Voter Biases Based on Ignorance

Brian Caplan writes in Cato Unbound:

Economists and the public hold radically different beliefs about the economy.[4] Compared to the experts, laymen are much more skeptical of markets, especially international and labor markets, and much more pessimistic about the past, present, and future of the economy. When laymen see business conspiracies, economists see supply-and-demand. When laymen see ruinous competition from foreigners, economists see the wonder of comparative advantage. When laymen see dangerous downsizing, economists see wealth-enhancing reallocation of labor. When laymen see decline, economists see progress.

While critics of the economics profession like to attribute these patterns to economists' affluence, job security, and/or right-wing ideology, the facts are not with them. Controlling for income, income growth, job security, gender, and race only mildly reduces the size of the lay-expert belief gap. And, since the typical economist is actually a moderate Democrat, controlling for party identification and ideology makes the lay-expert belief gap get a little bigger. Economists think that markets work well not because of their extreme right-wing ideology, but despite their mild left-wing ideology.

Since in a democracy, it is the general public that elects people to office, the fact that the majority of that public have such serious misperceptions is worrying. Of course, the republican form of government puts people into office who should know more than their constituencies about such issues, and the office holders have staffs of experts and access to other experts in academia and think tanks. Thus the representatives of the public should be better informed and able to make better policy than the electorate.

Unfortunately, politicians who get elected to office by pandering to fears based on the misperceptions of the electorate may themselves believe in the myths that they mouth; they may follow through on their promises and enact and implement bad policies based on bad theories and misperceptions.

Caplan states:

So what remedies for voter irrationality would I propose? Above all, relying less on democracy and more on private choice and free markets. By and large, we don't even ask voters whether we should allow unpopular speech or religion, and this "elitist" practice has saved us a world of trouble. Why not take more issues off the agenda? Even if the free market does a mediocre job, the relevant question is not whether smart, well-meaning regulation would be better. The relevant question is whether the kind of regulation that appeals to the majority would be better.

I suggest also a political response to this problem -- not to limit democracy, but to strengthen appreciation of governance by the elected representatives of the people, and the importance of professional staff and legislative and executive branch knowledge systems. We also need to attend more to expert judgment of the quality of governance. Caplan's analysis also strengthens my opinion that we must improve education and we must improve the information systems that allow lifelong learning for the citizenry. So too, I believe, we must find better ways to motivate citizens to devote time and effort to learning about economics and other difficult but important subjects.

Caplan is the author of a new book titled The Myth of the Rational Voter: Why Democracies Choose Bad Policies. His article in Cato Unbound is closely related to the thesis of that book.

"Vote for me, dimwit", Lexington's column in the current (June 14th) edition of The Economist also is based on Caplan's book. The column

identifies four biases that prompt voters systematically to demand policies that make them worse off.

• First, people do not understand how the pursuit of private profits often yields public benefits: they have an anti-market bias.
  
• Second, they underestimate the benefits of interactions with foreigners: they have an anti-foreign bias.
  
• Third, they equate prosperity with employment rather than production: Mr Caplan calls this the “make-work bias”.
  
• Finally, they tend to think economic conditions are worse than they are, a bias towards pessimism.