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Wednesday, August 01, 2007
John Stossel :: Townhall.com Columnist
Economic Illiteracy
by John Stossel
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With unemployment at 10.2%, what will happen by the end of Obama's first term?



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. Make-work 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, anti-immigration 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.

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About The Author
John Stossel blogs at http://blogs.abcnews.com/johnstossel/ is an award-winning news correspondent and author of Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know is Wrong.
 
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©Creators Syndicate
Illegal Immigration Benefits
Legal immigration is good. It gives our dynamic economy an increase in taxpayers.

Illegal immigration is better. It gives workers absolute flexibility to change companies and indistries without having to change visa sponsors. And they still pay sales taxes.

Let's use the increase in both legal and illegal immigration to break the back of the socialist welfare state.

The INS has always been a beauracracy on par with the FDA or EPA. Anyone that cannot see that is color blind.

BTW, it is a very poor use of our border patrol to chase down juan gomez trying to get into our country to wash dishes. Legalize the workers. I want the only ones trying to sneak into our country to be drug dealers or terrorists.

Mas Lib: The REAL Economic Fact Quiz
True or False: Enforcement costs associated with the Estate Tax render it essentially revenue neutral, making it solely a wealth-confiscation tool with no benefit to the federal treasury?
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