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594 May 29, 2007

The Myth of the Rational Voter

Why Democracies Choose Bad Policies
by Bryan Caplan

Executive Summary

In theory, democracy is a bulwark against greed and the public interest. I call this anti-mar-
socially harmful policies. In practice, however, ket bias. They underestimate the benefits of
democracies frequently adopt and maintain poli- interaction with foreigners. I call this anti-foreign
cies that are damaging. How can this paradox be bias. They equate prosperity not with produc-
explained? tion, but with employment. I call this make-work
The influence of special interests and voter bias. Finally, they are overly prone to think that
ignorance are two leading explanations. I offer economic conditions are bad and getting worse.
an alternative story of how and why democracy I call this pessimistic bias.
fails. The central idea is that voters are worse In the minds of many, Winston Churchills
than ignorant; they are, in a word, irrationaland famous aphorism cuts the conversation short:
they vote accordingly. Despite their lack of Democracy is the worst form of government,
knowledge, voters are not humble agnostics; except all those other forms that have been tried
instead, they confidently embrace a long list of from time to time. But this saying overlooks the
misconceptions. fact that governments vary in scope as well as
Economic policy is the primary activity of the form. In democracies the main alternative to
modern state. And if there is one thing that the majority rule is not dictatorship, but markets. A
public deeply misunderstands, it is economics. better understanding of voter irrationality advis-
People do not grasp the invisible hand of the es us to rely less on democracy and more on the
market, with its ability to harmonize private market.

Bryan Caplan is an associate professor of economics at George Mason University and an adjunct scholar at the Cato
Institute. This study is an excerpt from Caplans book, The Myth of the Rational Voter: Why Democracies
Choose Bad Policies (Princeton University Press, 2007).
Voters are worse agnostics; instead, they confidently embrace
than ignorant; they Introduction: The Paradox a long list of misconceptions.

are, in a word, of Democracy When cataloging the failures of democra-

cy, one must keep things in perspective. The
irrationaland In a dictatorship, government policy is often shortcomings of democracy pale in compari-
appalling but rarely baffling. The building of son with those of totalitarian regimes.
vote accordingly. the Berlin Wall sparked worldwide outcry, but Democracies do not murder millions of their
few wondered, what are the leaders of East own citizens. Fair enough, but such compar-
Germany thinking? That was obvious: they isons set the bar too low. Now that democra-
wanted to continue ruling over their subjects, cy is the most common form of government,
who were inconsiderately fleeing en masse. there is little reason to dwell on the truism
No wonder democracy is such a popular that it is better than communism. It is now
political panacea. The history of dictator- more worthwhile to figure out how and why
ships creates a strong impression that bad democracy falls short.
policies exist because the interests of rulers In the minds of many, one of Winston
and ruled diverge. A simple solution is make Churchills most famous aphorisms cuts the
the rulers and the ruled identical by giving conversation short: Democracy is the worst
power to the people. If the people decide to form of government, except all those other
delegate decisions to full-time politicians, so forms that have been tried from time to
what? Those who pay the piperor vote to time.4 But this saying overlooks the fact that
pay the pipercall the tune. governments vary in scope as well as form. In
This optimistic story is, however, often at democracies the main alternative to majority
odds with the facts. Democracies frequently rule is not dictatorship, but markets.
adopt and maintain policies harmful for most Economists have an undeserved reputa-
people.1 Protectionism is a classic example. tion for religious faith in markets. No one
Economists across the political spectrum have has done more than economists to dissect
pointed out its folly for centuries, but almost the innumerable ways that markets can fail.
every democracy restricts imports. Admittedly, After all their investigations, though, econo-
this is less appalling than the Berlin Wall, yet it mists typically conclude that the man in the
is more baffling. In theory, democracy is a bul- streetand the intellectual without econom-
wark against socially harmful policies, but in ic trainingunderestimates how well mar-
practice it gives them a safe harbor. kets work. I maintain that something quite
How can this paradox be explained? One different holds for democracy: it is widely
answer is that the peoples representatives overrated not only by the public but by most
have turned the tables on them.2 Elections economists, too. Thus, while the general pub-
might be a weaker deterrent to misconduct lic underestimates how well markets work,
than they seem on the surface, making it more even economists underestimate markets
important to please special interests than the virtues relative to the democratic alternative.
general public. A second answer, which com-
plements the first, is that voters are deeply
ignorant about politics.3 They do not know Is the Miracle of
who their representatives are, much less what Aggregation Just Wishful
they do. This tempts politicians to pursue per-
sonal agendas and sell themselves to donors.
I offer an alternative story of how democ- What voters dont know would fill a uni-
racy fails. The central idea is that voters are versity library. In the last few decades, econo-
worse than ignorant; they are, in a word, irra- mists who study politics have thrown fuel on
tionaland vote accordingly. Despite their the fire by pointing out thatselfishly speak-
lack of knowledge, voters are not humble ingvoters are not making a mistake. One

vote has so small a probability of affecting the prize? Whoever has the support of a majority of
electoral outcomes that a realistic egoist pays the well-informed.
no attention to politics; he chooses to be, in This result has been aptly named the mira-
economic jargon, rationally ignorant. cle of aggregation.8 It reads like an alchemists
The vast empirical literature on voter recipe: mix 99 parts folly with 1 part wisdom to
knowledge bears this out.5 Almost all econo- get a compound as good as unadulterated wis-
mists and political scientists now accept that dom. An almost completely ignorant electorate
the average citizens level of political knowl- makes the same decision as a fully informed
edge is extraordinarily low. At the same time, electoratelead into gold, indeed!
however, scholars have also largely come to It is tempting to call this voodoo poli-
believe that this doesnt really matter, because tics, or quip, as H. L. Mencken did, that
democracy can function well under almost democracy is a pathetic belief in the collec-
any magnitude of voter ignorance.6 tive wisdom of individual ignorance. But
How is this possible? Assume that voters there is nothing magical or pathetic about it.
do not make systematic errors. Though they James Surowiecki documents many instances
err constantly, their errors are random.7 If where the miracle of aggregationor some-
voters face a blind choice between X and Y, thing akin to itworks as advertised.9 In a
knowing nothing about them, they are equal- contest to guess the weight of an ox, the average
Almost all
ly likely to choose either. of 787 guesses was off by a single pound. On respectable
With 100 percent voter ignorance, matters Who Wants to Be a Millionaire, the answer most modern economic
are predictably grim. One candidate could be popular with studio audiences was correct 91
the Unabomber, plotting to shut down civiliza- percent of the time. Financial markets theories of politics
tion. If voters choose randomly, the Unabomber which aggregate the guesses of large num- begin by assuming
wins half the time. True, the assumption of zero bers of peopleoften predict events better
voter knowledge is overly pessimistic; informed than leading experts. Betting odds are excel-
that the typical
voters are rare, but they do exist. But this seems lent predictors of the outcomes of everything citizen
a small consolation. One hundred percent igno- from sporting events to elections. In each understands
rance leads to disaster. Can 99 percent ignorance case, the logic enunciated by political scien-
be significantly better? tists Benjamin Page and Robert Shapiro economics and
Yes. Democracy with 99 percent ignorance applies: votes accordingly.
looks a lot more like democracy with full
information than democracy with total igno- This is just an example of the law of
rance. Why? First, imagine an electorate large numbers. Under the right condi-
where 100 percent of all voters are well- tions, individual measurement errors
informed. Who wins the election? Trivially, will be independently random and will
whoever has the support of a majority of the well- tend to cancel each other out. Errors in
informed. Next, switch to the case where only one direction will tend to offset errors
1 percent of voters are well-informed. The in the opposite direction.10
other 99 percent are so thick that they vote at
random. Quiz a person waiting to vote, and Judging from research in recent decades,
you are almost sure to conclude, with alarm, most economists find this logic compelling.
that he has no idea what he is doing. Almost all respectable modern economic
Nevertheless, it is basic statistics thatin a theories of politics begin by assuming that
large electorateeach candidate gets about the typical citizen understands economics
half of the random votes. Both candidates and votes accordinglyat least on average.11
can bank on roughly a 49.5 percent share. Yet Nor is this view limited to apologists for the
that is not enough to win. For that, they status quo. Some of the sternest critics of
must focus all their energies on the one well- government regulation nevertheless scoff at
informed person in a hundred. Who takes the assumption of systematic voter bias.

