FreedomTalks

I just read a great article by George Mason University professor Bryan Caplan in the October edition of Reason magazine. Although I could not find a link to the article online, you can pick up the print version at any bookstore.

The article is an excerpt from Caplan’s book The Myth of the Rational Voter: Why Democracies Choose Bad Policies. 

Here are some of his key points.

1. There is a general anti-market bias, “a tendency to underestimate the economic benefits of the market mechanism.”

2. There is an anti-foreign bias, “a tendency to underestimate the economic benefits of interaction with foreigners.” This particular bias leads to protectionist leanings and irrational fear of buying goods from other countries.

3. There is a “make-work” bias. Saving labor, producing more goods with fewer hours, is widely perceived not as progress but as a danger.

4. There is a pessimistic bias, “a tendency to overestimate the severity of economic problems and underestimate the economy’s performance in the recent past, the present, and the future.

Caplan concludes the article with the following:

Students of economics are not blank slates for their teachers to write on. They arrive with strong prejudices. They underestimate the benefits of markets…

And in doing all that underestimating, they overestimate both the need for the government to solve these purported problems and the likely efficacy of its solutions.

Well said, indeed.

This entry was posted on Thursday, September 13th, 2007 at 2:55 pm and is filed under Trade. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.