“Economic Illiteracy”
by John Stossel
8/1/07
When I speak on college campuses, students often
ask what can be done about the "problem" of young
people who don't care enough to vote. I always say
that I don't see it as much of problem "because most
of you don't know anything yet. I'm OK with you not
voting!" The students laugh, but I'm not joking.
It wasn't until I was about 40 that I started to believe I
had acquired a good sense of what domestic policies
might serve people well. (I still have no clue about
international affairs.) I only started to think I knew
what ought to be done after years of reporting and
reading voraciously to absorb arguments from left
and right. The idea that most voters vote without
having done much of that work is, frankly, scary.
I'm not alone in this concern. An economist at
George Mason University, Bryan Caplan, says few
people think about their vote or even see any benefit
in doing so. His new book, "The Myth of the Rational
Voter: Why Democracies Choose Bad Policies",
argues that most voters cast their ballot on the basis
of irrational biases about economic matters. That's
why so many candidates hostile to free markets,
profits, free world trade and immigration get elected.
People tend to acquire their wrong opinions about
economic policy packaged in worldviews they
inherited while growing up. They never test their
views against the evidence because that would be
unsettling. No one likes having his worldview
challenged. So people vote for candidates who make
them feel good. They vote irrationally.
Caplan stresses that most voters see no reason to do
otherwise because they don't bear the consequences
of their choices. This irrationality does not carry over
into their personal lives because there they bear the
brunt of their own decisions. But when irrationality is
free, notes Caplan, people will indulge their biases.
Caplan divides them into three categories: antimarket
bias, antiforeign bias, make-work bias and
pessimistic bias. Antimarket bias describes people
feeling that trade and profit are zero-sum games, that
one person's gain is another person's loss. They
haven't learned that free exchange is win-win and that
in a free market, profit comes from cost-cutting
innovation. Antiforeign bias, perhaps a vestige of
primitive man, consists of distrusting "them" even
though our prosperity increases according to how
global the division of labor is. Foreigners don't want
to invade us; they want to sell us useful things. Makework bias is the belief that what makes us rich is
jobs, rather than goods, and so anything that
eliminates jobs is bad. If that were really true, we
could prosper by outlawing all inventions created
after 1920. Think of all the jobs that would create!
Finally, pessimistic bias is the view that any
economic problem is proof of general decline. Lots of
people actually think we're poorer than our
grandparents were!
As a result of these biases, people often support price
controls, foreign-trade barriers and laws against job
"outsourcing," and oppose immigration. Most
economists are eager to demonstrate that these
policies are bad for society, but most people aren't
interested in evidence. They're interested in what
confirms their worldview and makes them feel good.
So they often vote for protectionists, antiimmigration advocates and other opponents of the
free market.
Caplan's book isn't calculated to cheer up those of us
who favor more market and less democracy. He
offers some solutions that aren't likely to be adopted
any time soon, such as permitting only the
economically literate to vote, or giving them more
votes, or eliminating get-out-the-vote campaigns
(which serve only to get out the uneducated vote).
More practically, he thinks that "Everyone who
knows some economics" should grab every
opportunity to teach it. That's what I try to do with
my "20/20" segments, television specials and the
Stossel in the Classroom program, which brings
economic ideas to high-school and college
classrooms.
I hope we will create some rational voters in the
process.
John Stossel is an award-winning news
correspondent and author of Myths, Lies, and
Downright Stupidity: Get Out the Shovel--Why
Everything You Know is Wrong.