Legendary Chicago economist George Stigler nomics.15 People do not grasp the invisible
is a case in point: hand of the market and its ability to harmo-
nize private greed and the public interest. I call
The assumption that public policy has this anti-market bias. They underestimate the
often been inefficient because it was benefits of interaction with foreigners. I call
based on mistaken views has little to this anti-foreign bias. They equate prosperity
commend it. To believe, year after year, not with production, but with employment. I
decade after decade, that the protective call this make-work bias. Lastly, they are overly
tariffs or usury laws to be found in prone to think that economic conditions are
most lands are due to confusion rather bad and getting worse. I call this pessimistic bias.
than purposeful action is singularly If voters base their policy preferences on
obfuscatory.12 deeply mistaken models of the economy, gov-
ernment is likely to perform its bread and but-
The bottom line is that if the miracle of aggre- ter function poorly. To see this, suppose that
gation is true, then democracy can work, even two candidates compete by taking positions
with a morbidly ignorant electorate. Demo- on the degree of protectionism they favor.
cracy gives equal say to the wise and the not- Random voter errors about the effect of protec-
so-wise, but the wise determine policy. tion cause some voters who prefer the effect of
Belaboring the electorates lack of knowledge free trade to vote for protection. But it is equal-
with study after study is beside the point. ly common for voters who prefer the effect of
But there is another kind of empirical evi- protection to vote for free trade (see Figure
dence that can discredit the miracle of aggre- 1).16 Then the miracle of aggregation holds: in
gation. The miracle only works if voters do spite of voter ignorance, the winning platform
not make systematic errors. This suggests that is socially optimal.
instead of rehashing the whole topic of voter For anyone who has taught international
error, we concentrate our fire on the critical economics, though, this conclusion is under-
and relatively unexplored question: Are voter whelming. It takes hours of patient instruc-
errors systematic?13 tion to show students the light of compara-
There are good reasons to suspect so. Our tive advantage. After the final exam, there is a
average guess about the weight of oxen is distressing rate of recidivism. Suppose we
dead on. But cognitive psychology catalogs a adopt the more realistic assumption that vot-
long list of other questions where our average ers systematically overestimate the benefits
guess is systematically mistaken.14 That body of protection. What happens? Lots of people
of research ought to open our minds to the vote for protection who prefer the effect of
possibility of systematic voter error. free trade, but only a few vote for free trade
By itself, though, the psychological litera- who prefer the effect of protection (see
ture does not get us very far. The link Figure 2). The political scales tilt out of bal-
between general cognition and particular ance; the winning platform is too protection-
political decisions is too loose. Voters might ist. The median voter would be better off if he
be bad statisticians but perceptive judges of received less protection than he asked for. But com-
wise policy. Thus, we should refine our ques- petition impels politicians to heed what vot-
tion: Are voter errors systematic on questions of ers ask for, not what is best for them.
Are voter errors direct political relevance? Comparable biases plausibly underlie policy
My answer is an emphatic yes. Economic after policy. For example, the law of supply and
systematic on policy is the primary activity of the modern demand says that above-market prices create
questions of state, making voter beliefs about economics unsaleable surpluses, but that has not stopped
among the mostif not the mostpolitically most of Europe from regulating labor markets
direct political relevant beliefs. And if there is one thing that into decades of depression-level unemploy-
relevance? the public deeply misunderstands, it is eco- ment.17 The most credible explanation is that

Figure 1
The Median Voter Model: Random Error

Figure 2
The Median Voter Model: Systematic Error

the average voter sees no link between artificial- public deeply disagree, what reason is there
ly high wages and unemployment. Before I to side with the experts, anyway? Perhaps it is
studied economics, I failed to see it myself. the experts who are biased.
I draw on several different bodies of evidence
to answer those questions. To pin down what
Systematically Biased economists have been criticizing, I provide Economists have
Beliefs about Economics some historic examples. To explain where the been complaining
public goes wrong, I summarize the main argu- about anti-market,
Economists have been complaining about ments that economists have made in the past
anti-market, anti-foreign, make-work, and and that textbooks still make today. To esti- anti-foreign,
pessimistic biases for centuries. But what mate the prevalence of these biases, I rely on a make-work, and
exactly have economists been criticizing? large body of surveys from recent decades.
Where does the public go wrong? How preva- But what about the hardest objection of
pessimistic biases
lent are these biases? And if experts and the all? Isnt it possible that the bias lies in the for centuries.

It is not lack experts, rather than the public? If one finds them the best economic arguments
of consensus the economists of the past and the textbooks in favor of them. . . . The economists
of the present convincing, this question answer is typically something like,
that incenses becomes less interesting. But the critics of the There are no good economic argu-
knowledgeable economics profession do make some disturb- ments for your proposal.20
ing accusations about the fields objectivity.
critics, but The most common doubt about econo- Unsurprisingly, critics rarely change their
the way mists stems from their apparent inability to minds once they notice how regularly econo-
economists agree, bestcaptured by George Bernard mists agree. Instead, they typically shift to the
Shaws line that if all economists were laid argument that the experts are biased. Biased
unite behind end to end, they would not reach a conclu- how? There are two prominent stories. The
unpalatable sion.18 But economists hard-core detractors first is that economists suffer from self-serv-
recognize the superficiality of this complaint. ing bias. Economists are unusually affluent,
conclusions. They know that economists regularly see eye- tenured, white, and male, and supposedly
to-eye with one another. A quip from Steven confuse what is good for them with what is
Kelman directly contradicts Shaw: good for the country. The second is that
economists suffer from right-wing ideologi-
The near-unanimity of the answers cal bias. They use economics to give scientif-
economists give to public policy ques- ic respectability to their political prejudices.
tions, highly controversial among the Fortunately, there is one excellent data set
run of intelligent observers, but which that allows us to bring these accusations to trial:
share the characteristic of being able to the Survey of Americans and Economists on
be analyzed in terms of microeconomic the Economy (henceforth SAEE).21 This unique
theory, reminds one of the unanimity study, conducted by the Washington Post, Kaiser
characterizing bodies such as the polit- Family Foundation, and Harvard University
buro of the Soviet Communist Party.19 Survey Project, asked 1,510 members of the
general public and 250 PhD economists the
It is not lack of consensus that incenses same diverse set of questions about how the
knowledgeable critics, but the way econo- economy works. The SAEE strongly supports
mists unite behind unpalatable conclusions, the view that economists and the public sharply
such as doubts about the benefits of regula- disagree in predictable ways. More importantly,
tion. Kelman bemoans the fact that even though, the survey also collected detailed infor-
economists in the Carter administration mation about the respondents: income, job
were economists first and liberals second: security, race, gender, party identification, ideol-
ogy, and much more.
At the government agency where I have The upshot is that we can statistically test
worked and where agency lawyers and whether the vast belief differences between econ-
agency microeconomists interact with omists and the public are just a byproduct of
each other . . . the lawyers are often economists privileged circumstances, a right-
exasperated, not only by the frequency wing orientation, or both. In other words, we
with which agency economists attack can use the data to run a thought experiment:
their proposals but also by the una- What would a person with average income, aver-
nimity among the agency economists age job security, average party identification,
in their opposition. The lawyers tend average ideology, average everything, think if he
to (incorrectly) attribute this opposi- had a PhD in economics? I call such a person a
tion to failure to hire a broad enough member of the enlightened publicsomeone
spectrum of economists, and to beg who combines the circumstances of the layman
the economists, if they cant support with the knowledge of the expert.22
the lawyers proposals, at least to give If the critics of the economics profession

were completely rightif the sole reasons for mists. Out of the SAEEs 37 questions, there are
economists unusual views were self-serving 19 where economic training and education
and/or ideological biasthen the enlightened move together and only two where they move
public and the actual public would see eye-to- apart. It is not merely members of one inbred
eye. If the critics of the economics profession discipline who diverge from mainstream opin-
were completely wrongif self-serving and ion. So do educated Americans in general,
ideological bias had nothing to do with econ- with the degree of divergence rising with the
omists unusual viewsthen the enlightened level of education. And the magnitude is sub-
public and economists would see eye-to-eye. stantial. Moving from the bottom of the edu-
The world turns out to be much closer to cational ladder to the top has more than half
the second extreme than the first. Self-serv- of the (enormous) effect of an econ PhD.24
ing bias accounts for less than 20 percent of This pattern is all the more compelling
the belief gap between economists and lay- because it has parallels in other fields. Take
men. Controlling for ideological bias actual- political knowledge. Education substantially
ly seems to slightly increase the size of the improves performance on objective tests about
belief gap. How is this possible? Because con- government structure, leaders, and current
trary to popular belief, economists tend to be events.25 Kraus, Malmfors, and Slovic similarly
moderate Democrats, not conservative Repub- find that education makes members of the gen-
Economists are
licans. Economists are unusually favorable eral public think more like toxicologists.26 unusually
toward markets not because of their extreme Perhaps education just increases exposure to favorable toward
right-wing perspective, but despite their mildly brainwashing. But it is more likely that educat-
left-wing perspective.23 ed people think more clearly and know more. markets despite
Shooting down the leading opponents of With the most fundamental doubts about their mildly
the economists right, public wrong posi- the economics profession out of the way, we
tion does not prove that it is true. But it sig- are now ready to proceed. Economists have
nificantly increases the probability. Think of been complaining about laymens economic perspective.
it this way: common sense advises us to trust misconceptions for centuries. What seems to
the experts. Critics challenge the experts be the problem?
objectivity, and their complaints turn out to
be in error. The sensible response is to reaf- Anti-Market Bias
firm the common sense position. Indeed, I first learned about farm price supports
after the strongest challengers fail, we should in the produce section of the grocery store. I
become more confident that economists are was in kindergarten. My mother explained
right and the public is wrong. that price supports seemed to make fruits and
There is no reason, then, to deny econo- vegetables more expensive, but assured me
mists a normal level of deference in their field that this conclusion was simplistic. If the
of expertise. But the profession also deserves supports went away, so many farms would go
an affirmative defense. Frankly, the strongest out of business that prices would soon be
reason to accept its reliability is to flip higher than ever. If I had been more preco-
through a basic economics text, then read the cious, I would have asked a few questions.
SAEE questions for yourself. You may not be Were there price support programs for the
fully convinced of economists wisdom. I, other groceries? Why not? As it happened,
too, doubt it on occasion. But it is hard to though, I accepted what she told me, and felt
avert your gaze from the publics folly. Time a lingering sense that price competition is
and again, it gravitates toward answers that bad for buyer and seller alike.
are positively silly. This was one of my first memorable
If that is too subjective for you, an impres- encounters with anti-market bias, a tendency
sive empirical regularity points in the same to underestimate the economic benefits of the market
direction: education makes people think like econo- mechanism.27 The public has severe doubts

