More thoughts on Caplan's theory of "rational irrationality"
In Myth of the Rational Voter, Bryan Caplan argues that the measured biases in voters beliefs can be explained by what he terms “rational irrationality”. Namely, the safer (less costly) it is to hold irrational beliefs the more people will indulge in such beliefs. Going back to basics, individual choice is determined by two factors: “tastes” and “constraints”.
Economists usually assume tastes to be constant and explain changes of the (aggregate) choices by pointing to changes in the constraints (or opportunities). What Caplan does in the book is analyze, in the context of the democratic political process, how the tastes (preferences) of the voters, which one should take as given, interact with various changing constraints.
So if the words “bias” and “irrational” somehow offend your sensibilities (they shouldn’t), just replace them with the word “taste” or “preference”. Once this is understood, one might then focus on explaining the changes in voter’s attitude by looking at the constraints that voters face. So for instance, people who live under a dictatorship might actually be forced, at gun point, into believing that nationalism is a good thing, or that the state should own the means of production. On the other hand, the Brits who lived on a pretty infertile island were somehow forced to believe that free trade was a good thing.
Caplan observes some pretty marked preferences in the US electorate regarding value judgments about the minimum wage, or the benefits of markets. No one should be shocked to learn that the average belief is quite different from the economists average belief. But what the economics theory might require is a discussion of the trends: are people becoming more and more skeptical about markets, or less and less so? And if possible then try to find explanations for these trends.