aren’t zero-information voters. They may be content to leave issue determination to people they believe to be better-informed, like politicians and the elite, except when they suspect that they are being outright screwed by the system.

29 Anonymous coward July 22, 2012 at 7:37 am

We could, but we don’t.

30 Dismalist July 22, 2012 at 9:04 am

John Stuart Mill suggested that voting rights be restricted to those who receive no government money. While the idea is attractive, it would be obtuse to implement nowadays: Is there anyone who does not receive government money?

31 Miley Cyrax July 22, 2012 at 1:43 pm

Don’t worry, as gleaned from gay marriage, just have the elites tell Obama to declare that he’s for or against their pet social issue of choice and a certain demographic of the poor and middle class will follow suit.

32 Art Deco July 22, 2012 at 6:16 am

Could it be that you are arguing against universal suffrage here?

Given that the term ‘middle class’ could apply to anyone from an impecunious office manager to a physician with a mortgage and an outstanding student loan, he would seem to be arguing for a suffrage about as extensive as that in the July Monarchy. (Just to see to it that the faculty get their way on ‘gay’ ‘marriage’).

33 Anonymous coward July 22, 2012 at 6:48 am

Professors, especially assistant and associate professors, are in general not very pecunious either. Obviously the qualification for suffrage has to be based on education. For instance, give one vote to anyone who is any kind of professor. I don’t know what the civil service equivalent of professor is, but we’d want to throw that in too. Or just set the qualification at a PhD? There are way more humanities PhDs than STEM PhDs, so we’d be quite safe from autistic libertarianism and worse things that can’t be mentioned in polite society.

34 Art Deco July 22, 2012 at 6:18 am

Evidently working people do not exist, either in the author’s imagination or the reviewer’s. All wage earners are ‘poor’, or whatever. (And they have no opinion on matrimonial law that bears respecting).

35 Charlie Day July 22, 2012 at 6:37 am

I read Gilens’ book, too. Afterward it made me realize why I shouldn’t read those types of books because they just make me angry with wealthy people. Hopefully someone will rise up again and organize another Occupy protest, and hopefully this guy will be the one leading the charge: http://lawblog.legalmatch.com/2012/07/20/your-right-strip-naked-airport/

Naked protest? Right on…

36 Alan July 22, 2012 at 7:13 am

The extremely wealthy have the purest of motives when they finance election campaigns.

37 Willitts July 23, 2012 at 12:29 am

The extreme wealthy vote overwhelmingly for Democrats.

The top campaign donors give overwhelmingly to Democrats.

Sort of ruins the meme, doesn’t it?

38 Ricardo July 23, 2012 at 3:51 am

Since these are unsubstantiated assertions of yours, I don’t see them ruining any meme until you provide citations.

Looking at the data, people with higher incomes are more likely to vote Republican and hold economically conservative views — see Andrew Gelman’s research. In 2008, 52% of people earning more than $200,000 per year voted for Obama compare to 46% who voted for McCain, according to CNN’s exit poll. I recall that Bush won the majority of votes in this demographic in 2004 but the New York Times’ historical exit poll data is not accessible right now.

As for campaign contributions, if we look at official campaign contributions (and not super PAC contributions, which might be more difficult to measure), Obama has raised more cash overall than Romney has but Obama’s contributions are in the form of small amounts money coming from a large number of people — half of his contributions in dollar terms came from people who contributed $200 or less. If we look at the total sum of money raised among those who contributed the maximum of $2,500, Obama has raised $47 million from these people (so about 18,800 “wealthy” donors responsible for one-fifth of his funds) compared to Romney having raised $66 million (over half of his funds) from about 26,000 such people.

39 Ryan July 22, 2012 at 8:27 am

You’re giving off more of the mad economist vibe than usual in this post.

40 asdf July 22, 2012 at 11:46 am

Academic libertarians are invested in a certain worldview. It is what they get paid for!

Facts on the ground are against it though, which is a problem. Most people who become libertarians really do like logic and evidence. So as new data begins to emerge that challenges their worldview it is difficult to ignore, but at the same time your paid to ignore it (publish the wrong opinion and watch your career go up in smoke). So you end up with lots of stuff like this.

41 celestus July 22, 2012 at 8:31 am

“Do I want them to have a greater say over social issues, including gay marriage? No.”

The left actually has a solution for this: remove social issues from the legislative/executive/state-level referendum process. Gay marriage is in fact a good example.

“It should take greater care to distinguish the preferences of the (often ill-informed) poor across means and ends. Say a poor or middle class person feels “I want tariffs” and also “I want prosperity.”…”

Well, or “I want health care reform” and also “I don’t want to be required to buy health insurance” if you want to get your point across to the left more effectively.