about how much it can count on profit-seek- attached movement of wealth from one per-
ing business to produce socially beneficial out- son to another). All that matters, then, is how
comes. It focuses on the motives of business, much you empathize with the transfers recip-
and neglects the discipline imposed by com- ient compared to the transfers provider. To
petition. While economists admit that profit- take the classic case: People tend to see profits
maximization plus market imperfections can as a gift to rich. So unless you perversely pity
yield bad results, non-economists tend to view the rich more than the poor, limiting profits
successful greed as socially harmful per se. seems like common sense.
Near the end of his life, Joseph Schumpeter Economists across the ideological spec-
eloquently captured the essence of anti-mar- trum find it hard to respond to this outlook
ket bias: with anything but derision. Profits are not a
handout, but a quid pro quo: If you want to
Capitalism stands its trial before get rich, then you have to do something peo-
judges who have the sentence of death ple will pay for. Profits give incentives to
in their pockets. They are going to pass reduce production costs, move resources
it, whatever the defense they may hear; from less-valued to more-valued industries,
the only success victorious defense can and dream up new products. This is the cen-
possibly produce is a change in the tral lesson of The Wealth of Nations: the invisi-
indictment.28 ble hand quietly persuades selfish business-
men to serve the public good:
Arguably the greatest historian of eco-
nomic thought, Schumpeter elsewhere mat- Every individual is continually exerting
ter-of-factly speaks of the ineradicable preju- himself to find out the most advanta-
dice that every action intended to serve the geous employment for whatever capi-
profit interest must be anti-social by this fact tal he can command. It is his own
alone.29 Considering his encyclopedic advantage, indeed, and not that of the
knowledge, this remark speaks volumes. society, which he has in view. But the
Anti-market bias is not a temporary, cultural- study of his own advantage naturally,
ly specific aberration. It is a deeply rooted or rather necessarily leads him to pre-
pattern of human thinking which has frus- fer that employment which is most
trated economists for generations. advantageous to the society.32
Liberal Democratic economists echo and
amplify Schumpeters theme. Charles For modern economists, these are tru-
Schultze, head of President Carters Council isms, but they usually miss the deeper lesson.
of Economic Advisers, proclaims that har- If Adam Smiths observations are only tru-
nessing the base motive of material self-inter- isms, why did he bother to write them? Why
est to promote the common good is perhaps do teachers of economics keep quoting and
the most important social invention mankind re-quoting this passage? Because Smiths thesis
has yet achieved.30 But politicians and voters was counterintuitive to his contemporaries, and
fail to appreciate this invention. The virtually remains counterintuitive today. A truism for the
universal characteristic of [environmental] few is heresy for the many. Smith, being well
policy . . . is to start from the conclusion that aware of this fact, tried to shock readers out
regulation is the obvious answer; the pricing of their dogmatic slumber: By pursuing his
alternative is never considered.31 own interest he frequently promotes that of
Anti-market bias There are too many variations on anti-mar- the society more effectually than when he
has frustrated ket bias to list them all. Probably the most really intends to promote it. I have never
common is to equate market payments with trans- known much good done by those who affect-
economists for fers, ignoring their incentive properties. (A ed to trade for the publick good.33 Business
generations. transfer, in economic jargon, is a no-strings- profit appears to be a transfer but benefits

Figure 3
Business profits are too high.



Enlightened Public

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
0= not a reason at all 1= minor reason 2= major reason

society; business philanthropy appears to The idea that supply and demand usually The public
benefit society but is at best a transfer. control prices is hard to accept. Even in
To get an idea of how counterintuitive industries with many firms, noneconomists perceives profit
Smiths thesis remains, we can turn to a telling treat prices as a function of their CEOs inten- as a lump-sum
question from the SAEE. Respondents were tions and conspiracies. Economists under- transfer to
asked to evaluate various explanations for why stand, however, that collusion is a prisoners
the economy is not doing better than it is. dilemma. If an industry has more than a business.
One of the candidates was business profits handful of firms, industrywide conspiracies
are too high. Figure 3 shows the results. are unlikely to succeed.
Economists scoff at the idea that excessive The SAEE has a nice question to illustrate
profits are hurting the economy. The public, this point. Back in 1996, it asked, Which do
in contrast, takes the problem seriously. And you think is more responsible for the recent
while critics of the economics profession increase in gasoline prices? Respondents
might like to attribute the pattern to self- chose between the normal law of supply and
serving bias, the results for the enlightened demand and oil companies trying to
public support a curt rejoinder. Anyone with a increase their profits. As Figure 4 shows,
Ph.D. in economics, rich or poor, left or right, where economists see prices governed by
would basically tell you the same. market forces, the public sees monopoly or
Part of the publics error is quantitative. It collusion. The numbers for the enlightened
wildly overestimates the rate of profit enjoyed public confirm that economists do not dis-
by the typical business, with an average guess sent just because they are too rich to worry
near 50 percent.34 But the disagreement is deep- about how much it costs to fill their gas tank.
er. Through the prism of anti-market bias, the The real problem is not that economists
public perceives profit as a lump-sum transfer are out of touch, but that the publics story
to business. Economists, in contrast, recognize makes no sense. If gas prices rise because oil
it as the motor of progress as well as flexibility. companies are trying to increase their prof-
The second most prominent avatar of its, why do gas prices ever fall? Do oil com-
anti-market bias is monopoly theories of price. panies feel generous and decide to cut their
Economists obviously acknowledge that profits? Basic economics, in contrast, has an
monopolies exist. But the public habitually elegant explanation: if the cost of inputs falls,
makes monopoly a scapegoat for scarcity. so does the profit-maximizing price.

Figure 4
Which do you think is more responsible for the recent increase in gasoline prices?



Enlightened Public

0.00 0.20 0.40 0.60 0.80 1.00

0=oil companies trying to increase their profits 1=the normal law of
supply and demand

Collusion aside, the publics implicit that the benefits of markets remain controver-
model of price determination is that busi- sial. To understand their conversation, you
nesses are monopolists of variable altruism. have to notice what economists are not debat-
If a CEO feels greedy when he wakes up, he ing. They are not debating whether prices give
raises his priceor puts low-quality merchan- incentives, or if a vast business conspiracy runs
dise on the shelves. Nice guys charge fair the world. Almost all economists recognize
prices for good products; greedy scoundrels the core benefits of the market mechanism;
gouge with impunity for junk. It is only a they disagree only at the margin.
short step for market skeptics to add and
nice guys finish last. As John Mueller Anti-Foreign Bias
emphasizes, the public links greed with A shrewd businessman I know has long
almost everything bad: capitalism is com- thought that everything wrong in the
monly maligned for the deceit, unfairness, American economy could be solved with two
dishonesty, and discourtesy that are widely expedients:
taken to be the inevitable consequences of its
apparent celebration of greed.35 1. A naval blockade of Japan.
Where does the public go wrong? For one 2. A Berlin Wall at the Mexican border.
thing, asking for more can get you less. Giving
your boss the ultimatum double my pay or I This is only a mild caricature of his posi-
quit usually ends badly. The same holds in tion, which is all the more puzzling because he
business: raising price and cutting quality usually gets the mutual benefits of trade. He
often lead to lower profits, not higher. does well on eBay. But like most nonecono-
Mueller makes the deeper point that many mists, he suffers from anti-foreign bias, a ten-
strategies that work as a one-shot scam back- dency to underestimate the economic benefits of
fire as routine policies. It is hard to make a interaction with foreigners.36 When outsiders
profit if no one sets foot in your store twice. emerge on the economic scene, they do a men-
It is hard to make Intelligent greed militates against deceit, tal double take: Foreigners? Could it really be
a profit if no one unfairness, dishonesty, and discourtesy mutually beneficial for us to trade with them?
because they damage the sellers reputation. Popular metaphors equate foreign trade
sets foot in your An outsider who eavesdrops on econo- with racing and warfare, so you might say that
store twice. mists discussions might get the impression anti-foreign views are embedded in our lan-

guage. Perhaps foreigners are sneakier, craftier, The SAEE amply confirms Blinders The anti-foreign
or greedier. Whatever the reason, they suppos- point. Respondents rated the severity of the outlook does not
edly have a special power to exploit us. As the economic harm caused by the fact that com-
19th century mathematician and economist panies are sending jobs overseas. Figure 5 just happen to be
Simon Newcomb explained: shows the results. wrong; it conflicts
Economists are especially critical of the
It has been assumed as an axiom which anti-foreign outlook because it does not just
with elementary
needs no proof, because none would be happen to be wrong; it conflicts with elemen- economics.
so hardy as to deny it, that foreign nations tary economics. Textbooks teach that total
cannot honestly be in favor of any trade output increases if producers specialize and
with us that is not to our disadvantage; trade. On an individual level, who could deny
that the very fact that they want to trade it? Imagine how much time it would take to
with us is a good reason for receiving their grow your own food, when a few hours wages
overtures with suspicion and obstructing spent at the grocery store feed you for weeks.
their wishes by restrictive legislation.37 Analogies between individual and social
behavior are at times misleading, but this is
Alan Blinder echoes Newcombs lament a not one of those times. International trade is,
century later. People around the world scape- as Steven Landsburg explains, a technology:
goat foreigners:
There are two technologies for produc-
When jobs are scarce, the instinct for ing automobiles in America. One is to
self-preservation is strong, and the manufacture them in Detroit, and the
temptation to blame foreign competi- other is to grow them in Iowa.
tors is all but irresistible. It was not Everybody knows about the first tech-
only in the United States that the nology; let me tell you about the second.
bunker mentality took hold. That First you plant seeds, which are the raw
most economists branded the effort to materials from which automobiles are
save jobs by protectionism shortsight- constructed. You wait a few months
ed and self-defeating was beside the until wheat appears. Then you harvest
point. Legislators are out to win votes, the wheat, load it onto ships, and sail
not intellectual kudos.38 the ships westward into the Pacific
Figure 5
Companies are sending jobs overseas.



