In The Myth of the Rational Voter, Bryan Caplan argues that,  “To see if the average voter's beliefs about the econom[y] . . . are right . . . you can ask the general public and professional economists, and see if, on average, they agree. . . . [E]xperts have been wrong before. But it is hard to get around the strong presumption that if experts and laymen disagree, the experts are probably right, and the laymen are probably wrong.”

Although this thesis sounds sensible, it contains an overlooked assumption, viz. that professional economists and average voters are talking about the same thing when they speak about the economy. There is good reason to believe that this assumption is false.

The modern social science of economics began in the 15^th Century, and it was propelled by the economic advisors of European monarchs who sought to enrich their national treasuries. These advisors had little concern for the welfare of common people. Mercantilism, which was the economic theory advocated by them, held the simplistic view that to enrich the state, precious metals should be imported and commodities exported (which would be paid for in precious metals). The effect of this theory was, of course, to impoverish the people.

Adam Smith, in his seminal work that became the foundation of Western free-market economics, was highly critical of mercantilism, but his objective was the same as that of the Mercantilists. The title of his treatise is, after all, The Wealth of NATIONS.  And Western trained economists have never abandoned this objective.

The average voter, on the other hand, not only is not concerned with the nation’s wealth, he is concerned with his own, and he instinctively understands that what is true of the whole is not necessarily true of the part. He sees the economy in terms of the amount in his pay envelope and what he can buy with it. In this sense, the average voter thinks of the economy as the Ancient Greek did, as household economy. So it is perfectly reasonable that the average voter and the professional economist should disagree about the economy’s condition.

The professional economist measures the economy in rather artificial terms—values in the stock market, corporate profits, the artificial unemployment rate, gross national and domestic products, but never per capita income. And that’s the only measure relevant to the average voter, beyond his own income.

Mr. Caplan spends some time trying to devise a way of “educating” the average voter so that his beliefs about the economy more closely match those of professional economists. He would do better devising ways to educate professional economists about the real economic concerns of people and forget about the macro-economy.

©2006 John Kozy, Jr.