Bryan Caplan debunks The Myth of the Rational Voter, starting with misconceptions about the economy:
Economists and the public hold radically different beliefs about the economy.[4] Compared to the experts, laymen are much more skeptical of markets, especially international and labor markets, and much more pessimistic about the past, present, and future of the economy. When laymen see business conspiracies, economists see supply-and-demand. When laymen see ruinous competition from foreigners, economists see the wonder of comparative advantage. When laymen see dangerous downsizing, economists see wealth-enhancing reallocation of labor. When laymen see decline, economists see progress.[5]While critics of the economics profession like to attribute these patterns to economists’ affluence, job security, and/or right-wing ideology, the facts are not with them. Controlling for income, income growth, job security, gender, and race only mildly reduces the size of the lay-expert belief gap. And, since the typical economist is actually a moderate Democrat, controlling for party identification and ideology makes the lay-expert belief gap get a little bigger. Economists think that markets work well not because of their extreme right-wing ideology, but despite their mild left-wing ideology.
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Consider the case of immigration policy. Economists are vastly more optimistic about its economic effects than the general public. The Survey of Americans and Economists on the Economy asks respondents to say whether “too many immigrants” is a major, minor, or non-reason why the economy is not doing better than it is. 47% of non-economists think it is a major reason; 80% of economists think it is not a reason at all. Economists have many reasons for their contrarian position: they know that specialization and trade enrich Americans and immigrants alike; there is little evidence that immigration noticeably reduces even the wages of low-skilled Americans; and, since immigrants are largely young males, and most government programs support the old, women, and children, immigrants wind up paying more in taxes than they take in benefits.[9]
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Democracy is a popularity contest. If the average voter believes that less immigration is best for society, democracy rewards politicians who oppose immigration. This does not necessarily mean that elected officials cynically pander to the prejudices of the public. Our leaders might have gotten to the top of the political game because they sincerely share popular prejudices. Regardless of what is going on in politicians’ hearts and minds, though, we can expect democracy to listen to the average voter, even when he is wrong. The empirical evidence indicates that he often is.
How are such misconceptions possible, and how can the public keep making the same mistakes, year after year, from the time of Adam Smith to today?
Public choice economists are used to blaming what they call “rational ignorance.” In elections with millions of voters, the personal benefits of learning more about policy are negligible, because one vote is so unlikely to change the outcome. So why bother learning?In my book, however, I argue that rational ignorance has been oversold. Rational ignorance cannot explain why people gravitate toward false beliefs, rather than simply being agnostic. Neither can it explain why people who have barely scratched the surface of a subject are so confident in their judgments — and even get angry when you contradict them. Why, to return to the case of immigration, do people leap to the conclusion that immigration is disastrous, and have trouble holding a civil conversation with someone who disagrees?
My view is that these are symptoms not of ignorance, but of irrationality. In politics as in religion, some beliefs are more emotionally appealing than others. For example, it feels a lot better to blame sneaky foreigners for our economic problems than it does to blame ourselves. This creates a temptation to relax normal intellectual standards and insulate cherished beliefs from criticism — in short, to be irrational.
But why are there some areas — like politics and religion — where irrationality seems especially pronounced? My answer is that irrationality, like ignorance, is sensitive to price, and false beliefs about politics and religion are cheap.[10] If you underestimate the costs of excessive drinking, you can ruin your life. In contrast, if you underestimate the benefits of immigration, or the evidence in favor of the theory of evolution, what happens to you? In all probability, the same thing that would have happened to you if you knew the whole truth.
In a sense, then, there is a method to the average voter’s madness. Even when his views are completely wrong, he gets the psychological benefit of emotionally appealing political beliefs at a bargain price. No wonder he buys in bulk.
Unfortunately, the social cost of irrationality can be high even though it is individually beneficial. If one person pollutes the air, we barely notice; but if millions of people pollute the air, life can be very unpleasant indeed. Similarly, if one person holds irrational views about immigration, we barely notice; but if millions of people share these irrational views, socially harmful policies prevail by popular demand.
You should probably read the whole article.