View source for “Public” choice

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{{DES | des = [[Henry Farrell]]'s savage takedown of the blindness, ideology, and biases of [[Public Choice Theory]]. | show=}}
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An addendum to my earlier post, to explain more directly why I am skeptical of the argument that public choice is a useful lens to understand the politics of the public during coronavirus. Shorter version: if the “public” is indeed some kind of equilibrium, then the underlying game is unlikely to be the kind of game that public choice scholars like to model.

As best as I can tell, the “public” that public choice scholars are talking about is an equilibrium in some underlying game, the nature of which isn’t fully specified anywhere that I’ve seen (perhaps I’ve missed it; or I’m looking in the wrong places). The argument seems to be that the ‘stay at home until things get safer’ equilibrium is fragile, or perhaps non-existent, and destined to be overwhelmed when everyone opts for ‘get back into the real economy.’

It may be that this prediction turns out to be empirically right. But the question for me is not what the equilibrium is, but what the underlying game is. When someone tells me to “solve for the equilibrium” (as if it is obvious to someone with a minimal understanding of economics), I am usually more interested in (a) solving for the model that they presume is self-evident, and (b) trying to solve for the question of whether there are other models, which may tell us different things or capture better the logic of what is happening. This is especially pertinent here, because the public choice approach tends to prefer models that I suspect are particularly unlikely to be helpful in understanding key aspects of the public’s reactions to coronavirus.

Why is public choice specifically unhelpful here? Rather than starting from the many definitions of public choice offered by its enemies, I’ll begin with the definition provided by one of its major proponents. As described by the late Charles Rowley, longtime editor of the journal Public Choice, the public choice approach is a ““program of scientific endeavor that exposed government failure coupled to a programme of moral philosophy that supported constitutional reform designed to limit government.” In other words, it is not a neutral research program, but one that has a clear political philosophy and set of aims. Bluntly put, it starts from governments bad, markets good, and further assumes that the intersection between governments and markets (where private interests are able to “capture” government) is very bad indeed.

This is useful for understanding some aspects of politics. It turns out that government officials can indeed be self-interested, and that government programs can be captured by their constituents. There is there is some intellectual crossover between public choice and e.g. Theda Skocpol style historical institutionalist accounts of government agency-client relations, even though they have very different valences. Furthermore, the fact that public choice has an associated political program doesn’t mean that it is necessarily bad. There is an interesting affinity between public choice and Marxism, another analytic approach with an associated political program. Both agree on the awful things that can happen when government and business interests are in cahoots, even if each sees a different party as the serpent in its paradise.

However, it does mean that there are some questions that it is going to be systematically weak in addressing. In particular, public choice notoriously tends to define questions of private power out of existence, treating them as freely entered contracts that hence reflect the interests of the contractees. This is why Mancur Olson accused his public choice colleagues of “monodiabolism” and an “almost utopian lack of concern about other problems” than the unrestrained state. Public choice economists tend to wave away private power as being irrelevant to the understanding of outcomes, except when it acquires the additional force of state coercion.

And this is why it’s a terrible starting point for understanding the public response to coronavirus. As the XKCD cartoon above shows, the evidence from public opinion polling is emphatic. People – with the exception of a small minority – are in favor of stay at home orders, and closed schools and non-essential businesses. It could be that people are lying to the pollsters because of social acceptability bias – but it would be unprecedented for so many of them to be lying. I haven’t seen any public choice people confront this evidence head on – instead, they try to move the conversation to other forms of evidence (movement data from phone companies) that is more ambiguous and arguably more congenial to their arguments. This is not a particularly convincing rejoinder. If there is an instance of democratically legitimate coercion, then stay at home orders are it. Presumably, people don’t want to stay at home forever – but a very large majority of them don’t believe that it’s safe to go out, and they strongly approve of government obliging people to stay indoors minimizing the risk.

So why then, may the equilibrium break down? It’s clearly not because of express demand from the public. Nor because of cheating (some people may want to free ride, even when the potential rewards include getting sick and dying, but it’s hard to see how they are a majority, or can create one).