42 Rahul July 22, 2012 at 8:47 am

To me it seems hardly surprising that policy favors the rich. It has to be much easier to steer (bribe? lobby?) a policy maker with concentrated money than distributed votes.

43 Dismalist July 22, 2012 at 9:00 am

Redistribution in the US is wildly tilted toward the middle class. What country is the author talking about?

44 Ray Lopez July 22, 2012 at 2:38 pm

And not surprisingly, in France, where love of government is the norm, it was found that elites get more money from government than they pay in taxes, since they get well paid jobs from government. So indeed “democracy is the theory that the common people know what they want, and deserve to get it good and hard” – Mencken.

45 Ted Craig July 22, 2012 at 9:21 am

I wonder if this isn’t an issue of you get what you pay for. The countries where the wealthiest have the most influence (France, the U.S.) are also the countries where they provide the largest share of tax revenue. In Sweden and Denmark, the rich pay about half of the total taxes. That is still a lot, but ranks them at the bottom of Western nations.

46 Bender Bending Rodriguez July 22, 2012 at 6:21 pm

I’ve had a Swede explain that that’s a cultural issue. They understand that everybody has to chip in, and so they do. Anecdotally, he also mentioned that there’s a strong shame component to their culture. Workers will take jobs that pay less than social benefits because there’s a huge decrease in status to be seen in “being on the dole”.

47 Tracy W July 23, 2012 at 4:17 am

This is very interesting, what is your data source for this? Do you know of a convenient database online?
(I ask out of curiousity, and a desire to look at what other countries’ shares of taxes paid are like).

48 Ted Craig July 23, 2012 at 9:43 am

You can find data at NationMaster. Look under taxation, “contribution by…”

49 lemming July 23, 2012 at 6:51 pm

“The rich” are in this case the upper 30%. (NationMaster).

50 mw July 22, 2012 at 9:25 am

5. right which is why there’s no coherent theory of american democracy, because voting on outcomes is irrational if the majority party is not allowed to implement its policies after winning an election.

6. HAHA. the economist is going to argue against the moralizer that unlike rational agents, wealthy people act NOT in their self-interest, but in the interest of redistribution, because of their “education.” wonders never cease.

7. there is no theory of mind in which self-interested but uneducated poor people do a worse job advocating for their self-interest than self-interested and educated rich people will do advocating for the poor, which again goes against every rational agent model your discipline is built on. i think you’ve had too many nice dinners with smart wealthy people in expensive suits.

51 steve July 22, 2012 at 10:14 am

“5. Many lower- or middle-income voters decide to vote retrospectively over outcomes (mostly), rather than over policy inputs.”

Have not read the book. Is this substantiated or speculation? It sure helps to explain modern campaigning.

Steve

52 muirgeo July 22, 2012 at 11:22 am

” The elites then push through free trade to produce prosperity…..”

Wait…what? Are we talking real world or theoretically? And the idea that the poor will choose the worse policy seems refuted by a comparison of the “poor policies” post FDR linked to massive economic expansion with the Cato Institute post Reagan/Thatcher policy that finds us in this “free-trade prosperity”.

53 Aaron July 22, 2012 at 12:15 pm

> Wealthier voters are better educated and smarter, so they have a better sense of which policies will bring that about.

This is an important assertion, and I have no idea whether it is true. To even begin to measure its accuracy, you’d have to have some agreement on which policies are most likely to bring about prosperity. But several thoughts occur to me:

1. I spend virtually all my time among elites, and I’m often surprised at how naive or crude is their understanding of policy and politics. The same is absolutely true of non-elites, and I agree that elites generally have a more sophisticated view of policy. I don’t know whether it is a more accurate view.
2. Historically, both conservative and liberal elites have championed absolutely horrible policy. It is conceivable that the tails are fatter for distribution of elite opinion, with elites being in favor of both better and worse policies than non-elites.
3. Many studies have shown that smarter individuals are often much better at motivated reasoning. They apply their intelligence not towards discovering the truth, but toward justifying their priors.
4. Which way do real-world results point? A very strong case has been made that prosperity is both greater and more broadly shared when Democrats are in office. Conservatives have mounted various credible objections to this data, but probably it is safe to say that the evidence doesn’t point in the opposite direction. What does this suggest about elite policy preference?
5. There are various specific topics — for example, anthropogenic climate change — in which education levels and ideology combine to create a negative correlation with the correct understanding of the topic. (I’m referring to the scientific topic here, not policy, although it would be weird to describe a policy preference as sophisticated and informed if based on a demonstrably incorrect set of beliefs.) Similarly, even seemingly extremely sophisticated elites are distressingly susceptible to the same ideologically-drive conspiracy theories that drive “the masses.”

