The Myth of the Rational Voter: Why Democracies Choose Bad Policies

by Bryan Caplan

Take his famous Candlemakers’ Petition: We are suffering from the ruinous competition of a foreign rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him. . . . This rival . . . is none other than the sun. [I]f you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged?

Admittedly, economists have less latitude on television than in class. If a reporter interviews you about the trade deficit, but you keep changing the subject to comparative advantage, the interview might not be aired, and you reduce your chance of being interviewed again. But it is worth testing the limits of the media’s tolerance. It is not so off-putting to preface any mention of the trade deficit with a short disclaimer: “Trade deficits, contrary to popular opinion, are not a bad thing. Whenever the trade deficit goes up, people always want to ‘do something’ about it, but they’re wrong—like all trade, international trade is mutually beneficial, whether or not there is a trade deficit.” Maybe you could tack on an amusing example too: “I run a huge trade deficit with Wegmans Supermarket—I buy thousands of dollars of its groceries, but Wegmans buys nothing from me—and it is nothing to worry about.” If you cannot steer the conversation away from the latest numbers, at least steal a little time to put the numbers in perspective.

It is hard to be sure, but in the absence of generations of economic education, changes like falling tariffs and privatization would probably have happened on a smaller scale, or not at all.76 But economists are in a peculiar situation: They correct public opinion not because market forces drive them to, but because market forces grant them the wiggle room to perform this function, if they are so inclined. This means that a great deal depends on the profession’s morale—how enthusiastically it accepts its responsibility.

In so doing, they would attain Keynes’s ambition: for economists to become “humble, competent people on a level with dentists.”77 Such professional humility is dangerous. Economists who compare themselves to dentists will basically accept their society as it is. This would be fine if reducing variance were the only task for economists to perform. But in the real world, economists are the main defense against the systematic errors that are the foundation for numerous bad policies. If they look the other way, these mistakes go largely unchecked. Nothing is more likely to make economists desert their posts, to deter them from performing their vital function, than a misguided humility.

Economists should not forget that they have made mistakes in the past, and will again. We should all admit our limitations. But there are two kinds of errors to avoid. Hubris is one; self-abasement is the other. The first leads experts to overreach themselves; the second leads experts to stand idly by while error reigns.

Economists have created and popularized many of the most socially beneficial ideas in human history, and combated many of the most virulent. If they were self-conscious of their role in the world, they could do much more.

Migration patterns provide a nice illustration. Citizens of poor countries are often eager to emigrate to rich countries. But they rarely vote for parties that pledge to copy the policies of the rich countries. If an Indian desperately wants to move to the United States but is unable to get a visa, voting to make India more like the United States seems like the next best thing. But there is a crucial difference between the two actions. A migrant who leaves his homeland gives up psychological benefits, such as the belief that his nation is the best in the world, in exchange for a big jump in his material well-being. A voter who turns his back on his nation’s political tradition gives up psychological benefits but—since policy is beyond his control—is not a penny richer.

my position cuts against the grain of modern social science. If I am right, then a great deal of published research is wrong.

“a wise man learns more from a fool than a fool learns from a wise man.”