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

Bryan Caplan (Author)

Book Description

Publication Date: April 16, 2007

The greatest obstacle to sound economic policy is not entrenched special interests or rampant lobbying, but the popular misconceptions, irrational beliefs, and personal biases held by ordinary voters. This is economist Bryan Caplan's sobering assessment in this provocative and eye-opening book. Caplan argues that voters continually elect politicians who either share their biases or else pretend to, resulting in bad policies winning again and again by popular demand.

Boldly calling into question our most basic assumptions about American politics, Caplan contends that democracy fails precisely because it does what voters want. Through an analysis of Americans' voting behavior and opinions on a range of economic issues, he makes the convincing case that noneconomists suffer from four prevailing biases: they underestimate the wisdom of the market mechanism, distrust foreigners, undervalue the benefits of conserving labor, and pessimistically believe the economy is going from bad to worse. Caplan lays out several bold ways to make democratic government work better--for example, urging economic educators to focus on correcting popular misconceptions and recommending that democracies do less and let markets take up the slack.

The Myth of the Rational Voter takes an unflinching look at how people who vote under the influence of false beliefs ultimately end up with government that delivers lousy results. With the upcoming presidential election season drawing nearer, this thought-provoking book is sure to spark a long-overdue reappraisal of our elective system.

Editorial Reviews

From Publishers Weekly

Caplan, an associate professor of economics, believes that empirical proof of voter irrationality is the key to a realistic picture of democracy and, thus, how to approach and improve it. Focusing on how voters are systematically mistaken in their grasp of economics-according to Caplan, the No. 1 area of concern among voters in most election years-he effectively refutes the "miracle" of aggregation, showing that an uninformed populace will often vote against measures that benefit the majority. Drawing extensively from the Survey of Americans and Economists on the Economy, Caplan discusses how rational consumers often make irrational voters, why it's in politicians' interest to foment that irrationality, what economists make of the (non) existence of systematic bias and how social science's "misguided insistence that every model be a 'story without fools,' " has led them to miss the crucial questions in politics, "where folly is central." Readers unfamiliar with economic theory and its attendant jargon may find themselves occasionally (but only momentarily) lost; otherwise the text is highly readable and Caplan's arguments are impressively original, shedding new light on an age-old political economy conundrum.
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Review

The best political book this year.
(Nicholas D. Kristof New York Times )

Caplan thinks that democracy as it is now practiced cannot be salvaged, and his position is based on a simple observation: 'Democracy is a commons, not a market.'
(Louis Menand The New Yorker )

One of the two or three best books on public choice in the last twenty years.
(Tyler Cowen Marginal Revolution )

Like a few recent best sellers--Freakonomics, The Tipping Point, The Wisdom of Crowds--The Myth of the Rational Voter unwraps economic theories and applies them to everyday life. Mr. Caplan's thesis, though, lacks any semblance of a compliment: The 'unwisdom of crowds' is closer to his point. He believes that the American public is biased against sensible, empirically proved economic policies about which nearly all economists agree. Voters, he says, are not just ignorant in the sense of having insufficient information. They actually hold wrong-headed and damaging beliefs about how the economy works.
(Daniel Casse The Wall Street Journal )

The Myth of the Rational Voter usefully extends the discussion [about democracy] by linking it with 'public choice' theory. . . . Public choice theory faces a dilemma. A rational and self-interested person has no incentive to study political issues, as the chances of his or her determining the outcome are negligible. This has become known as 'rational ignorance'. Caplan maintains that the reality is much worse. He shows that voters are not just ignorant but systematically biased in favor of mistaken views.
(Samuel Brittan Financial Times )

Caplan is right to detect a stubborn irrationality in ordinary voters and he correctly points out to his rational choice colleagues that their models are hopelessly unrealistic.
(Martin Leet Australian Review of Public Affairs )

Caplan argues convincingly that irrational behaviour is pervasive among many of us today....Caplan's point, however, is that most voters are irrational. And that is worse than being ignorant....Their irrationality comes with a host of misconceptions that drive policy choices.
(Fazil Mihlar The Vancouver Sun )

