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THE MYTH OF THE RATIONAL VOTER ‐ By Bryan Caplan

Article  in  Economic Affairs · June 2008

DOI: 10.1111/j.1468-0270.2008.836_1.x

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Book reviews

THE MYTH OF THE ideas are reflected in the policies people held by the great majority of the
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support when they go to the polls. As electorate in explaining the policies

R AT I O N A L V O T E R Caplan notes from the experience of
undergraduate economics teaching: ‘If it
Bryan Caplan is disturbing to imagine the bottom of the
Princeton, NJ: Princeton University Press, class voting on economic policy, it is
276pp., ISBN: 069 112 9428, £17.95 (hb), frightening to realise that the general
2007 population already does’ (p. 14).
In the economic marketplace there are
strong incentives to correct erroneous
Readers of Economic Affairs will not need beliefs: a business that seeks to create as
much persuading that democracies much work as possible, for example by
frequently select bad public policies, insisting that all internal communication
particularly in the economics sphere. The takes place via carefully calligraphed
prevalence of protectionism, agricultural memos, will soon find itself falling behind
subsidies and punitive taxation are its competitors. In democratic decision-
obvious examples. Public choice theory making, however, such incentives do not
has traditionally explained such policies exist. The fact that each individual vote
in terms of the ability of special-interest carries so little weight means that there
groups to capture the political process are virtually no personal costs of holding
and use it for their own ends. The erroneous beliefs. Rather, correcting
standard public choice approach erroneous views involves the costs of
contends that, because the chance of an deviance from everyone else’s views. It is
individual voter influencing the outcome much easier to accept received wisdom
of an election is infinitesimally small, than to challenge it.
most choose to be ‘rationally ignorant’ of Hence, it is much more comforting to
politics, leaving a vacuum that is filled by believe that the NHS is a noble enterprise
those interest groups for whom the that deserves our support than to adopt
benefits of political activity (subsidies and the alternative viewpoint that a
rents) exceed the costs (time and money). monolithic, nationalised system of
In a series of recent academic papers healthcare provision is unlikely to achieve
and now in The Myth of the Rational Voter, comparable outcomes to systems that
George Mason University economist utilise the benefits of decentralised
Bryan Caplan has advanced an alternative knowledge generated by private insurance
explanation of democratic failure. and private hospitals.
Caplan’s argument is that most public As Caplan puts it: ‘the institutional
policies have the support of a majority of structure of democracy makes political
the electorate. The problem is that the irrationality a free good for its ultimate
electorate prefer bad (or irrational) decision-makers, the electorate. So we
policies. The institutional structure of should expect voters to be on their worst
democracy makes voter irrationality a cognitive behavior’ (p. 132).
private good and a public bad and it is Whereas the standard public choice
this, rather than the power of special approach of rational ignorance assumes
interests, that leads to the adoption of that voters tire of the search for truth,
bad policies. Caplan’s alternative model of rational
At the core of Caplan’s thesis is the irrationality assumes that people actively
idea that the general public is prone to a avoid the truth, even when it is put before
number of systematic biases: most people them, because falsehoods and fairytales
are biased against markets and against are simpler to believe and more
foreigners, they believe work creation consoling.
equates to prosperity and they are Caplan makes a compelling case for
inherently pessimistic. These fallacious the importance of the irrational views
pursued by democratic governments.
Certainly, one only has to teach an
undergraduate seminar in the social
sciences, attend a public meeting or watch
a political discussion on television to
experience some confirmation of Caplan’s
central thesis that most people hold
systematically biased beliefs about public
policies which are reinforced rather than
removed by the political process.
There are probably two principal
weaknesses to Caplan’s thesis, however.
Firstly, his thesis would seem to struggle
to explain variations between public
policies pursued in different countries.
For example, does the USA make greater
use of the private sector in the provision
of healthcare than most European
countries because US voters are more
rational than European voters? It seems
more likely the differences between US
and European healthcare provision
should be attributed to the classical
public choice villains of the preferences
of political elites, the power of producer
interests and the role of path-dependency
in institutional development.
Secondly, Caplan has an almost naïve
faith in expert opinion. He contrasts the
opinions of professional economists and
toxicologists with those of the general
public to demonstrate that the public
hold erroneous beliefs about economics
and toxicology. But the generalisability of
these findings may be limited. The great
majority of healthcare professionals in
the UK, for example, probably share the
public’s biases about the merits of the
NHS. Caplan makes a plea for experts to
be less humble and to assume a greater
role as public educators, but this assumes
that experts are not prone to systematic
bias. If economists adopt such a role – as
those writing for the IEA have done for
many decades – I would agree that this
may help to positively educate the public.
But I am doubtful that a greater educative
role for professional sociologists or urban
planners would have a similarly positive
impact.

