An Alternative to Democracy?

(Photo: Kim)

With the U.S. presidential election nearly here, everyone seems to have politics on their mind.  Unlike most people, economists tend to have an indifference towards voting.  The way economists see it, the chances of an individual’s vote influencing an election outcome is vanishingly small, so unless it is fun to vote, it doesn’t make much sense to do so.  On top of that, there are a number of theoretical results, most famously Arrow’s Impossibility Theorem, which highlight how difficult it is to design political systems/voting mechanisms that reliably aggregate the preferences of the electorate.

Mostly, these theoretical explorations into the virtues and vices of democracy leave me yawning.

Last spring, however, my colleague Glen Weyl mentioned an idea along these lines that was so simple and elegant that I was amazed no one had ever thought of it before.  In Glen’s voting mechanism, every voter can vote as many times as he or she likes.  The catch, however, is that you have to pay each time you vote, and the amount you have to pay is a function of the square of the number of votes you cast.  As a consequence, each extra vote you cast costs more than the previous vote.  Just for the sake of argument, let’s say the first vote costs you $1.  Then to vote a second time would cost $4.  The third vote would be $9, the fourth $16, and so on. One hundred votes would cost you $10,000.  So eventually, no matter how much you like a candidate, you choose to vote a finite number of times.

What is so special about this voting scheme?  People end up voting in proportion to how much they care about the election outcome.  The system captures not just which candidate you prefer, but how strong your preferences are.  Given Glen’s assumptions, this turns out to be Pareto efficient — i.e., no person in society can be made better off without making someone else worse off.

The first criticism you’ll likely make against this sort of scheme is that it favors the rich.  At one level that is true relative to our current system.  It might not be a popular argument, but one thing an economist might say is that the rich consume more of everything – why shouldn’t they consume more political influence? In our existing system of campaign contributions, there can be little doubt that the rich already have far more influence than the poor.  So restricting campaign spending, in conjunction with this voting scheme, might be more democratic than our current system.

Another possible criticism of Glen’s idea is that it leads to very strong incentives for cheating through vote buying.  It is much cheaper to buy the first votes of a lot of uninterested citizens than it is to pay the price for my 100th vote.  Once we put dollar values on votes, it is more likely that people will view votes through the lens of a financial transaction and be willing to buy and sell them.

Given we’ve been doing “one person, one vote” for so long, I think it is highly unlikely that we will ever see Glen’s idea put into practice in major political elections.  Two other economists, Jacob Goeree and Jingjing Zhang have been exploring a similar idea to Glen’s and testing it in a laboratory environment. Not only does it work well, but when given a choice between standard voting and this bid system, the participants usually choose the bid system.    

This voting scheme can work in any situation where there are multiple people trying to choose between two alternatives — e.g., a group of people trying to decide which movie or restaurant to go to, housemates trying to decide which of two TV’s to buy, etc.  In settings like those, the pool of money that is collected from people voting would be divided equally and then redistributed to the participants.

My hope is that a few of you might be inspired to give this sort of voting scheme a try.  If you do, I definitely want to hear about how it works out!

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  1. Randy Hudson says:

    In corporate governance, it’s one share, one vote. One can also spend one’s money to acquire proxies, the right to vote others’ shares, or less commonly, to rent shares (and temporarily control their voting rights). Have these methods not been studied in “business” schools? Wouldn’t the results of those studies be pertinent to social governance and voting?

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  2. anadromy says:

    I believe the English invented the term “wanking” for ideas such as these.

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  3. Eric says:

    Hurray for plutocracy!

    I can’t even believe anyone is taking this seriously, even for a few seconds. You would realize more concrete success if you were trying to build a time machine.

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  4. Avash says:

    So the big innovation is taking into consideration the strength of voter preferences? I get that this is pareto efficient but having a just system is much more important. This is a cute economic idea, but I’ll stick with democracy.

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  5. Sethblink says:

    Any time you tie money to votes, you are inviting disaster. I want to run for President on a platform that says that businesses shouldn’t pay taxes, capital gains taxes are 5% across the board and individual income tax maxes out at $1 million per year.

    There are over 10,000 people in America that earn over $5mm per year. If every one of them gave me 1,000 votes, it would cost them $1mm each (a drop in the bucket compared to what they would save) and they would cast a total of a 10million votes for me. If every one of them offered people $20K to vote 100 times for me (it would cost the voter $10K so he’d pocket $10K) for another $1mm, they’d buy 5,000 votes. Multiply that by 10,000 and I’ve got another 50million votes.

    I’m oversimplifying, but this system would make it so beneficial to any candidate to favor the rich. The free market economy already does that enough and sadly, so does our electoral system. Why do it more. This is one of the worst ideas I’ve ever heard of.

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  6. Matt says:

    First, this whole scheme would likely be deemed to be a poll tax, and thus unconstitutional.

    Second, I’m grateful that the author is honest enough to acknowledge in the title that the system described would NOT be a democracy, as the concept of purchasing access to the political system is the purest definition of oligarchy and plutocracy there is.

    Third, the author’s suggestion that such a system would favor the rich more than our current model is blindingly obvious. Even if the cost of purchasing additional votes increases exponentially, the rich are still going to have the resources to purchase these extra votes while the poor do not. Thus, it becomes “one man, one vote, one CEO, 20 votes, one corporation, 20,000 votes”. The only way such a system could be even remotely balanced would be if there was some kind of cap in place that mandated a limit to the number of votes a person could purchase, but consider, in light of the Supreme Court’s Citizens United ruling, what would there be to stop a Sheldon Addleson, George Soros, or any other mufti-billionaire from forming a bunch of SuperPAC’s with the sole purpose of raising money to purchase additional votes for the candidate of their choice while masking the sources of the money. Truly, truly frightening.

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  7. Kevin says:

    Problem: President is not the only elected office. On my ballot this year, I had the president, my U.S. Representative, my state Rep. and Senator, my state’s attorney, my county recorder of deeds, three spots on the Water Reclamation District board, an Illinois Supreme Court vacancy, four ballot questions including two constitutional amendments (one Illinois and one U.S.), dozens of judges running to retain their seats, and a few more that I’m forgetting. With all of the races on every ballot, and local races every year, and primaries every other year, one of two things would happen: voting would get prohibitively expensive very fast, or anyone could easily buy their way into an elected office.

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  8. Aaron says:

    Hi Steven, long time reader first time commenter–and I love thought experiments like this.

    Doesn’t such a system fall prey to the same problems as, for example, video lottery terminals? An individual does not correctly calculate their risk or likelihood of rewards and ends up drastically overspending. And just like video lottery, the people most likely to overspend are those who can least afford it.

    I mean, imagine a person taking out a second mortgage to buy extra votes because they believe that it increases their expected value on the election’s outcome? Now imagine they’re in, say, downtown Manhattan, and so even a billionaire’s investment isn’t going to be able to rock the boat.

    My second objection would be the patronage angle. Imagining a hypothetical world where no one can donate or spend a dime in election advertising or issue advocacy, only buy votes, wouldn’t corporate benefactors directly quantify their support in number of votes to campaigns, expecting patronage in return? Presumably for privacy purposes, ballots would still be secret, but for transparency purposes, the number of ballots cast would be public–what’s to stop an agent of an interest group from “voting” 1000 times, and reporting to each of the campaigns that their votes went there? Or even assuming there’s no secret ballot, what’s to stop an actor from voting for both parties simultaneously as a hedge, in proportions that reflect the candidates chance of winning?

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