Quadratic voting and Parliamentarism
If you have read my book, you will recall that one crucial advantage of parliamentary systems is that they may overcome the challenges of Arrow's paradox, unlike presidential systems. But parliamentary systems are not the only arrangement capable of overcoming these challenges. A quadratic voting system can also do that, in theory, and evidence has shown that it can be successful in practice as well in certain environments. Shouldn't we prefer this innovative in favor of the old technology that is parliamentarism? No, for two reasons: 1) While quadratic voting is very promising and I would love to see it further explored, it fails to address one of the main flaws of direct democracy which I discussed in the book: expressive voting or rational irrationality . 2) The very fact that it is an innovative solution means we should be careful
Quadratic voting has its name because it is a system whereby voters are able to buy as many votes as they want on any issue, but the costs of votes increase with the square of the number of votes. So I may have 1 vote for a cost of 1, 2 for 4, 3 for 9 and so on. We will not get into the math, but the point is that this increases efficiency compared to the situation with no transaction, in that it allows for an increase in overall utility through trade. In the book, we saw that this greater efficiency by transactions already happens in parliaments. One advantage quadratic voting has over one-person-one-vote, however, is that it benefits the less wealthy who are protected from overwhelming influence of the more wealthy because of the exponential increase in prices of votes.
The problem is that when a voter's probability of changing the results of an election are sufficiently small, he or she will not have enough incentives to cast their vote rationally, with or without quadratic voting. Vitalik Buterin, one of the most prominent advocates of quadratic voting, acknowledges this in his post, Quadratic Payments: A Primer: "A third challenge is the 'rational ignorance' and "rational irrationality' problems, which is that decentralized public decisions have the weakness that any single individual has very little effect on the outcome, and so little motivation to make sure they are supporting the decision that is best for the long term; instead, pressures such as tribal affiliation may dominate. There are many strands of philosophy that emphasize the ability of large crowds to be very wrong despite (or because of!) their size, and quadratic payments in any form do little to address this."
This means that while quadratic voting is an interesting and promising concept, it would do little to address the major challenges presented to democracies today. As I argue in the book, societies that fare better for most fare better for just about everyone. This is consistent with the major problem being one of increasing too little rationality in societies. Quadratic voting could help societies which already have their members expressing their preferences in a perfectly rational way, but fail to reach possibly welfare-improving arrangements because of inequality in wealth. This would be nice, but is a second-order issue in a world of ubiquitous suboptimal decisions. As David Levine writes in his review of Posner and Weyl's book, Radical Markets, "The issue of experts is important. As someone who has studied voting I wonder: is the problem of minority representation more important than the problem of rational voter ignorance? The 32,000 citations of Downs’s (1957) work on rational voter ignorance indicates to me that many do not think so.
The second reason why parliamentarism is better suited for wide promotion is the danger associated with rapidly implementing innovative ideas which have not stood the test of time. There is no shortage of catastrophic arrangements which "seemed like a good idea at the time". As Levine points out in his article, "One wonders what unanticipated catastrophes would be occur if QV were introduced in a similarly insouciant way." Parliamentarism, on the other hand, has been around for centuries and is responsible for much of the progress in the world.