Libertarianism as a Utility Smoothing Strategy
This fascinating paper by Di Tella and MacCulloch shows that the simple fact that one’s favored political party is in power has a big effect on happiness:
A surprising finding of the paper concerns the relative importance of politics. We include in our partisan happiness equations a variable that measures the ideological position of the government in power. It indicates that when the government leans more to the right ideologically, right-wing individuals tick up their happiness scores. In the same periods, left-wing individuals declare themselves to be more dissatisfied with their lives. The size of the coefficient is large and highly significant. A right-wing individual living under Mitterrand would be willing to put up with an increase of 11 percentage points in the inflation rate in order to see Margaret Thatcher take charge of the government. One possible explanation for this result is that there are other policies, not linked to macroeconomics in nature, along which governments differ and that our analysis ignores. These could include agricultural policy, the approach to fighting crime, the policy on abortion and other social issues, etc. But another possibility is that politics enters directly into the utility function (or that people simply care about winning). Furthermore, the variable capturing the ideological position of the government (Right Wing Government) is strongly correlated with inflation (negatively) and unemployment (positively). Thus, there seem to be two channels through which governments affect the well-being of their constituencies: a direct channel and an indirect effect through unemployment and inflation. Our results indicate that the color of the government matters for a large part of the population. [emphasis added]
My favorite hypothesis is that coalitional success enters directly into the welfare function. Now, this is fascinating for all sorts of reasons. For instance, it would seem, then, that the need to maintain a distinct and coherent coalitional identity will limit median-voter convergence. It also implies weird things for utilitarians who insist on maximizing relative to current preferences. If the utility hit to rightwingers out of power, for example, is greater than the utility to hit to leftwingers out of power, then, other things being equal utility-wise, it could turn out that a rightwinger minority should be put in power over a leftwinger majority. The general application of this kind of thinking is that partisans will try to convince their side that being out of power is really depressing, with the result that no matter who is in power, half the population is really depressed.
But let me instead point out a picayune possible implication for libertarians. People apparently like unemployment insurance because we tend to prefer that our income changes in a relatively smooth way, rather than suddenly and drastically. Could libertarianism be a utility smoothing individual political strategy. You’re never in power, but then you’re never out of power either. No ups, no down, no anxiety about the next raise always around the corner. In a world of partisan volatility, libertarianism is a kind of insurance against hedonic swings from politics. Whether this leaves us better off on net is an open question.
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It can go either way. I know a lot of libertarians that are generally pretty happy, and a lot that are generally pretty grumpy, but I think you’re right that libertarians tend to be more constant in their attitudes than political partisans.
Why only libertarianism? Any third party in the U.S. would meet your criterion. The better solution is NON-PARTISANISM!
Here’s my personal preference ordering for a party system:
zero parties: awesome
many parties: okay
2 parties: yuck
1 party: absolute disaster
I’d recommend that preference ordering to anyone.
Isn’t it interesting how libertarianism is a party with out a party, except of course for that stupid party. But they are a potent ideological faction, especially with blogs like this one.
Interesting post and paper. By the way, are we going to see a CATO article or policy-brief come out of this research on happiness that you’re doing?
What happened to that preference-changing strategy you were advocating a few posts ago?
Maybe people should just switch their preference to whoever is, or is most likely to be, in power?
If that sounds stupid, well, I think it is. Just as is any talk of choosing your party based on its prospects for victory. Although, I know that many people do this, or something like it.
It makes sense to be happy when your party is in power because you think that they are furthering your values, and you expect these values to make things better. It’s happiness about this, not the party being in power, that should be making you happy.
Gil, That’s right! If you were a committed utilitarian, maybe you SHOULD switch. Now perhaps utilitarians can give some account of the utility-enhancing properties of maintaining a coherent ideological identity over time. But most of us, I think, like the idea of integrity and intellectual honesty, whether or not it costs a few hedons.
I should mention, that I wasn’t actually advocating the preference-altering strategy. All I was saying is that a utilitarian who understands Coase probably should be.
Looking at the study, it looks like an opposing party implementing one’s favored policies doesn’t do much to make you feel better. So it does look like people like being on the winning team, and actually policy is incidental. Which is why, I suppose, the huge government travesty that is the Bush adminsitration, is nonetheless beloved by the faithful.
Also, it might not be so much that your guys are in power, but that the other guys aren’t.
Everybody knows that we’re much better off with the Stupid Party than with the Evil Party.
Boy oh boy does utilitarianism get a bashing on this blog! Surely Will knows that utilitarianism is not identical with Bentham’s hedonism, but you wouldn’t guess it from reading his “discussion” with De Long. Ironically, Mill is both the main defender of Julian’s thesis that we benefit from being able to make mistakes and a utilitarianism. Of course, one can plunk for the view that, for example, being able to choose to smoke is good even if having such choices does not ultimately redound to the individual’s or society’s benefit. But I for one think that the Millian position will be more convincing to most people.