A new paper by Daniel Hausman raises an important question which conventional politics ignores: why should we satisfy people's preferences?

Hausman's answer is that preferences have no intrinsic value. Instead, they matter only to the extent that, under some circumstances, they reveal people's welfare:

When people's preferences are undistorted and largely self-interested and their beliefs are true, preference satisfaction indicates welfare. It is because preferences often indicate welfare that policy-makers should aim to satisfy preferences.

This, of course, poses the question: how we can tell when preferences are undistorted and beliefs are true?

One might think that this is more likely to be the case when an issue is clear-cut, bears directly upon an individual and when he gets quick and clear feedback about his preferences.

There's one realm where this is especially unlikely - political choices. Rational ignorance and inattention, along with countless cognitive biases and ideologies, give us plenty of reason to suppose that voting preferences don't satisfy Hausman's principle. And yet politicians very rarely (in public) suggest that voters are systematically irrational. By contrast, they are keen to question the validity of preferences in areas where one might imagine that individuals are better judges of their well-being; I'm thinking here of laws against drugs and assisted suicide, and the entire nudge agenda.

However, even if voting behaviour doesn't reveal welfare, there is a justification for democracy. Welfare isn't everything. And the idea that people's preferences should be over-ridden leads swiftly to tyranny.

Strong as this argument is, it tells us that democracy is an intrinsic good (or more accurately bad avoider) rather than an instrumental one. It gives us no reason to suppose that people's actual choices within a democracy will be welfare-enhancing. And yet the political class pretends that this is not just possible, but common. Which, I suspect, betrays a confusion about the role of preferences in politics.