Our ‘public choice’ problem in Canada and the United States

Public choices are weird. After an election like no other, Donald Trump is returning to the White House. Now the interpretation begins.

Did voters reject Biden’s inflation or endorse Trump’s promise to deport millions of people? Did they hope to extend the Trump tax cuts of 2017? Or maybe they like Trump’s plan to impose new tariffs, which are taxes at the border?

Did they say no to Harris’s grocery price controls, or yes to Trump’s credit price controls?

Though pundits will spend the next several weeks trying to decipher what voters were saying, the truth is we can never know. That’s because it’s nearly impossible to decode a person’s public choices, let alone an entire electorate’s public choices.

A “public choice” is any decision a person makes to try to influence society-at-large. When you donate to a campaign or lobby your local elected official or cast a vote in an election, you’re making a public choice. There’s an entire field of economics devoted to the study of public choices. And perhaps the best way to sum it up is this: public choices are weird.

To see how, consider a mostly private choice and imagine what would happen if we turned it into a public choice:

Imagine you need a new mattress. You look at your budget, you do your research, and you decide on brand D. But there’s a problem. Since this is now a public choice, you must wait four years before you’re allowed to switch mattresses. And when you do switch your mattresses, it isn’t the only thing you must switch.

That’s because brand D isn’t just a mattress dealer. They also sell socks, tires and insurance. If you want Brand D’s mattress, you must also buy its tires and cereal.

But none of this really matters because your decision will not actually affect whether you get Brand D’s products or not. Well, it might affect whether you get them, but only if tens of millions of other mattress/cereal/sock/tire/insurance buyers are deadlocked between Brand D and Brand R. And the odds of that happening are lower than the odds of getting struck by lightning.

Given the vanishingly small chance your public choice will affect the outcome of the election, you have little reason to do your homework, to carefully compare the durability of Brand D tires or the customer service record of Brand R insurance. Nor are you likely to critically evaluate the information you do gather. Instead, you’re likely to make your choice in much the same way as you choose your favourite hockey team; through some vague combination of instinct, past loyalty, branding and pure emotion.

But it gets weirder. If mattress selection were an entirely private choice, you alone would pay the price of a mattress and you alone would reap the rewards of a good night’s sleep. With private choices, you have an incentive to carefully weigh the costs and benefits of your decision. You’ll pass on a $1,200 mattress if you think it’ll offer you only $300’s worth of value.

But if mattress selection were a public choice, you could seek a public subsidy and pass most of the cost onto your neighbours. To do this, however, you’d have to be well organized, with an effective lobbying strategy and plenty of money to spend on campaign contributions. Most of us wouldn’t know how to pull this off. But you know who does? Mattress manufacturers. This spring in the United States, the industry’s lobbyists managed to obtain a 744 per cent tariff on foreign mattresses (no kidding, that really happened). Thanks to their public choice, Americans will be getting worse sleep.

If public choices are so weird, what can we do about them?

One answer, as suggested by the title of an excellent book on public choice, is to put more decisions beyond the reach of politics. In free societies such as Canada and the U.S., religion and speech are beyond the reach of politics. Even if 90 per cent of congressmen want to establish a national religion, the U.S. Constitution’s First Amendment forbids it. It’s a private, not a public choice.

If you find yourself frustrated with modern politics, it may be because too many private choices have been turned into public choices. From zoning laws that limit your ability to build a mother-in-law suite to government (i.e. taxpayers) support of private firms such as battery makers, the private is now public. And that is both frustrating and weird.