Enlightened Public

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
0=not a reason at all 1=minor reason 2=major reason

Ocean. After a few months, the ships moms return to work by hiring Mexican nan-
reappear with Toyotas on them.39 nies. The SAEE confirms that the public is
quick to see great dangers in this process
And this is one amazing technology. The and economists and the enlightened public
law of comparative advantage, one of the to minimize them (see Figure 6).
most fascinating theorems in economics, In terms of the balance of payments, immi-
shows that mutually beneficial international gration is a nonissue. If an immigrant moves
trade is possible even if one nation is less pro- from Mexico City to New York and spends all
ductive in every way.40 Suppose an American his earnings in his new homeland, the balance
can make 10 cars or 5 bushels of wheat, and of trade does not change. Yet the public still
a Mexican can make 1 car or 2 bushels of looks on immigration as a bald misfortune:
wheat. Though the Americans are better at jobs lost, wages reduced, public services con-
both tasks, specialization and trade increase sumed. Many see a larger trade deficit as a fair
production. If one American switches from price to pay for reduced immigration. One
wheat to cars, and three Mexicans switch peculiar pro-NAFTA argument is that if we
from cars to wheat, world output goes up by admit more Mexican goods, we will have fewer
two cars plus one bushel of wheat. Mexicans.42 It should be evident, then, that the
No one loses How can anyone overlook trades remark- general public sees immigration as a distinct
sleep about the able benefits? Adam Smith, along with many dangerindependent of, and more frighten-
trade balance 18th- and 19th-century economists, identifies ing than, an unfavorable balance of trade.
the root error as misidentification of money People feel all the more vulnerable when they
between and wealth: A rich country, in the same man- reflect that these foreigners are not just selling
California and ner as a rich man, is supposed to be a country us their products. They live among us.
abounding in money; and to heap up gold and Calm reflection on the international
Nevada, or me silver in any country is supposed to be the best economy reveals much to be thankful for,
and my grocer. way to enrich it.41 It follows that trade is zero- and little to fear. On this point, economists
sum, since the only way for a country to make past and present agree. But an important
its balance more favorable is to make another proviso lurks beneath the surface. Yes, there
countrys balance less favorable. is little to fear about the international econo-
Even in Smiths day, however, his story was my itself. But modern researchersunlike
probably too clever by half. The root error behind economists of the past and teachers of the
18th-century mercantilism was an unreasonable presentrarely mention that attitudes about
distrust of foreigners. Otherwise, why would the international economy are another story.
people focus on money draining out of the Paul Krugman hits the nail on the head: The
nation, but not the region, the city, the vil- conflict among nations that so many policy
lage, or the family? In practice, human beings intellectuals imagine prevails is an illusion;
then and now commit the balance of trade falla- but it is an illusion that can destroy the reali-
cy only when other countries enter the picture. No ty of mutual gains from trade.43
one loses sleep about the trade balance between
California and Nevada, or me and my grocer. Make-Work Bias
The fallacy is not treating all purchases as a cost, I was an undergraduate when the Cold
but treating foreign purchases as a cost. War ended, and I can still remember talking
Modern conditions do make anti-foreign about military spending cuts with a conserva-
bias easier to spot. To take one prominent tive student. The whole idea made her ner-
example, immigration is far more of an issue vous. Why? Because she had no idea how a
now than it was in Smiths time. In theory, market economy would absorb the dis-
trade in labor is roughly the same as trade in charged soldiers. She did not even distinguish
goods. Specialization and exchange raise out- between short-term and long-term conse-
putfor instance, by letting skilled American quences of the cuts; in her mind, to lay off

Figure 6
There are too many immigrants.



Enlightened Public

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
0=not a reason at all 1=minor reason 2=major reason

100,000 government employees was virtually each worker is less productive. Then
equivalent to disemploying 100,000 people more labor will be required to produce
for life. Her position is particularly striking if the same bill of goods. The latter form of
you realize that her objection would apply job creation does raise employment; but
equally to spending on government programs it is the path to rags, not riches.45
thatas a conservativeshe opposed.
If a well-educated individual ideologically For an individual to prosper, he only
opposed to wasteful government spending needs to have a job. But society can prosper
thinks like this, it is hardly surprising that she only if individuals do a job, if they create
is not alone. The public often literally believes goods and services that someone else wants.
that labor is better to use than conserve. Economists have been at war with the make-
Saving labor, producing more goods with work bias for centuries. Bastiat ridicules the
fewer man-hours, is widely perceived not as equation of prosperity with jobs as Sisyphism,
progress, but as a danger. I call this make- after the mythological fully employed Greek
work bias, a tendency to underestimate the eco- who was eternally condemned to roll a boulder
nomic benefits of conserving labor.44 Where non- up a hill. In the eyes of the public:
economists see the destruction of jobs, econ-
omists see the essence of economic growth Effort itself constitutes and measures
the production of more with less. Alan wealth. To progress is to increase the
Blinder explains: ratio of effort to result. Its ideal may be
represented by the toil of Sisyphus, at
If you put the question directly, Is high- once barren and eternal.46 Saving labor,
er productivity better than lower produc- producing more
tivity? few people will answer in the neg- In contrast, for the economist: goods with fewer
ative. Yet policy changes are often sold as
ways to create jobs. . . . Jobs can be cre- [W]ealth . . . increases proportionately man-hours, is
ated in two ways. The socially beneficial to the increase in the ratio of result to widely perceived
way is to enlarge GNP, so that there will effort. Absolute perfection, whose
be more useful work to be done. But we archetype is God, consists in the widest
not as progress,
can also create jobs by seeing to it that possible distance between these two but as a danger.

Figure 7
Increased use of technology in the workplace.



Enlightened Public

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
0=bad 1=doesnt make much difference 2=good

The fundamental terms, that is, a situation in which no find a new use for their talents. Michael Cox and
effort at all yields infinite results.47 Richard Alm aptly describe this process as
defense of churn: Through relentless turmoil, the econ-
labor-saving The crudest form of make-work bias is omy re-creates itself, shifting labor resources to
Luddite fear of the machine. Common sense where theyre needed, replacing old jobs with
technology is that proclaims that machines make life easier for new ones.48 They illustrate this process with
employing more human beings. The public qualifies this naive historys most striking example: the drastic
workers than you position by noting that machines also make decline in agricultural employment:
peoples lives harder by throwing them out of
need wastes work. Economists, in contrast, doubt that the In 1800, it took nearly 95 of every 100
valuable labor. pro-technology position needs to be qualified. Americans to feed the country. In 1900,
Technology often creates new jobs; without the it took 40. Today, it takes just 3. . . . The
computer, there would be no jobs in computer workers no longer needed on farms
programming or software development. But have been put to use providing new
the fundamental defense of labor-saving tech- homes, furniture, clothing, computers,
nology is that employing more workers than pharmaceuticals, appliances, medical
you need wastes valuable labor. assistance, movies, financial advice,
Thus, when the SAEE asks respondents to video games, gourmet meals, and an
evaluate the economic effects of increased almost dizzying array of other goods
use of technology in the workplace, both and services. . . . What we have in place
laymen and experts lean in a favorable direc- of long hours in the fields is the wealth
tion. But economists are virtually unani- of goods and services that comes from
mous, and the public clearly has reservations allowing the churn to work, wherever
inspired by make-work bias (see Figure 7). and whenever it might occur.49
Economists often observe that if you pay a
worker to twiddle his thumbs, you could have Exasperating as the Luddite mentality is,
paid him to do something socially useful countries rarely move beyond rhetoric and turn
instead. Their deeper point, though, is that mar- back the clock of technology. But you cannot
ket forces readily convert this potential social ben- say the same about another controversy infused
efit into an actual one. After technology throws with make-work bias: hostility to downsizing.
people out of work, they have an incentive to What could possibly be good about downsizing?

Every time we figure out how to accomplish a apply their abilities. Imagine what would have The popular
goal using fewer workers, it enriches society, happened if the farms of the 19th century stance rests on
because labor is a valuable resource. never downsized. Greed drove these
changes, but they remained changes for the the illusion that
We have a tremendous stake in allow- better. employment, not
ing the churn to grind forward,
putting our labor resources to work Pessimistic Bias
production, is
raising living standards, to give us I first encountered anti-drug propaganda the measure of
more for less. We cant get around it: in the second grade. It was called drug educa- prosperity.
The churns promise of higher living tion, but it was mostly scary stories. I was told
standards cant be reaped without job that kids around me were using drugs, and
losses. . . . Downsizing companies will that a pusher would soon offer me some, too.
be vilified for making what appear to Teachers warned that more and more kids
be hardhearted decisions. When pas- would become addicts, and by the time I was
sions cool, however, there ought to be in junior high I would be surrounded by them.
time to recognize that, in most cases, Authority figures would occasionally specu-
the dirty work had to be done.50 late about our adulthood, and wonder how a
country could function with such a degener-
See how this issue plays out in the SAEE ate workforce. Yet another reason, they mused,
(see Figure 8). Respondents were asked to that this country is going downhill.
assess the economic harm resulting from the The junior high dystopia never material-
fact that companies are downsizing. ized. I am still waiting to be offered drugs. By
The popular stance rests on the illusion the time I reached adulthood, it was apparent
that employment, not production, is the mea- that most people were not going to their jobs
sure of prosperity. In contrast, for economists high on PCP. Generation X used its share of
and the enlightened public, downsizing illegal narcotics, but its entry into the work-
proves the rule that private greed and the force accompanied the marvels of the
public interest point in the same direction. Internet age, not a stupor-induced decline in
Downsizing superfluous workers leads them productivity and innovation.
to search for more socially productive ways to My teachers predictions about Americas

Figure 8
Companies are downsizing.