The plausible answer is that private power asymmetries are playing a crucial role in undermining the equilibrium. Some people – employees with poor bargaining power and no savings – may find themselves effectively coerced into a return to work as normal.

Some illustrative evidence of how, if you’re not lucky, your employer’s power over you may very literally be the power of life and death.

Rafael Benjamin, 64, who worked at Cargill Inc.’s pork and beef processing plant in Hazleton, Pa., told his children on March 27 that a supervisor had instructed him to take off a face mask at work because it was causing unnecessary anxiety among other employees. On April 4, Benjamin called in sick with a cough and a fever before being taken to the hospital in an ambulance a few days later. He spent his 17th work anniversary at Cargill on a ventilator in the intensive care unit and died on April 19.

So why don’t you just demand safe working conditions? Perhaps you’re an undocumented immigrant who fears retaliation:

I go, and I come back, tested positive, I’ll give it to my children. And my whole family will be affected. So I’m really, really scared.

PAYNE: Like the other workers we spoke with, she fears retaliation. She says she worked shoulder to shoulder in the plant, which processes almost 20,000 hogs a day.

Or perhaps Trump has declared that your meatpacking plant must stay open as critical infrastructure and limited its legal liabilities.

Maybe then you should just quit your job? Perhaps not, if you want to be able to put food on the table:

As Ohio begins to ease restrictions and reopen its economy, the state is inviting employers to report employees who don’t show up for work out of concerns about the coronavirus for possible unemployment fraud. This means that workers who stay home because of concerns about unsafe conditions at work may be investigated and potentially stripped of unemployment benefits.

There is now a form on the Ohio Department of Job and Family Services website for employers to confidentially report employees “who quit or refuse work when it is available due to COVID-19,” flagging them for the state’s Office of Unemployment Insurance Operations

NB that this is certainly a situation where the state and private actors are looking to get into cahoots, but not in the ways that public choice economists have devoted significant analytic energy to. And if you want an illustration of Marxist arguments about the “structural power of capital” to threaten politicians through its investment decisions, you could hardly do better than Elon Musk’s efforts to force through the reopening of his factory against the law.

Where public choice people seem to perceive a “public” that collectively wants to return to work, I see something different – a set of asymmetric power relations that public choice scholars are systematically blind to in the ways that Chris, Alex Gourevitch and Corey identified eight years ago, when they wrote about “bleeding heart libertarians” (a constituency that strongly overlaps with public choice). It could of course be that I’m wrong. Perhaps indeed mobility data is a better indicator of people’s actual wants than what they say when they are asked by pollsters.

So here’s my bet. If the public choice analysis is right, and this is about some kind of broad and diffuse “public” pushing back against impossible regulations, then we will see a return to the economy sooner rather than later. But we can reasonably presume that this return will be roughly symmetric. People in general want to go back to work, they are voting with their feet to go back to work, and it’s just lefties and handwringing left-liberals who are oblivious to this.

In contrast, if I’m right, we will see a very different return to “normality.” The return to the economy will be sharply asymmetric. Those who are on the wrong end of private power relations – whether they are undocumented immigrants, or just the working poor – will return early and en masse. Those who have the choice and the bargaining power will tend instead to pick safety. They will be less likely to return to the workplace when they can work from home, they will go back later when they do go back, and when they do return to the workplace, they will make radical demands for changes that protect them.

You might object that this is an unfair bet, because it’s obvious that I’m picking the side that is going to win. That’s actually the point. Exactly because it is so obvious, it highlights the frequently brutal power relations that public choice scholars shove under the carpet when they talk about the “public” wanting an end to lockdown and a return to past economic relations. Intellectual programs that are designed from the ground up to assume government failure and private efficiency are terribly suited to understanding how many private relationships in fact work. There are places where public choice can be helpful in understanding aspects of the coronavirus response. Perhaps you might, e.g., apply it to the relationship between drug companies and regulators, and the ways in which intellectual property rules might hurt the search for a vaccine. That might or might not be helpful. But what is not helpful is its application as a theory of why “the public” is resisting a set of measures that the evidence suggests are actually highly popular with the public. Here, it’s more likely to mystify than to clarify.
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