Jim began our discussion by wishing me a happy new year and asking whether I had made any resolutions. I told him that I had not had much success in keeping new year’s resolutions, so there wasn’t much point in making them. Jim then offered to make some resolutions for me and to help me to keep them, but I declined. Undeterred, he said: “You should resolve to come to grips with some of the issues that you have been ducking in your blog, such as the question of whether you are in favour of free banking.” I replied that I knew very little about monetary policy and was quite content to leave that to the experts.
Jim replied: “So you think that the experts in control of monetary policy in the U.S. and other major economies have been doing a good job over the last few years do you? I suppose you think that the problems that voters have in coming to an understanding of complex issues can be resolved by just handing the problem over to the experts.” (Our previous discussions concerning the nature of this problem and Bryan Caplan book, “The Myth of the Rational Voter”, can be found here.)
I responded that I was certainly not in favour of leaving everything to experts, but I thought the world would be faced by even bigger financial problems if populist politicians were set loose to introduce ‘funny money’ policies. I put forward the view that as a general rule we get better outcomes when politicians focus on setting broad policy goals and put in place processes that ensure that expert opinion is brought to bear on how those goals should be achieved.
Jim was not as impressed as I thought he should have been. I suspect he might have been wondering how current monetary policies actually differ from the ‘funny money’ policies that might be introduced by populist politicians. He asked: “Doesn’t this Caplan fellow have any useful suggestions about how to improve public understanding of issues? What solutions does he offer?”
When I mentioned Caplan’s argument that more decisions should be left to the market rather than brought into the realm of political decision-making, Jim said: “That’s shutting the stable door after the horse has bolted”. I tried to explain that this comment was not entirely appropriate because there was an ongoing tendency for voters to say “the government should do something about it” every time a problem arose and for governments to respond by introducing more regulation.
Jim just asked what else Caplan had proposed. So, I mentioned that we had already discussed one of Caplan’s proposals, namely that economists should do more to combat economic sophistry espoused by politicians and voters.
“Is that all he suggests?”, Jim asked. Then, with some reluctance, I mentioned Caplan’s proposal to reduce efforts to increase voter turnout on the grounds that the additional people who are encouraged to vote are less likely to understand complex issues. Jim just said, “Harrumph!”.
One of the few things I have learned through life is that when someone makes unreasonable noises about another person’s ideas and you try to defend those ideas, you are likely to end up trying to defend the indefensible. So, I just remained silent.
Eventually, Jim said: “I have been reading some of the stuff on your blog about the role of transparency procedures in improving public understanding of issues. I would like to talk more about that later. Meanwhile, make sure you wish readers of your blog a happy new year”.
HAPPY NEW YEAR!