Liberty Alone

Brian Caplan’s ‘The Myth of the Rational Voter’ has been garnering a lot of attention, especially for an economics book.
In this month’s Reason he gives a summary of some of the arguments in the book - how voters are systematically biased to choose bad economic policies - The 4 Boneheaded Biases of Stupid Voters (And we’re all stupid voters.).

I’ve just read this in the print edition, but the nice folks at Reason put all their articles online for you to read for free. I suggest everyone goes and reads this.

The four biases exposed are:

1. Anti-market bias - people underestimate markets and over estimate the need for intervention
2. Anti-foreign bias - people underestimate the benefits of economic interaction with foreign countries
3. Make-work bias - people don’t understand the benefit of conserving labour and labour saving mechanisms in the workplace
4. Pessimistic bias - people are just too pessimistic about the economy

These are all things which economists almost all agree on. The differences come in the detail - is it best to help people who’ve been made redundant due to labour saving or not? Where are the few places markets do fail? Is the economy underperforming leading to a slower growth rate?

The fact that voters have this systematic bias (something economists are loathe to admit, but do so in every economics 101 class they teach) means that politicians put forward and carry out bad economic policies. What should be done? Well, that question is left open (but is definitely one the liberal politician is best placed to answer).

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