This engaging and provocative volume describes why democracy gives us far less than its promise. Countering existing theories of rationally ignorant voters, Caplan argues persuasively that voters are irrational, registering systematically biased beliefs--and consequently votes--against markets and other sound economy policy metrics...[T]his is a compelling book, offering readers a well-written and well-argued competing theory for why democracy fails and why we should limit what is done through the political process.
(M. Steckbeck Choice )

[Caplan] argues that voters' own irrational biases, rather than flaws in the democratic process, compel voters to support policies that are not in their interest. While one may quibble with his specifics, the overall argument is convincing and applicable across a variety of fields...Forces the reader to take a second look at our nation's unshakable faith in the wisdom of the electorate.
(Pio Szamel Harvard Political Review )

A brilliant and disturbing analysis of decision making by electorates that--[Caplan] documents--are perversely ignorant and woefully misinformed.
(Neil Reynolds The Globe and Mail )

See all Editorial Reviews

Product Details

• Hardcover: 280 pages
• Publisher: Princeton University Press (April 16, 2007)
• Language: English
• ISBN-10: 0691129428
• ISBN-13: 978-0691129426
• Product Dimensions: 0.9 x 6.4 x 9.4 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 3.6 out of 5 stars  See all reviews (59 customer reviews)
• Amazon Best Sellers Rank: #631,151 in Books (See Top 100 in Books)

More About the Author

I'm a Professor of Economics at George Mason University and blogger for EconLog. My first book, The Myth of the Rational Voter, was named "the best political book of the year" by the New York Times. My new book, Selfish Reasons to Have More Kids, is on sale April 12. I've published in the New York Times, Washington Post, Wall Street Journal, American Economic Review, Economic Journal, Journal of Law and Economics, and Intelligence, and appeared on 20/20 and C-SPAN. An openly nerdy man who loves role-playing games and graphic novels, I live in Oakton, Virginia, with my wife and three sons.

Most Helpful Customer Reviews

177 of 199 people found the following review helpful

5.0 out of 5 stars "Don't confuse us with the facts!" June 8, 2007

By Nicole

Format:Hardcover

Many people have noted that democracy seems not to work - policies are implemented that often are not in the best interest of voters, and when voters are surveyed they routinely lack even the most basic civic knowledge. The way people have typically answered this problem is to say that voters are uninformed, and that if they simply had more access to good information, they would use that information to make better choices. But even so, the tiny informed minority will sway elections because the uninformed majority will vote at random.

Here, Caplan directly challenges that view by asserting that voters are not simply ignorant but irrational, and that this is in fact predicted by economic theory. Voting is not like shopping - it is more like making use of a commons, because the costs of a "bad" vote are borne by the public at large, and the chance of an individual casting the deciding vote is tiny. Therefore, people will vote for what makes them feel good without bothering to find out whether it really is good - it simply doesn't matter. Caplan explores four systematic biases voters hold against good economic policy - antimarket bias, antiforeign bias, make-work bias, and pessimistic bias. The fact that systematic bias exists means that the irrational majority does not in fact vote at random, so it's the irrational voters deciding who wins elections rather than the small, informed, rational minority. Voters get what they want, it's just that what they want is actually bad for them - and they don't care!

Caplan makes a persuasive case for viewing the average voter as irrational rather than simply ignorant, though admittedly I am sympathetic to this idea to begin with.... I wish he had been able to include more recommendations in his conclusion, but this should be a promising area for further research. Read more ›

80 of 94 people found the following review helpful

4.0 out of 5 stars Economists know best? July 25, 2007

By J. Gordon

Format:Hardcover|Amazon Verified Purchase

This book is a very interesting read, describing a utility-based model of why voters vote as they do. The author proposes that voters are naturally biased against their own interests. The concept is that the probability of any one voter changing the result of a vote is vanishingly small, and therefore each voter votes for what makes them feel better about themselves, even if the policies go against their own interest and the interests of the economy. For example, voters vote for higher taxes, large inefficient government programs, and protectionist policies.