Enlightened Public

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
0=not a reason at all 1=minor reason 2=major reason

economic future turned out to be laughable. mists are more optimistic, and the enlightened
But they fit nicely into a larger pattern. As a public is most optimistic of all.
general rule, the public believes economic How can the enlightened public be more
conditions are not as good as they really are. extreme than actual economists? The answer
It sees a world going from bad to worse; the is that high-income males are actually
economy faces a long list of grim challenges, unusually pessimistic about the future of
leaving little room for hope. I refer to the prosperity. Since economists tend to be high-
publics leanings as pessimistic bias, a ten- income males, their demographics dilute
dency to overestimate the severity of economic prob- their optimism.
lems and underestimate the (recent) past, present, A staple of pessimistic rhetoric is to idealize
and future performance of the economy.51 conditions in the more distant past in order to
Suppose a congenitally pessimistic doctor put recent conditions in a negative light.
examines a patient. There are two kinds of Arthur Hermans The Idea of Decline in Western
errors to watch out for. For one thing, he History asserts that virtually every culture past
would exaggerate the severity of the patients or present has believed that men and women
symptoms. After finding a body temperature are not up to the standards of their parents
of 100 degrees, the doctor might exclaim that and forebears and asks why is this sense of
As a general rule, the patient has a dangerous fever. But the decline common to all cultures?54
the public doctor might also err in his overall judgment, Pessimistic bias is less well known than anti-
believes economic giving the patient two weeks to live. market, anti-foreign, or make-work bias.
Pessimism about the economy exhibits the Famous economists of the past frequently over-
conditions are same characteristics. You may be pessimistic looked it; teachers of economics spend relatively
not as good as about symptoms, overblowing the severity of little time rooting it out. But although the voice
everything from the deficit to affirmative action. of oral tradition is softer than usual, it is not
they really are. But you can also be pessimistic overall, seeing silent. Though he did not live to see the full
negative trends in living standards, wages, and fruits of the Industrial Revolution, Adam Smith
inequality. Public opinion is marked by pes- declared progress to be the normal course of
simism in both forms. Economists constantly events:
advise the public not to lose sleep over the latest
economic threat in the news. But they also make The uniform, constant, and uninter-
a habit of explaining how far mankind has come rupted effort of every man to better his
in the last hundred years, pointing out massive condition . . . is frequently powerful
gains we take for granted.52 enough to maintain the natural progress of
Adam Smith famously ridiculed pes- things toward improvement, in spite both of
simism with a one-liner: There is a great deal the extravagance of government, and of
of ruin in a nation.53 His point, which econ- the greatest errors of administration.
omists often echo, is that the public lacks Like the unknown principle of animal
perspective. A large economy can and usually life, it frequently restores health and
does progress despite interminable setbacks. vigour to the constitution, in spite, not
While economists debate about how much only of the disease, but of the absurd
growth to expect, public discourse is framed prescriptions of the doctor.55
in terms of stagnation versus decline.
Consider expectations about the living stan- However, progress is so gradual that a few
dard of the next generation. The SAEE asks pockets of decay hide it from the public view:
respondents: Do you expect your childrens
generation to enjoy a higher or lower standard To form a right judgment of it, indeed,
of living than your generation, or do you think we must compare the state of the coun-
it will be about the same? (see Figure 9). On try at periods somewhat distant from
average, the public expects stagnation, econo- one another. The progress is frequently

Figure 9
Do you expect your childrens generation to enjoy a higher or lower standard of living
than your generation, or do you think it will be about the same?



Enlightened Public

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
0=lower 1=about the same 2=higher

so gradual that, at near periods, the goods and services, yet remember fondly the
improvement is not only not sensible, prices they paid long ago for the cheapest ver-
but from the declension either of cer- sions of products.59 Strong forms make us
tain branches of industry, or of certain open-minded to paranoid fantasies:
districts of the country, things which
sometimes happen though the country Some part of human nature connects
in general be in great prosperity, there with the apocalyptic. Time and again,
frequently arises a suspicion that the riches the pessimists among us have envisioned
and industry of the whole are decaying.56 the world going straight to hell. Never
mind that it hasnt: A lot of us braced for
David Humeeconomist, philosopher, the worst. Whether the source is the Bible
and Adam Smiths best friendblames popu- or Nostradamus, Thomas Malthus, or
lar pessimism on our psychology, not the the Club of Rome, predictions of calami-
slow and uneven nature of progress: The ties yet to come arent easily ignored, no
humour of blaming the present, and admir- matter how many times we wake up the
ing the past, is strongly rooted in human morning after the world was supposed to
nature, and has an influence even on persons end.60
endued with the profoundest judgment and
most extensive learning.57 How can high levels of pessimism coexist
Despite those promising beginnings, 19th- with constantly rising standards of living? It is
century economists did little to develop the arguable that the gap between objective condi-
theme of pessimistic bias. Bastiat and Newcomb tions and subjective perceptions is now greater How can high
say little about it. In recent decades, however, than ever.61 The SAEE finds, for example, that levels of
economists have been making up for lost time. the public is overwhelmingly convinced that pessimism
Cox and Alm appeal to fundamental human new jobs are low-paying, while economists
psychology to explain our pessimism: The pre- and the enlightened public take a roughly bal- coexist with
sent almost always pales when measured against anced position (see Figure 10). constantly rising
the good old days.58 Mild forms of this bias In part, economists simply think that the
sustain lingering economic malcontent: numbers contradict the publics extreme pes-
standards of
Nostalgists often ignore improvements in simism.62 But the belief gap runs deeper than living?

Figure 10
Do you think most of the new jobs being created in the country today pay well, or are
they mostly low-paying jobs?



Enlightened Public

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
0=low-paying jobs 1=neither 2=pay well

Economists have the latest data set. The progress of recent cen- private stash. On some level, economists not
turies implies that it is abnormal for new jobs to only recognize that systematically biased
a love-hate be low paying. A temporary setback is possible, beliefs exist. They think they have discovered
relationship with but it merits an intellectual double-take. virulent strains in their own backyardsys-
There is an ongoing debate about the slow- tematically biased beliefs about economics.
systematic bias. down of growth. This is what relatively pes- Anti-market bias, anti-foreign bias, make-
simistic economists like Paul Krugman mean work bias, and pessimistic bias are the most
when they say that the U.S. economy is prominent specimens. Indeed, they are so
doing badly.63 Other economists counter prominent that one can hardly teach econom-
that standard numbers inadequately adjust ics without bumping into them. Students of
for the rising quality and variety of the con- economics are not a blank slate for their teach-
sumption basket and the changing composi- ers to write on. They arrive with strong preju-
tion of the workforce. The rapid growth of dices. They underestimate the benefits of mar-
the 90s raised more doubts. Either way, the kets. They underestimate the benefits of dealing
worst-case scenario GDP statistics permita with foreigners. They underestimate the bene-
lower speed of progressis no disaster. In the fits of conserving labor. They underestimate
face of popular economic pessimism, the performance of the economy and overesti-
Krugman, too, exclaims: I have seen the pre- mate its problems.
sent, and it works!64 The SAEE is hardly the only empirical evi-
dence for these propositions. There are
numerous studies of economic beliefs.65 The
Rethinking Systematic advantage of the SAEE is its craftsmanship. It
Error has been constructed to deflect the main
objections that skeptics could levy against ear-
Economists have a love-hate relationship lier empirics. Now that the SAEE has cleared
with systematic bias. As theorists, they deny its these hurdles, it is fair to look back and recog-
existence. As empiricists, they increasingly nize that the earlier literatureincluding both
import it from other fields. But when they statistical work and economists centuries of
teach, address the public, or wonder what is observation and reflectionis basically sound.
wrong with the world, they dip into their own The upshot is that economists reliance on

