Monday, March 13, 2006

Public Choice Theory and Liberating Markets in Happiness and Well-Being

I just ran across Martin Seligman's "Presidential Column," when, in his capacity as president of the American Psychological Association, he describes a decision by the American Psychiatric Association as "shameful." The context was the psychistrists' decision not to participate in a joint academic journal designed to facilitate communication and share research findings between the psychological community and the psychiatric community. Seligman's account of the demise of this journal is telling:

"We published our first article and commentary in September 1997. You can read it on the web at

The dream has ended. In December 1997 the American Psychiatric Association’s Board of Trustees, acting in a closed-door meeting, withdrew from the collaboration (see article on page 42). They cited the need for a “broad review of the costs and benefits of electronic publishing projects.” This, of course, was not the whole story.

In August I began getting messages from their leadership that their board, led by the California trustees, might end their participation. In September, they put their cooperation on hold, citing the “state of the relationship between the two associations.” I was informed that APA’s policy of seeking prescription privileges for psychologists was the central problem. What publishing this scholarly journal had to do with that issue was not clear, but we crafted a disclaimer that reading Treatment did not qualify one to prescribe. It was clear, however, that their final decision to end the collaboration was political. Many of their trustees were worried that any collaboration with APA would legitimize the efforts of psychologists to obtain prescription privileges."

Both the psychiatric and psychological guilds would be outraged by my notion that we need to legalize markets in happiness and well-being, especially once they realized that that would involve the elimination of occupational licensure. Guilds exist to protect legal prerogatives.

They would also, most likely, ridicule public choice theory. Public choice theory, which is widely accepted among economists, is merely a means of analyzing government action by pointing out that most of the time most voters, lobbying groups, politicians, bureaucrats, and judges act in alignment with the information and incentives they face. Public choice theory is a helpful reminder that modern nation-state democracy is not a town meeting in Vermont.

Often academics, outside of economics, dismiss public choice theory on the grounds that they believe in their own high-minded rhetoric. But the interaction described above between the American Psychiatric Association and the American Psychological Association is far more typical of political realities, even among academics. Groups of people protect their turf. Moreover, they often disguise their rationales and motives in their public pronouncements, just as the psychiatrists tried to disguise their real rationale by cancelling the joint publication project on the grounds of the need for "a broad review of the costs and benefits of electronic publishing projects." As Penn & Teller would say, "Bullshit!" - and kudos to Seligman, Mr. Positive Psychology, for describing the psychiatrists' groups' behavior as shameful.

The next step forward in consciousness is for positive people such as Seligman to realize that the behavior of the psychiatrists is the norm, whether the group involved happens to be teachers' unions, local zoning boards, manufacturers' associations, public employees' unions, defense contractors, HMOs, the AARP, or whatever. As James Madison knew, democracy is primarily about factions jockying for power and influence, and the words used in political debates and pundit's columns reflect only a tiny fraction of daily political reality. Daily political reality is made up of closed-door meetings in which influenced is silently wielded on behalf of existing powers. Moreover, often the jockying for power is far from the halls of legislature; if any of us would have proposed ex ante that the psychiatrists were so power-hungry that they would refuse to collaborate in an on-line journal project with the APA for fear that they would therefore grant credibility to APA efforts to break into the AMA's monopoly on writing prescriptions, we would have been ridiculed for our paranoia and cynicism.

Charlotte Twight elegantly documents the extraordinarily byzantine ways in which groups hide their tracks as they acquire power in her Dependent on D.C.: The Rise of Federal Control over the Lives of Ordinary Americans,