First, Danny Finkelstein says that the Iranian protests show that Iranians, like us, want freedom. But imagine that the Iranian regime were even more repressive than it is, that agitators for freedom had been killed or imprisoned and that others who once wanted freedom had either given up hope of ever getting it, or were scared to speak up for it for fear that they would be alone. There would then be no protests. But the case for freedom would be no weaker.
In this sense, Iranians’ stated preference for freedom does not increase the case for them having freedom. That exists independently of what they say they want.
Secondly, should the government listen to public concerns about immigration? Doing so would, no doubt, lead to tougher immigration restrictions. But as I’ve said, this would be bad for the economy.
What’s more, these concerns might be biased. It’s easy to overstate the extent to which immigrants “take British” jobs, because it’s easy to see a foreigner doing a job a Brit could do. Equally, the pressure migrants put upon public services is magnified by the media. The availability heuristic can therefore cause people to over-estimate the harm of immigration.
There are two common themes in these stories. One is that fulfilling stated preferences needn’t lead to good outcomes. People cowed and broken by dictatorship mightn’t call for freedom. But they should still get it. And conversely, giving people what they want can be illiberal, inefficient or unjust.
Secondly, stated preferences can be mistaken. In my Iran counter-factual, the problem is adaptive preferences and information cascades. In my immigration example, it’s a cognitive bias.
Which leads me to a paradox. There is an increasing fashion in recent years for letting people have their say - be it radio phone-ins, have your say features, calls for referenda and demands to listen to the people on immigration and MPs’ expenses. But this fashion has existed alongside the rise in interest in cognitive biases research, which shows that public preferences can be systematically biased, which implies we should pay less heed to what they say they want.
And alongside this lies a second paradox. The calls for people to have their say often come in areas where the people have no specific expertise and where their opinions are likely to be biased: immigration, for example, or the Lisbon treaty. But in areas where people might have useful dispersed knowledge - how to improve local public services or how to better run companies - there is less demand (though not none) to listen to them.
What are the solutions to these problems? My answer is to use demand-revealing referenda - because when people have money on the line they are more rational - and to hope that institutional change improves the public character, and to empower workers.
Are there better answers? Or have I misdiagnosed the problem?