Friday, January 13, 2012

What we observe, or what we believe we observe...

The pervasiveness of economic illiteracy never fails to amaze me. Seemingly opposite positions live within perfectly reasonable minds.   People readily combine contradictions with such certainty by way of substitution. Faced with a genuinely difficult question, they answer a different, easier question, then conflate the answer to their question with the answer to your question

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, according to economist Bryan Caplan in his sobering assessment in this provocative and eye-opening book. 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.

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