Selfishness, Greed and Capitalism

Selfishness, Greed and CapitalismRational consumers and irrational votersCritics of free markets believe that they have spotteda contradiction between economists’ belief in rationalindividuals in the marketplace and irrational individualsin a democracy – a paradox satirically characterised byone commentator as ‘everyone is rational, except policymakers’(Quiggin 2010: 107). At first glance, this seems tobe as incoherent as socialists’ faith in rational governmentand irrational markets. Why would a rational consumersuddenly become irrational when he enters a voting booth?The answer is simple and, like so much economics, itcomes down to incentives. Voters have little incentive to beknowledgeable about politics and – crucially – can affordto be wrong. A single vote almost never decides an election.The individual can cast his vote in the near-certain knowledgethat it will make no difference to the result. He hasscant incentive to vote at all, let alone to read up on eachand every policy the candidates claim to stand for. Manypeople do vote, of course, perhaps out of a sense of duty orto express themselves, but the opportunity cost of votingis trivial – a few minutes going to the polls or filling out apostal vote 5 – whereas the effort required in mastering theissues is enormous. An ill-informed decision at the ballotbox has practically no private cost to the individual. Even5 Despite this, evidence suggests that many people do not place agreat value on their vote. More than a third of registered votersdid not cast a ballot in the last UK general election. The fact thatbad weather reduces voter turnout implies that some people thinktheir vote is worth less than a relatively trivial opportunity cost.34