the miracle of aggregation is deeply misguid- ing to realize that the general population
ed. Indeed, this blind spot is particularly hard already does. The typical voter, to whose opin-
to excuse because they stand at the end of a ions politicians cater, is probably unable to
long tradition with a lot to say about bias. earn a passing grade in basic economics. No
Many of the most famous economists of the wonder protectionism, price controls, and
past, like Adam Smith and Frdric Bastiat, other foolish policies so often prevail.
obsessed over the publics wrong-headed
beliefs about economics, its stubborn resis-
tance to basic principles like opportunity cost Market Fundamentalism
and comparative advantage. Todays econo- versus the Religion of
mists have not merely failed to follow relevant
empirical work in a related discipline. They
have also turned their backs on what econo- Economists perennially debate each other
mists used to know. about how well the free market works. They
At least this is what economists have done have to step outside their profession to
as researchers. As teachers, curiously, most remember how muchunderneath it allthey
economists honor the wisdom of their fore- agree. For economists, greedy intentions
bears. Paul Samuelson famously remarked, I establish no presumption of social harm.
dont care who writes a nations lawsor Indeed, their rule of thumb is to figure out
crafts its advanced treatiesif I can write its who could get rich by solving a problemand
economics textbooks.66 This assumes, as start worrying if no one comes to mind. Most
teachers of economics usually do, that stu- noneconomists find this whole approach dis-
dents arrive with systematic errors. tasteful, even offensive. Disputes between
This peculiar disconnect between research economists are quibbles by comparison.
and teaching has an important upside. The Out of all of their contrarian views, noth-
problem is not that economists have nothing ing about economists aggravates other intel-
to say about bias. On the contrary, the prob- lectuals more than their sympathy for mar-
lem is that economists have a lot to say but kets. As Melvin Reder aptly states, compre-
are reluctant to go public, to put their scien- hension of mainstream economics tends to
tific credibility on the line. If this reluctance generate appreciation of the merits of laissez-
could be overcome, however, the oral tradi- faire even when that appreciation does not
tion of the teachers of economics offers the extend to acceptance.67 Left to their own
researchers of economics a rich mine of sci- devices, normal intellectuals could spend
entific hypotheses. their careers cataloging human greed and the
At the same time, however, the oral tradi- evils that flow from it. But economists stand
tion has been subject to so little analytical in their midst, a fifth column, using their
scrutiny that it is not hard to refine. mental gifts to defend the enemy.
Samuelsons is a story of hope; we can sleep Market fundamentalism is probably the
soundly as long as he keeps writing textbooks. most popular insult against economics these
But pondering two more facts might keep us days. The world listened when billionaire
lying awake at night. Fact one: The economics George Soros declared that market funda-
the average introductory student absorbs is mentalism . . . has rendered the global capital-
disappointingly small. If students had severe ist system unsound and unsustainable.68
biases at the beginning, most still have large Robert Kuttner has a handy summary of what
biases at the end. Fact two: below-average stu- market fundamentalism amounts to: Below-average
dents are above-average citizens. Most voters never students are
take a single course in economics. If it is dis- There is at the core of the celebration
turbing to imagine the bottom half of the of markets a relentless tautology. If we
class voting on economic policy, it is frighten- begin, by assumption, with the premise citizens.

The charge that nearly everything can be under- ous for their strict Biblical literalism, their
of market stood as a market and that markets unlimited willingness to ignore or twist the
optimize outcomes, then everything facts of geology and biology to match their
fundamentalism comes back to the same conclusion prejudices. For the analogy to be apt, the typ-
is silly, failing marketize! If, in the event, a particular ical economist would have to believe in the
market doesnt optimize, there is only superiority of markets virtually without
even as a one possible inference: it must be exception, regardless of the evidence, and dis-
caricature. insufficiently marketlike.69 senters would have to fear excommunication.
From this standpoint, the charge of mar-
He insists, moreover, that this fault is not ket fundamentalism is silly, failing even as a
limited to a right-wing fringe: Today, the caricature. If you ask the typical economist to
only difference between the utopian version name areas where markets work poorly, he
and the mainstream version is degree.70 gives you a list on the spot: Public goods, exter-
Indeed, as economics has become more fun- nalities, monopoly, imperfect information,
damentalist, the most extreme version of the mar- and so on. More importantly, almost every-
ket model has carried the greatest political, intellec- thing on the list can be traced back to other
tual, and professional weight.71 Even worse, economists. Market failure is not a concept
economists fundamentalism overflows into that has been forced upon a reluctant eco-
the policy arena: nomics profession from the outside. It is an
internal outgrowth of economists self-criti-
American liberals and European social cism. After stating that markets usually work
democrats often seem unable to offer well, economists feel an urge to think up
more than a milder version of the con- counterexamples. Far from facing excommu-
servative programderegulation, pri- nication for sin against the sanctity of the
vatization, globalization, fiscal disci- market, discoverers of novel market failures
pline, but at a less zealous extreme. Few reap professional rewards. Flip through the
have been willing to challenge the premise leading journals. A high fraction of their arti-
that nearly everything should revert to a cles present theoretical or empirical evidence
market.72 of market failure.
True market fundamentalists in the eco-
Joseph Stiglitz joins the chorus against nomics profession are few and far between.
market fundamentalism, happily discarding Not only are they absent from the center of
the guarded professorial prose of his Nobel the profession; they are rare at the right-
prize-winning research: wing extreme. Milton Friedman, a legendary
libertarian, made numerous exceptions, on
The discontent with globalization arises everything from money to welfare to
not just from economics seeming to be antitrust:
pushed over everything else, but because
a particular view of economicsmarket Our principles offer no hard and fast
fundamentalismis pushed over all line how far it is appropriate to use gov-
other views. Opposition to globalization ernment to accomplish jointly what is
in many parts of the world is not to glob- difficult or impossible for us to accom-
alization per se . . . but to the particular plish separately through strictly volun-
set of doctrines, the Washington tary exchange. In any particular case of
Consensus policies that the internation- proposed intervention, we must make
al financial instituions have imposed.73 up a balance sheet, listing separately the
advantages and disadvantages.74
Market fundamentalism is a harsh accu-
sation. Christian fundamentalists are notori- When Friedman preferred laissez-faire, he

often openly acknowledged its defects. He had is really a religion.77 Creationists attacks on
no quasi-religious need to defend the impec- the objectivity of mainstream evolutionists
cability of the free market. For example, his seem to stem from their sense of scientific
discussion of natural monopoly stated: inferiority to their opponents.
Similarly, the most vocal opponents of
There are only three alternatives that market fundamentalism are themselves
seem available: private monopoly, pub- often believers in what can accurately be
lic monopoly, or public regulation. All called democratic fundamentalism. Its
three are bad so we must choose purest expression is the cliche, attributed to
among evils. . . . I reluctantly conclude failed 1928 presidential candidate Al Smith,
that, if tolerable, private monopoly that all the ills of democracy can be cured by
may be the least of the evils.75 more democracy.78 In other words, no matter
what happens, the case for democracy remains
Friedman was far more market-friendly untouched.
than the average economist. But a market A person who said All the ills of markets
fundamentalist? Hardly. He recognized can be cured by more markets would be lam-
numerous cases where market performance pooned as the worst sort of market funda-
is poor, and he did not excommunicate less mentalist. Why the double standard? Because
The most vocal
pro-market colleagues for heresy. unlike market fundamentalism, democratic opponents
Popular accusations of market funda- fundamentalism is widespread. In polite com- of market
mentalism are plain wrong. Yes, economists pany, you can make fun of the worshippers of
think that the market works better than Zeus, but not Christians or Jews. Similarly, it is fundamentalism
other people do. But they acknowledge socially acceptable to make fun of market fun- are themselves
exceptions to the rule. The range of these damentalism, but not democratic fundamen-
exceptions changes as new evidence comes in. talism, because market fundamentalists are
often believers
And it is usually economists themselves who scarce, and democratic fundamentalists are all in what can
discover the exceptions in the first place. around us. accurately be
In the end, apologists for democracy often
fall back on Winston Churchills slogan that called democratic
Democratic democracy is the worst form of government, fundamentalism.
Fundamentalism except all those other forms that have been
tried from time to time.79 On the surface,
The disparity between economists open- this sounds like mature realism, not democ-
mindedness and the charge of market funda- ratic fundamentalism. But Churchills
mentalism is so vast that it is hard not to maxim is an all-or-nothing rhetorical trick.
speculate about the motives behind it. I sense Imagine if an economist dismissed com-
a strong element of projection: accusing oth- plaints about the free market by snapping:
ers of the cognitive misdeeds one commits The free market is the worst form of eco-
oneself. Take, for example, creation scien- nomic organization, except all the others.
tists. Faculty and researchers of the Institute This is a fine objection to communism, but
for Creation Research follow a party line: only a market fundamentalist would buy it
The scriptures, both Old and New as an argument against moderate govern-
Testaments, are inerrant in relation to any ment intervention. Churchills slogan is every
subject with which they deal, and are to be bit as weak. Just because dictatorship is dis-
accepted in their normal and intended astrous, it hardly follows that democracy
sense.76 You can hardly get less scientific. Yet must have free rein. Like markets, democracy
a standard debating tactic of creation scien- can be limited, regulated, or overruled.
tists is to insist that evolutionary theory, Contramajoritarian procedures like judicial
along with its bedfellow, secular humanism, review can operate alongside democratic

