The Orbis

Issue date: 1/29/08 Section: Media Reviews

Anyone disenchanted with Bush era American politics could be forgiven for picking up a copy of economist Bryan Caplan's "The Myth of the Rational Voter" and wondering, "Who exactly thinks voters are rational?" Economists, it turns out.

Economists who specialize in public choice theory have long assumed that voters are highly rational, self-interested creatures who carefully weigh candidates' different economic platforms and cast their vote for the one that would make them better off. Moreover, standard public choice theory holds that voters cannot be invariably mistaken about the effects of economic policies; eventually, they would wise up. That's nonsense, Caplan argues.

He sets forth substantial empirical evidence that the public is systematically mistaken on matters of economic policy. In particular, Caplan finds that the average voter underestimates the benefits of free markets and international trade and perceives the state of the economy to be worse than it actually is. The result is that voters elect politicians who implement bad policies such as trade barriers when society as a whole would benefit from free trade.

Caplan quantifies how mistaken the public is on various economic issues by comparing the views of the average member of the public to the views of the average economist. He presents polls that show, for example, the public is far more inclined than economists to think that a significant reason our economy isn't growing as well as it might be is because, "business profits are too high." That's an example of what Caplan calls the public's "anti-market bias," and it persists even when Caplan controls for demographic differences between economists and the public at large.

None of this is especially surprising. Economists at least as far back as Adam Smith have lectured the public about the folly of protectionism, and suspicion of the profit motive finds support in many western religious traditions.

What Caplan argues, though, is that voters are not simply ignorant in their economic views; rather, they are fundamentally irrational. The reason voters hold mistaken views is that they make them feel good, so they tune out any evidence that might force them to revise their opinions. "Instead of fairly weighing all claims, we can show nepotism toward our favorite beliefs," Caplan writes.

It may not be true that immigrant laborers depress our economy, but for a certain segment of people, it certainly feels right, and that feeling can provide psychological comfort by confirming their nativist worldviews.

Continued...

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