© 2008 The Authors. Journal compilation © Institute of Economic Affairs 2008. Published by Blackwell Publishing, Oxford
 ecaf(29)_836.fm Page 95 Friday, May 23, 2008 10:45 AM
Alongside more expert engagement
in public debate, Caplan identifies a
reduction of the role of government in
favour of greater reliance on markets as
the solution to the problem of the
irrational voter; the only way to force the
wilfully irrational to confront their errors
is to reduce the political sphere so that
more decisions are taken in the
marketplace where the costs of erroneous
beliefs are borne by the individuals
holding those beliefs.
Any criticisms should not detract
from the fact that this book is a major
achievement that should be essential
reading for anyone wishing to understand
the pathologies of democratic
decision-making. Caplan’s theory of
rational irrationality makes a significant
contribution to the standard public
choice account of rational ignorance. I
suspect that rational irrationality will not
come to replace rational ignorance, but
rather will be seen as an important new
dimension of public choice analysis to
be utilised alongside it. Any future
university course on political
economy or democratic theory will be
incomplete without the inclusion of The
Myth of the Rational Voter on its reading
list.
John Meadowcroft
Lecturer in Public Policy
King’s College London
john.meadowcroft@kcl.ac.uk
iea
2Original
28
bookeconomic
reviews affairs xxx 2008
Article
L’ H O M M E L I B R E :
FESTSCHRIFT IN
H O N O U R O F PA S C A L
SALIN
Mathieu Laine and
Guido Hülsmann (eds.)
Paris: Les Belles Lettres, 529pp.,
ISBN: 225 144 3142, $40.00 (hb), 2006
A festschrift to a living economist? Yes,
indeed. Pascal Salin – a leading French
liberal economist and a proponent of
the Austrian School – has retired after a
long and fruitful academic career. The
book gathers together a wide range of
comments and articles from past
students and colleagues as well as many
notable liberal thinkers such as Gary
Becker.
© 2008 The Authors. Journal compilation © Institute of Economic Affairs 2008. Published by Blackwell Publishing, Oxford
View publication stats
iea e c o n o m i c
Born in 1939, Salin was Professor of
Economics at the University of Paris
Dauphine. He also served in numerous
other positions, such as being consultant
to the IMF and adviser to numerous
think-tanks globally. He held editorial
posts with several journals such as the
Quarterly Journal of Austrian Economics,
Journal of International Economics,
Journal of Libertarian Studies and many
others. An author of several books and
innumerable articles, Salin’s research
areas included international and
monetary economics, political economy,
microeconomics, and tax and fiscal
policy.
The book covers articles and notes
from no fewer than 41 contributors.
Some are household names in liberal
circles while others are younger scholars.
Edited jointly by business lawyer and
author Mathieu Laine, and Ludwig von
Mises’ biographer Guido Hülsmann,
L’Homme Libre presents an impressive
array of writers and topics pleasing to
those who aspire to greater personal,
economic and social freedom. The articles
are in English and French (about 50-50
each).
What most struck me as reader of
L’Homme Libre was the simple and honest
admiration and gratitude towards Pascal
Salin transmitted by former students
and colleagues in their tributes to the
scholar.
For example, Véronique de Rugy, of
the American Enterprise Institute, writes:
‘Were it not for his guidance and
inspiration, today I would very likely be
working in a French bank cranking out
data, up to my eyes in financial minutia,
and beset by the near daily annoyances
of the French interventionist system.
Instead, I am in the United States working
in my dream job’ (p. 51). Or listen to
Frederic Sautet, another former student:
‘I learned from Salin that economics is
not a game for clever people; it is the
search for truth’ (p. 89).
The tributes are followed by articles
on an unusually wide range of topics.
They cover the methodology of social
sciences; thinkers and schools of
thought for freedom (including an
amusing essay on Hayek by the late Lord
Harris of High Cross); law, legislation and
liberty; taxation; freedom in money and
banking (including Becker’s ‘Free
Banking’ essay from 1956);
interventionism and freedom; liberty and
a f fa i r s j u n e 2 0 0 8 95
security; liberalism and Christianity;
towards a free Africa; and lessons from
history.
I should especially mention the very
topical subject of money and banking, an
area where misguided policies have
played so much havoc with the entire
market system. The authors here go much
further than criticising at a superficial
level – for example, central bank
interventions that encourage moral
hazard, like the case of Northern Rock.
Like Pascal Salin, they go to the roots of
the problem and ask: why do we have
government monies and central banks in
the first place? Monetary freedom is not
utopian but realist, concludes Jean-Pierre
Centi.
I must, however, disagree with
Becker’s 1956 ‘free-banking’ proposal,
which was directed against the 100%
reserve requirement advocated by
old-school Chicago economists.
It is true, as Becker says, that we have
too much regulation of banking, but to
my mind that is the logical result of the
legally and economically unstable
nature of fractional reserve banking,
as recent events demonstrate once
again.
Another attractive feature of the
book is its openness to spheres more
transcendental than economics and
politics. Jacques Garello outlines Karol
Wojtyla’s philosophy of freedom, using
sources from both before and after he
became known as Pope John Paul II.
Another article, by Jean-Yves Naudet,
discusses the dignity and responsibility of
man in the light of John Paul’s encyclical
letter Centesimus Annus.
There are many other contributions
that I would like to note, such as Hans
Hoppe’s proposal ‘The Idea of a Private
Law Society’ and the articles on Africa by
Mamadou Koulibaly and Albert Ondo
Ossa.
Summa summarum, this is a delightful
collection from some of the world’s best
liberal thinkers. Perhaps I should say that
the editing might have been more
demanding at times, but this is
understandable given the number of
authors. L’Homme Libre makes a joyful
read – with the added advantage of
providing an opportunity to sharpen-up
your rusty French.
Oskari Juurikkala
Ansgar Economics and Kultainfo.com
Oskari.juurikkala@googlemail.com