Buttonwood’s notebook | Democracy

Ignorance is strength

If we put more issues to the public directly, shouldn't they be more informed?

By Buttonwood

IT IS hard not to be amused (as well as depressed) at the survey that asked Americans to place Ukraine on a map (the median guess was 1,800 miles out). Let me say, right off the bat, that I am not sure Britons would have been any better informed (or Brazilians, Indians and Chinese, for that matter). One also suspects that some respondents were pulling the researchers' legs (placing Ukraine in Greenland, Australia or under the ocean?). The most depressing finding was that the less accurate respondents were the most bullish about American intervention.

Part of the problem is the trait of overconfidence, much explored by behavioural-finance academics. We all think we are better drivers than average, have an above-average sense of humour and so on; this self-belief may be quite useful in persuading us to start businesses, or indeed get out of bed each morning. When it comes to our ability to process information, however, we can be hopelessly wrong. This is often shown by tests which ask us to estimate a high and low range for a number (eg the number of atoms in the universe) with 90% confidence; rarely are 90% of the estimates within the range. For example, if the Dow (which started at 40 in 1896) had been calculated with all dividends reinvested, what would have been its value at the end of 1998? What's your high and low estimate with 90% confidence? (The answer is at the end*; try not to cheat.)

This issue creates a problem for those of us who believe that democracy needs reform. One much-touted answer is to hold more referendums. But these can run into the kind of special-interest problems detailed by Mancur Olson; those with most to gain (or lose) will campaign hardest (and spend more) for measures which spread the cost widely among voters. Electors may also have little incentive to become informed because it is highly unlikely that their individual vote will make a difference to the result. And they may vote in a way that does not pertain to the issue at hand; if Britain does hold a vote on leaving the EU in 2017, the result may be driven as much by the popularity of the government in power as it will be by the underlying issue.

Another example of misinformation is the foreign-aid budget. A Worldpublicopinion survey in 2010 found that, asked for their estimate of the proportion of the US budget spent on foreign aid, the median guess was 25%; when asked what would be a reasonable proportion, the median opinion was 10%. The actual proportion was 0.6%. So most people think that the proportion of foreign aid is way too high but the actual number is lower than what they think would be reasonable (it may be that the two guesses are mutually dependent; people say 10% because they want the budget to be halved from what they believe it to be. Still, there is a lot of leeway).

What could be the answer? Public education is an option, starting at school with much more detailed civics lessons, and we could create an electoral commission that would be obliged to send out a one-page list of the data to all potential referendum voters. But this sounds a bt like forcefeeding toddlers spinach; you can't make adults read stuff. And the poor old teachers would find themselves besieged by enraged parents, complaining of political bias.

* 652,230. Most people guess too low

Discover more

So long, farewell

Three worries and three signs of hope in the final blog post

The flaws of finance

The sector is essential to the economy. But it is rewarded too highly and imposes wider social costs. The penultimate in a series of farewell blogs


Hope I save before I get old

Although we will probably spend 20 years or more in retirement, we don't think about it enough. The third in a series of farewell blogs