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Jewish World Review July 25, 2001 / 5 Menachem-Av, 5761

Walter Williams

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Rational ignorance -- WHILE people might be motivated by non-economic factors, from a strictly economic point of view it simply doesn't pay individual voters to learn about and take action against the myriad assaults emanating from the political area. That's what my colleagues at George Mason University's Economics Department predict: Rational ignorance pays. Politicians know this and exploit it to the hilt.

To gain a fuller understanding, we must disabuse ourselves of our high-school civics lessons, where we're led to believe that when people assume political office, or receive bureaucratic appointments, they're somehow a changed person and motivated by the public interest. No such thing happens. When a person becomes a politician or bureaucrat, he's still motivated by self-interest, he's simply in a different market with different restraints. Buyers in that market seek favors and privileges from government. Politicians are suppliers of those favors and privileges -- and the prices are campaign contributions and votes.

Public choice theory, developed by George Mason University Professors Gordon Tullock and James Buchanan, recognizes that the probability of any voter's ballot making any difference in the outcome of any election, including last year's Florida election, is essentially nil. In other words, the only way my vote changes the outcome of an election is if my vote breaks a tie, and the probability of a tie is close to zero.

Politicians exploit rational ignorance by conferring large benefits on certain constituents whose costs are widely dispersed and borne by the general population. Take the sugar industry.

It pays the owners and workers to organize and tax themselves to raise money to lobby Congress for tariffs on foreign sugar. If they're successful, it means millions of dollars in higher profits and wages. Since they are relatively small in number, the organization costs are small and the benefits are narrowly distributed. The Fanjul family, who owns large sugar farms in the Florida Everglades, capture an estimated $60 million annually in artificial profits.

What about the costs? As a result of price supports and import restrictions, millions of American sugar consumers pay a few dollars more per year for the sugar we use. The U.S. General Accounting Office estimates that Americans pay between $1 and $2 billion a year in higher sugar prices.

Forget about finding out and doing something about these costs. After all, how many of us are willing to board a plane or train to Washington to try to unseat congressmen who made us pay $5 more for the sugar we bought last year? It's not worth it; it's cheaper just to pay the $5 and forget it. For workers and owners in the sugar industry, it is worth it to descend on Washington to try to unseat congressmen who refuse to support restrictions on foreign sugar.

It's worth $1 billion or $2 billion to them, and who do you think congressmen will listen to: your complaining about higher sugar prices or the sugar industry complaining about foreign imports keeping their prices, profit and wages down?

You say: "What's the grief, Williams? Five dollars won't kill you." Washington is home to thousands of business and labor union lobbyists looking for a leg up here and a handout there.

After a while, $5 here and $4 there adds up to real money. According to some estimates, restrictions of one kind or another cost the average American family $5,000 to $6,000 a year in higher prices.

What to do? I'm stuck for an answer other than to naively suggest that we should force congressmen to live up to their oath of office. Doing so would stop them from doing most of what they do today.

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© 2000, Creators Syndicate