ones. Supermajority rules allow minorities to and deregulation, these policies take deci-
thwart the will of the majority. Twisting a sions out of the hands of majorities and into
marginal tradeoff into a binary choice is fun- the hands of business owners. But the critics
damentalism trying to sound reasonable. rarely wonder if this transfer might be desir-
able. They treat less reliance on democracy as
automatically objectionable.
Private Choice as an That is another symptom of democratic
Alternative to Democracy fundamentalism. If all that an economist
had to say against a government program
and Dictatorship were, Thats government intervention.
Undemocratic politics is not the only Government is supplanting markets! he
alternative to democratic politics. Many areas would be pigeonholed, then marginalized, as
of life stand outside the realm of politics, of a market fundamentalist. But when an equal-
collective choice. When the law is silent, ly simplistic cry goes up in the name of
decisions are up to the individual or left to democracy, there is a sympathetic audience.
the market. If the term were not preempted, It is logically possible that clear-eyed business
private choice could be called the Third greed makes better decisions than confused
Way, the alternative to both democracy and voter altruism. Why not at least compare
dictatorship. their performance, instead of prejudging?
For most of human history, religion was a The complaint that we are losing democ-
state responsibility. The idea that govern- racy is especially weak when we bear in mind
ment could have no established religion was that this is not a binary choice between
inconceivable. All that has changed; now unlimited democracy and pure laissez-faire.
individuals decide which religion, if any, to Just because some democracy is beneficial or
practice. Verbal gymnastics notwithstanding, necessary, it scarcely follows that we should
this depoliticization is undemocratic. The not have less. Consider deregulation of the
majority now has as little say about my reli- television and radio spectrum. Democratic
gion as it would under a dictatorship; in both fundamentalists find the idea offensive
cases, the law ignores public opinion. Before because it ends democratic oversight.82 But it
the 1930s, similarly, many areas of U.S. eco- is hard to see the value of democracy in the
nomic life were undemocratically shielded entertainment industry. Premium networks
from federal and state regulation.80 The mar- like HBO demonstrate that the profit
ket periodically trumped democracy, on motive, uninhibited by majority preferences,
The complaint everything from the minimum wage to the is a recipe for high-quality, creative program-
that we National Recovery Administration. And ming. Democratic fundamentalism holds
unless you are a democratic fundamentalist, back the rest of the industry.
are losing you have to be open to the possibility that While my analysis here has debunked the
democracy is this was all for the good. main efforts to undermine the objectivity of
especially weak Fervent partisans of democracy often the economics profession, it adds little to the
grant that democracy and the market are debate on the virtues of markets. Rather, I
when we bear substitutes. As Kuttner puts it, The democ- have tried to put weight on the other side of
in mind that ratic state remains the prime counterweight the scale. The optimal mix between markets
this is not a to the market.81 Their complaint is that the and government depends not on the
public has less and less say over its destiny absolute virtues of markets, but on their
choice between because corporations have more and more virtues compared to those of government. No
unlimited say over theirs. To save democracy, the peo- matter how well you think markets work, it
ple must reassert its authority. makes sense to rely on markets more when
democracy and Fair enough. Though their opponents you grow more pessimistic about democracy.
pure laissez-faire. greatly overstate the extent of privatization If you use two car mechanics and discover

that mechanic A drinks on the job, the nat- 1988); Gary S. Becker, A Theory of Competition
among Pressure Groups for Political Influence,
ural response is to shift some of your busi- Quarterly Journal of Economics 98, no. 3 (1983):
ness over to mechanic B, whatever your pre- 371400; and Geoffrey Brennan and James M.
existing complaints about B. Buchanan, The Power to Tax: Analytical Foundations
The striking implication is that even econ- of a Fiscal Constitution (Cambridge, MA: Cambridge
University Press, 1980).
omists, widely charged with market funda-
mentalism, should be more pro-market than 3. See, e.g., Ilya Somin, Voter Ignorance and the
they already are. What economists currently Democratic Ideal, Critical Review 12, no. 4 (1998):
see as the optimal balance between markets 99111; Stephen P. Magee, William A. Brock, and
Leslie Young, Black Hole Tariffs and Endogenous
and government rests upon an overestimate of Policy Theory: Political Economy in General
the virtues of democracy. In many cases, econo- Equilibrium (Cambridge, MA: Cambridge Univer-
mists should embrace the free market in spite sity Press, 1989); Barry R. Weingast, Kenneth A.
of its defects, because it still outshines the Shepsle, and Christopher Johnsen, The Political
Economy of Benefits and Costs: A Neoclassical
democratic alternative. Approach to Distributive Politics, Journal of
Even among economists, market-oriented Political Economy 89, no. 4 (1981): 64264; and
policy prescriptions are often seen as too dog- Anthony Downs, An Economic Theory of Democracy
matic, too unwilling to take the flaws of the (NY: Harper and Row, 1957).
free market into account. Many prefer a more 4. Quoted in Lewis D. Eigen and Jonathan P.
sophisticated position: Since we have Siegel, eds., The Macmillan Dictionary of Political
already belabored the advantages of markets, Quotations (New York: Macmillan, 1993), p. 109.
let us not forget to emphasize the benefits of
5. For an excellent survey, see Michael X. Delli
government intervention. I claim that the Carpini and Scott Keeter, What Americans Know
qualification needs qualification: Before we about Politics and Why It Matters (New Haven, CT:
emphasize the benefits of government inter- Yale University Press, 1996).
vention, let us distinguish intervention
6. See, e.g., Donald Wittman, The Myth of Demo-
designed by a well-intentioned economist cratic Failure: Why Political Institutions Are Efficient
from intervention that appeals to nonecono- (Chicago: University of Chicago Press, 1995); and
mists, and reflect that the latter predominate. Benjamin I. Page and Robert Y. Shapiro, The
You do not have to be dogmatic to take a Rational Public: Fifty Years of Trends in Americans
staunchly pro-market position. You just have Policy Preferences (Chicago: University of Chicago
Press, 1992).
to notice that the sophisticated emphasis
on the benefits of intervention mistakes theo- 7. See, e.g., James Surowiecki, The Wisdom of Crowds:
retical possibility for empirical likelihood. Why the Many Are Smarter Than the Few and How
Collective Wisdom Shapes Business, Economies, Societies
and Nations (New York: Doubleday, 2004); David
Austen-Smith and Jeffrey S. Banks, Information
Notes Aggregation, Rationality, and the Condorcet Jury
Theorem, American Political Science Review 90, no.
1. See, for example, Milton Friedman, Capitalism and
1 (1996): 3445; and Benjamin I. Page and Robert
Freedom (Chicago: University of Chicago Press,
Y. Shapiro, The Rational Public: Fifty Years of Trends
2002); Paul Krugman, The Accidental Theorist and
in Americans Policy Preferences (Chicago: University
Other Dispatches from the Dismal Science (New York:
of Chicago Press, 1992).
Norton, 1998); Mancur Olson Jr., Big Bills Left on
the Sidewalk: Why Some Nations Are Rich and
8. Philip Converse, Popular Representation and
Others Are Poor, Journal of Economic Perspectives 10,
the Distribution of Information, in Information
no. 2 (1996): 324; and Alan S. Blinder, Hard Heads,
and Democratic Processes, ed. John Ferejohn and
Soft Hearts: Tough-Minded Economics for a Just Society
James H. Kuklinski (Champaign, IL: University of
(Reading, MA: Addison-Wesley, 1996).
Illinois Press, 1990), p. 383.
2. See, e.g., Gene M. Grossman and Elhanan Help-
9. Surowiecki.
man, Special Interest Politics (Cambridge: MIT Press,
2001); Charles K. Rowley, Robert D. Tollison, and 10. Page and Shapiro, p. 41.
Gordon Tullock, eds., The Political Economy of Rent-
Seeking (Boston: Kluwer Academic Publishers,

11. See, e.g., Allan Drazen, Political Economy in 21. See Robert J. Blendon et al., Bridging the Gap
Macroeconomics (Princeton, NJ: Princeton Univer- between the Publics and Economists Views of
sity Press, 2000); and Torsten Persson and Guido the Economy, Journal of Economic Perspectives 11,
Tabellini, Political Economics: Explaining Economic no. 3 (1997): 10518; and Washington Post/ Kaiser
Policy (Cambridge, MA: MIT Press, 2000). Family Foundation/Harvard University, Survey
of Americans and Economists on the Economy
12. George J. Stigler, Economics or Ethics? in #1199, October 16, 1996, http://www2.
The Essence of Stigler, ed. Kurt R. Leube and content/archive/1199/econgen.html.
Thomas Gale Moore (Stanford, CA: Hoover
Institution Press, 1986), p. 309. 22. To estimate the beliefs of the enlightened public,
I first regressed economic beliefs on respondents
13. For important exceptions, see Scott L. Althaus, characteristics, including income, job security,
Collective Preferences in Democratic Politics: Opinion income growth, sex, race, party identification, ideolo-
Surveys and the Will of the People (New York: gy, education, and econ (a dummy variable equal to
Cambridge University Press, 2003); Larry M. 1 if the respondent is an economist, and 0 otherwise).
Bartels, Uninformed Votes: Information Effects in Then, for each equation, I calculated the predicted
Presidential Elections, American Journal of Political belief assuming a respondent had the general pub-
Science 40, no. 1 (1996): 194230; Justin Wolfers, lics average income, job security, income growth, sex,
Are Voters Rational? Evidence from Gubernator- race, party identification, and ideology, combined
ial Elections, Stanford University Graduate with a PhD in economics. For more details, see Bryan
School of Business Working Paper no. 1730 (2002); Caplan, The Myth of the Rational Voter: Why Democracies
and Carpini and Keeter. Choose Bad Policies (Princeton, NJ: Princeton
University Press, 2007), pp. 8493.
14. Matthew Rabin, Psychology and Econom-
ics, Journal of Economic Literature 36, no. 1(1998): 23. Bryan Caplan, Systematically Biased Beliefs
1146; Richard M. Thaler, The Winners Curse: about Economics: Robust Evidence of Judgmental
Paradoxes and Anomalies of Economic Life (Princeton, Anomalies from the Survey of Americans and
NJ: Princeton University Press, 1992); Daniel Economists on the Economy, Economic Journal 112,
Kahneman, Paul Slovic, and Amos Tversky, eds., no. 479 (2002): 43358.
Judgment Under Uncertainty: Heuristics and Biases
(Cambridge: Cambridge University Press, 1982); 24. Bryan Caplan, What Makes People Think
and Richard Nisbett and Lee Ross, Human Like Economists? Evidence on Economic Cogni-
Inference: Strategies and Shortcomings of Social Judgment tion from the Survey of Americans and Econom-
(Englewood Cliffs, NJ: Prentice-Hall, 1980). ists on the Economy, Journal of Law and Economics
44, no. 2 (2001): 417.
15. This does not imply that their beliefs about
other topics are any sounder. In fact, I hope that 25. See Delli Carpini and Keeter.
experts in other fields will use my framework to
explain how biased beliefs about their area of spe- 26. Nancy Kraus, Torbjrn Malmfors, and Paul
cialty distort policy. Slovic, Intuitive Toxicology: Expert and Lay
Judgments of Chemical Risks, Risk Analysis 12,
16. For simplicity, assume symmetric voter prefer- no. 2 (1992): 21532.
ences so that the median preference is also the
most efficient outcome. Robert D. Cooter, The 27. See, e.g., Thomas Sowell, Applied Economics:
Strategic Constitution (Princeton, NJ: Princeton Thinking Beyond Stage One (New York: Basic Books,
University Press, 2000), pp. 3235. 2004); John Mueller, Capitalism, Democracy, and
Ralphs Pretty Good Grocery (Princeton, NJ: Princeton
17. See, e.g., Olaf Gersemann, Cowboy Capitalism: University Press, 1999); Daniel Klein, ed., What Do
European Myths, American Reality (Washington: Economists Contribute? (New York: NYU Press, 1999);
Cato Institute, 2004). Andrei Shleifer, State versus Private Ownership,
Journal of Economic Perspectives 12, no. 4 (1998):
18. Quoted in Robert Andrews, ed., The Columbia 13350; Ludwig von Mises, Interventionism: An
Dictionary of Quotations (New York: Columbia Economic Analysis (Irvington-on-Hudson, NY:
University Press, 1993), p. 262. Foundation for Economic Education, 1998); Jeffrey
D. Sachs and Andrew Warner, Economic Reform
19. Steven Kelman, What Price Incentives? Econom- and the Process of Global Integration, Brookings
ists and the Environment (Boston: Auburn House, Papers on Economic Activity 1995, no. 1 (1995): 1118;
1981), p. 7. Blinder; Steven Rhoads, The Economists View of the
World: Government, Markets, and Public Policy
20. Ibid. (Cambridge, MA: Cambridge University Press,
1985); and Charles Schultze, The Public Use of Private

