When the Nile does not flood, kill the pharaoh

the AZEL PERSPECTIVE Commentary on Cuba's Future, U.S. Foreign Policy & Individual Freedoms - Issue 198`

When the Nile does not flood, kill the pharaoh Share Tweet Forward

The yearly flooding of the Nile, the result of enormous precipitation on the Ethiopian Highlands, has been a critical natural cycle in Egypt since ancient times. The floods were then seen as the annual coming of the gods and the pharaoh’s responsibility.  Thus, when the Nile does not flood, it is rational to kill the pharaoh. Today, we think similarly regarding our elected officials, particularly the President. Economist Bryan Caplan explores this topic in his book “The Myth of the Rational Voter,” subtitled: “Why democracies choose bad policies.” Professor Caplan contends that voters are irrational when it comes to economic policies, and often support, under false beliefs, “feel good” policies, such as protectionism and a minimum wage, that are demonstrably harmful to most people. Caplan introduces his work with a delightful passage attributed to Adlai Stevenson: While campaigning in Illinois a supporter called out, “Governor Stevenson all thinking people are for you!” To which the witty Stevenson replied, “That is not enough.  I need a majority.” Thinking people may be a minority, but it appears that democracy can function relatively well, even under a great scale of voter ignorance due to the “Miracle of Aggregation.” In the United States, about half of Americans do not know that each state has two senators, and three-quarters do not know the length of their terms. Over half cannot name their congressman, and 40% cannot name either of their senators. Yet, although democracy gives equal say to the informed and the not-so-well informed, the informed end up determining policy due to the Miracle of Aggregation. The Miracle of Aggregation works something like this: in an electorate with 100% well-informed voters, the majority wins. Now, imagine an electorate where 99% of the voters are not-so-well informed and will vote randomly, and only 1% is well-informed. In a large electorate, it is basic statistics that each candidate will get about half of the not-so-well informed who vote randomly. That is, each candidate will get about 49.5% of the not-so-well informed vote. And the winner will be the candidate that can attract the majority of the 1% well-informed vote. According to the Miracle of Aggregation, a 99% ignorant electorate ends up with the same elected candidate as a 100% well informed electorate. However, the Miracle of Aggregation begins to break down when voters have developed systematically biased ideas. According to Professor Caplan, this is the case concerning economic policy; voters base their policy preferences on a deeply mistaken understanding of economics. Accordingly, the greatest obstacles to sound economic policy are not powerful special interests or lobbying. Rather, misguided economic policy is due to the voter’s economic misconceptions, irrational beliefs, and personal biases. Caplan offers the interesting example of migrants. Citizens of poor countries are often eager to migrate to rich countries. Yet, at home or in their new country, they rarely vote for parties that pledge to implement the economic policies that made the rich countries rich.   One popular economic error is the anti-foreign bias defined as: “a tendency to underestimate the economic benefits of interaction with foreigners.” We systematically see our country as in a trade war with other nations. We fail to comprehend the economic principle of “comparative advantage” that allows countries to benefit from trade even if one country has significant advantages in production costs. The degree of benefit realized by each country will not be equal, but it is always positive for both parties.  (Granted, having taught “comparative advantage” to university students I can appreciate that the topic is counter-intuitive). Often, the anti-foreign trade bias can be rooted in ethnic biases. For example, for Americans trade imbalances with Japan or Mexico appear more troublesome than trade imbalances with ethnically similar nations like England or Canada. As voters, we elect politicians who share our misinformed economic biases. The result is that bad economic policies, such as protectionism or a minimum wage, continue to prosper by popular demand. Perhaps when the Nile does not flood, we should spare the pharaoh and revisit our economic beliefs. Please let us know if you  this article. We welcome your feedback. Abrazos,  Lily & José  (click on the name to email Lily or Jose) José Azel, Ph.D. José Azel left Cuba in 1961 as a 13 year-old political exile in what has been dubbed Operation Pedro Pan - the largest unaccompanied child refugee movement in the history of the Western Hemisphere. He is currently dedicated to the in-depth analyses of Cuba's economic, social and political state, with a keen interest in post-Castro-Cuba strategies. Formerly, a Senior Scholar at the Institute for Cuban and Cuban-American Studies (ICCAS) at the University of Miami, Jose Azel has published extensively on Cuba related topics. In 2012 and 2015, Dr. Azel testified in the U.S. Congress on U.S.-Cuba Policy, and U.S. National Security.  He is a frequent speaker and commentator on these and related topics on local, national and international media.  He holds undergraduate and masters degrees in business administration and a Ph.D. in International Affairs from the University of Miami. José along with his wife Lily are avid skiers and adventure travelers.  In recent years they have climbed Grand Teton in Wyoming, trekked Mt. Kilimanjaro in Tanzania and Machu Pichu in Peru.  They have also hiked in Tibet and in the Himalayas to Mt. Everest Base Camp. They cycled St. James Way (El Camino de Santiago de Compostela) and cycled alongside the Danube from Germany to Hungary. They have scuba dived in the Bay Islands off the Honduran coast and in the Galapagos Islands. Their adventurers are normally dedicated to raise funds for causes that are dear to them.  Watch Joe & Lily summit Kilimanjaro. Books by Dr. José Azel "Liberty for beginners is much more than what the title promises. It is eighty themes touched with the wisdom of a master, and the charm of an excellent communicator. Anyone that wishes to understand why countries do, or do not progress, will find in this book the best explanations. If it was in my power, this work would be required reading for all college and university students, and I would recommend its reading to politicians, journalists, and policymakers. With this book Azel accomplishes what was achieved in France by Frédéric Bastiat, and in the United States by Henry Hazlitt: brings together common sense with intelligent observation, and academic substance. Stupendous" Carlos Alberto Montaner Buy Now "Libertad para novatos es mucho más de lo que promete el título. Son ochenta temas tocados con la sabiduría de un maestro y la amenidad de un excelente comunicador. Cualquier adulto que desee saber por qué progresan o se estancan los pueblos aquí encontrará las mejores explicaciones. Si estuviera en mis manos, esta obra sería lectura obligatoria de todos los estudiantes, tanto de bachillerato como universitarios, pero, además, se la recomendaría a todos los políticos y periodistas, a todos los policy makers. Azel logra con este libro lo que Frédéric Bastiat consiguiera en Francia y Henry Hazlitt en Estados Unidos: aunar el sentido común, la observación inteligente y la enjundia académica. Estupendo." Carlos Alberto Montaner Compre Aqui In Reflections on Freedom, José Azel brings together a collection of his columns published in prestigious newspapers.  Each article reveals his heartfelt and personal awareness of the importance of freedom in our lives.  They are his reflections after nearly sixty years of living and learning as a Cuban outside Cuba. In what has become his stylistic trademark, Professor Azel brilliantly introduces complex topics in brief journalistic articles. Buy Now En Reflexiones sobre la libertad José Azel reúne una colección de sus columnas publicadas en prestigiosos periódicos. Cada artículo revela su percepción sincera y personal de la importancia de la libertad en nuestras vidas. Son sus reflexiones después de casi sesenta años viviendo y aprendiendo como cubano fuera de Cuba.  En lo que ha resultado ser característica distintiva de sus artículos, el Profesor Azel introduce con brillantez complejos temas en  breves artículos de carácter periodístico. Compre Aqui Mañana in Cuba is a comprehensive analysis of contemporary Cuba with an incisive perspective of the Cuban frame of mind and its relevancy for Cuba's future. Buy now Pedazos y Vacíos is a collection of poems written in by Dr. Azel in his youth. Poems are in Spanish. Buy now

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