For example, a voter might vote for a politician who promises to raise the voter's taxes and give their money to the poor. The voter figures that the chances that their individual vote would make the difference between the candidate winning or losing is extremely small; making the cost of the vote effectively zero. However, the psychic benefit of the vote is positive.

Where the author fails is in the chapter where he measures the policy leanings of an artificial "enlightened voter". How he defines an "enlightened voter" is an average voter with the statistical characteristics of one having a graduate degree in Economics. Based on a sophisticated multivariate-regression-based analysis, the author determines that an "enlightened voter" would be predicted to view potential policies more like... an economist! What a surprise!

Caplan asserts that the voting public would support more reasonable policies if they all had graduate degrees in economics. However, there are plenty of Econ PhD's who put too much faith in government policies solving apparent market failures....

The book is well worth reading, and makes many good points regarding the reasons why voters vote for policies that go against their own best interests, and in aggregate against the health of the overall economy. However, it does not make a convincing case that economists should be running the show. Read more ›

33 of 39 people found the following review helpful

5.0 out of 5 stars A well-researched, well-written book December 17, 2007

By Howard

Format:Hardcover|Amazon Verified Purchase

Caplan's take on democracy can by summarized as follows: first, he accepts two arguments FOR democracy by democratic enthusiasts, 1. voters are largely unselfish; 2. politicians usually comply with public opinion. He then adds his point: 3. voters are irrational (they have "systematically biased beliefs", or in layman's terms, they have false beliefs). Caplan develops a theoretical framework to prove that it is in fact rational for voters to be irrational because the "price" of their irrationality is low in politics.

The book mainly consists of the following themes: 1. the history of people's economic misconceptions; 2. empirical evidence of systematically biased beliefs; 3. the "rational irrationality" framework and why systematically biased beliefs lead to democratic failure; 4. prescription for overcoming democracy's weakness.

I think Caplan succeeds pretty admirably in 1, 2 and 3, but he is relatively terse at 4. But this is understandable: if you take his arguments seriously, then unless every voter (or at least the "median voter") has a Ph.D. in economics (in fact, she needs to be a libertarian economist!), the outcome of democracy will not be efficient. Increasing the electorate's education, etc. level will somewhat mitigate the situation, but as Caplan himself proves, this is hardly enough (education is not sufficient to eradicate all systematically biased beliefs).

As to the book itself, it is quite readable. I knew about his work before reading the book, what surprised me was how he mixed it with the history of economics with his own research, with quotes and all....

It's also interesting to note that (at least according to my observations) mainstream public choice (the economic approach of studying politics) economists tend to downplay Caplan's work, maybe it is because Caplan's work cuts to the core of public choice (the "rational choice" approach)? Or maybe they really think his work is not much different than rational ignorance? Now that his book seems to have gathered a lot of publicity, maybe others will take a second look.

The only weakness of the book is the part that he repudiates the accusation that economists have "market fundamentalism". His point is basically 1. markets, when free of failures, will lead to efficient outcome (first, "positive", premise); 2. Caplan does not say this, but in most economists' thinking, there is also an implicit second, or "normative" premise, which is that efficient outcome is desirable. In fact, most economists tend to shy away from this conclusion and maintain that they only specialize in cost/benefit analysis and do not make such judgment, but from their passionate, enthusiastic and sometimes vehement arguments for free market, it is not too difficult to detect such deep-rooted belief -- that "free market is good". 3. economists do not always assume there are no market failures, therefore they are not "market fundamentalists". But this is typical economists' thinking: in order to argue with them, you must accept their first premise first, and implicitly also accept the second premise, then the debate about "market fundamentalism" naturally reduces to argument about whether there are market failures. But, they are people who do not accept even the first premise, and there are more -- on moral grounds, etc. -- having difficulty accepting the second. I am not saying I agree with these people (but I have not been blinded by the ivory tower yet, so at least I know the existence of such people and such views). It is very typical of economists to not even acknowledge such views, or pretend they do not exist. It is not an easy task to face these people face-to-face, listen to their arguments, then come up with your own arguments to correct their "biased beliefs", but a good economist should not be daunted. However, this is not a big blemish in an otherwise well researched and well written book, so I am still giving it 5 stars. Read more ›