The Myth of the Rational Voter

Are voters irrational in a democracy which is worse than just being ignorant.We the people do not understand economics .

Economic policy is the primary activity of the modern state. And if there is one thing that the public deeply misunderstands, it is economics. People do not grasp the “invisible hand” of the market, with its ability to harmonize private

greed and the public interest. I call this anti-mar- ket bias. They underestimate the benefits of interaction with foreigners. I call this anti-foreign bias. They equate prosperity not with produc- tion, but with employment. I call this make-work bias. Finally, they are overly prone to think that economic conditions are bad and getting worse. I call this pessimistic bias.

In a dictatorship, government policy is often appalling but rarely baffling. The building of the Berlin Wall sparked worldwide outcry, but few wondered, “what are the leaders of East Germany thinking?” That was obvious: they wanted to continue ruling over their subjects, who were inconsiderately fleeing en masse.

No wonder democracy is such a popular political panacea. The history of dictator- ships creates a strong impression that bad policies exist because the interests of rulers and ruled diverge. A simple solution is make the rulers and the ruled identical by giving “power to the people.” If the people decide to delegate decisions to full-time politicians, so what? Those who pay the piper—or vote to pay the piper—call the tune.