Friday, September 28, 2007

The Four Boneheaded Biases of Stupid Voters (And We're All Stupid Voters)

Reason magazine is fast becoming one of my favorite news/opinion sources. They have a nice RSS feed and excellent articles.

I was especially taken by this article on the biases we all have about voting, and hopefully this explains how we end up with free-spending, policy-deficient politicians like George W. Bush.

Anti-Market Bias

I first learned about farm price supports in the produce section of the grocery store. I was in kindergarten. My mother explained that price supports seemed to make fruits and vegetables more expensive but assured me that this conclusion was simplistic. If the supports went away, so many farms would go out of business that prices would soon be higher than ever. I accepted what she told me and felt a lingering sense that price competition is bad for buyer and seller alike.

This was one of my first memorable encounters with anti-market bias, a tendency to underestimate the economic benefits of the market mechanism. The public has severe doubts about how much it can count on profit-seeking business to produce socially beneficial outcomes. People focus on the motives of business and neglect the discipline imposed by competition. While economists admit that profit maximization plus market imperfections can yield bad results, noneconomists tend to view successful greed as socially harmful per se.

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