It does seem plausible that smarter, wealthier people favor better policies than non-elites, and yet it’s not at all clear to me that this is true in practice. I suspect a more accurate description is that elites and non-elites are distinct interest groups, and better policy is achieved through some balance of their respective preferences.

54 John David Galt July 22, 2012 at 1:10 pm

Point 7 seems to me exactly backwards. The poor often derive most of their income from the political process through welfare and similar programs. Therefore, any opinion they express should be automatically flagged as coming from a likely conflict-of-interest.

The same, of course, goes for all government employees and officials, and all academics whose work is funded by government grants.

55 GiT July 22, 2012 at 4:09 pm

If we’re concerned about people who derive most of their income from the political process, then first against the wall should be anyone who works for a military contractor, yes? Followed by agriculture, of course. And then we can move on to poor people, who receive less, on average, than your typical subsidized farmer. And if we’re disenfranchising public employees, then the military seems like a good first place to cut out the franchise.

56 Joe Smith July 22, 2012 at 7:24 pm

You left out the Wall Street banks who get a large effective subsidy from the explicit guarantee of deposits and implicit guarantee of their commercial paper.

57 tt July 23, 2012 at 10:25 am

and oil companies.

58 GiT July 24, 2012 at 12:46 am

I wonder who will be left once the rolls are culled. Who is pure enough to vote in libertariantopia?

59 Joe Smith July 22, 2012 at 3:47 pm

Tyler – do you fundamentally believe in Democracy? This post suggests that you do not.

Since you feel that the top 10% better understand the way the world works would you favor a constitutional amendment that if the US ever re-instates the draft that the sons and daughters of the top 10% will be taken first – since they have the greatest stake in the outcome?

60 Parke July 22, 2012 at 5:36 pm

Tyler, thanks for this interesting post. I think it’s great to see you covering the political power of the rich in U.S. governance, and the weakening power of the poor and lower middle income. I like Mary Jo Bane’s work on this theme. Is this is a neglected topic on this blog? In #4 and #6 I can almost hear you being tempted by an anti-democratic elitist vision of government (which I think some of your GMU colleagues may favor?), but perhaps you will stare hard at the implications and turn away. The American founders considered these issues long and hard, finally choosing a mixed democratic and representative constitution. For many of the economic issues this blog addresses, it is important to have free markets and inequality — and perhaps even tolerable to have some inequality in political power — and yet a reasonable person may ask if there is a limit.

61 DK July 22, 2012 at 10:49 pm

if I simply assumed the author wanted policy to be more responsive to the wishes of the poor and middle class. Still I can ask whether this would be a desirable end. Aren’t they less educated and less well-informed on average? Don’t they also care about politics less and derive less of their status from political processes and outcomes? Do I want them to have a greater say over social issues, including gay marriage? No.

One of the rare posts where Mr Cowen lets through what he really thinks: The poor are too stupid to know what’s good for them and smart elites should not pay any attention to their desires.

Not so uncommon notion from libertarians. Frequently I feel that had Tyler and his ilk ever gotten their hands on real political power, Khmer Rouge’s social engineering would appear a walk in paradise in comparison to what they would eventually end up with. Deep inside, these intellectuals are nothing but maniacal despots.

62 GiT July 22, 2012 at 11:29 pm

“Don’t worry, you’ll be safe. I’m not like all the other technocrats, you see; I’m a libertarian technocrat. We’re different; I swear it.”

63 Urso July 23, 2012 at 11:31 am

Yes, Tyler is just a Pol Pot in waiting. All those SE Asian restaurants he visits must have been serving him curry with a side of revolutionary political theory.

64 Tom July 22, 2012 at 11:33 pm

I’ll take the interests of the lower and middle class over the Koch brothers any day.

65 CEGA July 23, 2012 at 11:02 am

This recent paper deals with some of the issues raised so far; basically, why is that redistribution is relatively lower than you would expect given the levels of inequality around the world.
http://www.iadb.org/en/research-and-data/publication-details,3169.html?pub_id=IDB-WP-282

This paper argues that the details of political institutions help explain the low levels of personal income taxation. In particular, legislative malapportionment enables rich elites to exercise disproportionate political influence. Because over-represented districts tend to be dominated by parties aligned with the elite, these groups can block legislative attempts to introduce progressive taxes. Using a sample of more than 50 countries (including 17 across Latin America) between 1990 and 2007, this paper finds that i) countries with historically more unequal distributions of wealth and income systematically present higher levels of legislative malapportionment, and ii) higher levels of malapportionment are associated with lower shares of personal income taxes in GDP.

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