After some recent elections, it appears that our politicians think that voters are irrational. From the evidence at hand, namely, the lack of voters’ judgement, that conclusion may appear to be justified.
Most people are not well informed about most things. They fail to understand how our economy functions and are not well informed about complex legislation. However, despite that, there is something called the "miracle of aggregation," that is in plain English, the "wisdom of crowds." While voting patterns seem random, the public oftentimes is aware of the real facts of a situation. Examples abound. In the 1930s, the public was way ahead of politicians in appreciating the menace of Nazi Germany. More recently, the general population recognized the futility of the wars in Afghanistan and Iraq, whereas politicians went blindly (stupidly) ahead.
In the political sphere, things are different. Bryan Caplan, an economics professor at George Mason University, cites reasons that voters show an absence of common sense. They do not vote randomly. Instead, he said, they opt for policies that are counter-productive. Voters fail to recognize that profits are not bad, but rather they lead to public benefits, from rising tax revenues to more employment. Furthermore, most emphasize job creation, not the production of goods and services. They have an anti-foreign bias, not realizing that imports and international trade are the lifeblood of our economy. Then too, Professor Caplan believes that voters are too pessimistic.
In rebuttal to Mr. Caplan, one can state that frequently the public is smarter than so-called experts, even though the electorate may be illogical on occasion. Pundits blame high oil prices on supply and demand but the populace correctly is aware of price gouging.
Of course the production of goods and services is important; job creation has merits that Mr. Caplan derides. In some circumstances, even make-work helps the economy. In the depths of the 1930s depression, make-work was a moral imperative, but it also helped to restore the health of the economy. Still, if people shift from less productive occupations to more productive ones, that should be an important consideration in the job picture. Thus, banning self-service banking of gasoline stations to retain jobs is not a sensible idea, as workers always should be used as productively as possible.
Professor Caplan is incorrect in his assertion that voters are too pessimistic. While the public had been inclined to look back to the 1950s and 1960s to the dismal 1930s, after decades of prosperity, most are overly optimistic now, ignoring the serious problems confronting the economy.
For all those reasons then, one can say that the electorate often acts irrationally, but on occasion voters demonstrate the "wisdom of crowds."