Interest (Washington: Brookings Institution, 1977). C. Haltiwanger, and Scott Schuh, Job Creation and
Destruction (Cambridge: MIT Press, 1996); David
28. Joseph A. Schumpeter, Capitalism, Socialism, Henderson, Innocence and Design: The Influence of
and Democracy (New York: Harper and Brothers Economic Ideas on Policy (NY: Basil Blackwell Inc.,
Publishers, 1950), p. 144. 1986); Frdric Bastiat, Economic Sophisms
(Irvington-on-Hudson, NY: Foundation for
29. Joseph A. Schumpeter, History of Economic Economic Education, 1964); and Frdric Bastiat,
Analysis (New York: Oxford University Press, Selected Essays on Political Economy (Irvington-on-
1954), p. 234. Hudson, NY: Foundation for Economic Education,
30 Schultze, p. 18.
45. Blinder, p. 17.
31. Ibid., p. 47.
46. Bastiat, Economic Sophisms, p. 20.
32. Adam Smith, An Inquiry into the Nature and
Causes of the Wealth of Nations (Indianapolis: 47. Ibid.
LibertyClassics, 1981), p. 454.
48. Cox and Alm, p. 116.
33. Ibid., p. 456.
49. Ibid., p. 128.
34. Washington Post/Kaiser Family Foundation/Har-
vard Univerity, p. 4; and William B. Walstad and Max 50. Ibid., p. 133.
Larsen, A National Survey of American Economic Literacy
(Lincoln, NE: The Gallup Organization, 1992), p. 48. 51. See, e.g., Gregg Easterbrook, The Progress
Paradox: How Life Gets Better While People Feel
35. Mueller, p. 5. Worse (NY: Random House, 2003); Bjrn Lomborg,
The Skeptical Environmentalist: Measuring the Real State
36. See, e.g., William Poole, Free Trade: Why Are of the World (Cambridge, MA: Cambridge University
Economists and Noneconomists So Far Apart? Press, 2003); Cox and Alm; Mueller; David
Federal Reserve Bank of St. Louis Review 6, no. 5 Whitman, The Optimism Gap: The Im OKTheyre Not
(2004): 16; Jagdish Bhagwati, Free Trade Today Syndrome and the Myth of the American Decline (New
(Princeton, NJ: Princeton University Press, 2002); York: Walker and Company, 1998); and Julian L.
Paul Krugman, Pop Internationalism (Cambridge, Simon, The Ultimate Resource 2 (Princeton, NJ:
MA: MIT Press, 1996); and Douglas A. Irwin, Princeton University Press, 1996).
Against the Tide: An Intellectual History of Free Trade
(Princeton, NJ: Princeton University Press, 1996). 52. See, e.g., D. Gale Johnson, Population, Food,
and Knowledge, American Economic Review 90, no. 2
37. Simon Newcomb, The Problem of Economic (2000): 114; Robert W. Fogel, Catching Up with
Education, Quarterly Journal of Economics 7, no. 4 the Economy, American Economic Review 89, no. 1
(1893): 379. (1999): 121; and Robert E. Lucas Jr., Making a
Miracle, Econometrica 61, no. 2 (1993): 25172.
38. Blinder, p. 111.
53. John Rae, Life of Adam Smith (New York:
39. Steven F. Landsburg, The Armchair Economist: Augustus M. Kelley, 1965), p. 343.
Economics and Everyday Life (New York: Free Press,
1993), p. 197. 54. Arthur Herman, The Idea of Decline in Western
History (New York: Free Press, 1997), p. 13.
40. See Bhagwati; and Irwin.
55. Smith, p. 343; emphasis added.
41. Smith, p. 429.
56. Ibid., pp. 34344; emphasis added.
42. William J. Clinton Foundation, Facts Sheet
on NAFTA Notes, October 12, 1993, http:// 57. David Hume, Essays: Moral, Political and Literary (Indianapolis: Liberty Fund, 1987), p. 464.
58. Cox and Alm, p. 200.
43. Krugman, Pop Internationalism, p. 84.
59. Ibid., p. 44.
44. See, e.g., W. Michael Cox and Richard Alm,
Myths of Rich and Poor: Why Were Better Off Than We 60. Ibid., p. 197.
Think (New York: Basic Books, 1999); Paul
Krugman, The Accidental Theorist; Steven Davis, John 61. Pew Research Center, The Optimism Gap

Grows, January 17, 1997, 67. Melvin W. Reder, Economics: The Culture of a
reports/display.php3?ReportID=115. Controversial Science (Chicago: University of
Chicago Press, 199), p. 236.
62. See e.g., Cox and Alm, pp. 13956.
68. George Soros, The Crisis of Global Capitalism:
63. Krugman, Pop Internationalism, p. 48. Open Society Endangered (New York: Public Affairs,
1998), p. 20.
64. Ibid., p. 214.
69. Robert Kuttner, Everything for Sale: The Virtues
65. Leading empirical studies of the economic and Limits of Markets (New York: Alfred A. Knopf,
beliefs of economics and the general public include 1997), p. 6.
Alan S. Blinder and Alan B. Krueger, What Does the
Public Know about Economic Policy, and How Does 70. Ibid., p.6.
It Know It? Brookings Papers on Economic Activity 1
(2004): 32787; The Chicago Council on Foreign 71. Ibid., p. 9; emphasis added.
Relations, Global Views 2004, September, 2004, 72. Ibid., p. 7; emphasis added.
_Views_2004_ US. pdf; Dan Fuller and Doris Geide-
Stevenson, Consensus among Economists: 73. Joseph E. Stiglitz, Globalization and Its Discon-
Revisited, Journal of Economic Education 34, no. 4 tents (New York: Norton, 2002), p. 221.
(2003): 36987; William B. Walstad and Ken Rebeck,
Assessing the Economic Knowledge and Eco- 74. Friedman, p. 32.
nomic Opinions of Adults, Quarterly Review of
Economics and Finance 42, no. 5 (2002): 92134; 75. Ibid., p. 26.
Kenneth F. Scheve and Matthew J. Slaughter,
Globalization and the Perceptions of American Workers 76. Michael Shermer, Why People Believe Weird
(Washington: Institute for International Eco- Things: Pseudoscience, Superstition, and Other Con-
nomics, 2001); Victor F. Fuchs, Alan Krueger, and fusions of Our Time (New York: Holt, 2002), p. 142.
James Poterba, Economists Views about Para-
meters, Values, and Policies: Survey Results in Labor 77. Ibid., p. 143.
and Public Economics, Journal of Economic Literature
36, no. 3 (1998): 1387425; Walstad and Larsen; 78. Eigen and Siegel, p. 115.
Richard M. Alston, J. R. Kearl, and Michael B.
Vaughan, Is There a Consensus among Economists 79. Ibid., p. 109.
in the 1990s? American Economic Review 82, no. 2
(1992): 203209; Herbert McClosky and John Zaller, 80. Howard Gillman, The Constitution Besieged: The
The American Ethos: Public Attitudes Towards Capitalism Rise and Demise of Lochner Era Police Powers
and Democracy (Cambridge, MA: Harvard University Jurisprudence (Durham, NC: Duke University
Press, 1984); and J. R. Kearl et al., A Confusion of Press, 1993).
Economists? American Economic Review 69, no. 2
(1979): 2837. 81. Kuttner, p. 7.

66. Quoted in Mark Skousen, The Perseverance 82. Robert W. McChesney, Rich Media, Poor
of Paul Samuelsons Economics, Journal of Democracy: Communication Politics in Dubious Times
Economic Perspectives 11, no. 2 (1997): 150. (Urbana, IL: University of Illinois Press, 1999).


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