The Truthiness Hurts

Abstract

This essay summarizes and applies some of the key insights in Bryan Caplan's The Myth of the Rational Voter. We discuss the relevance of cheap signals in increasingly-complex political systems as well as the relevance of ideas in public policy with "rationally irrational" voters. We also add a fifth bias, "stick-it-to-the-man bias," to Caplan's proposed anti-market, anti-foreign, make-work, and pessimistic biases. We apply these biases to current debates in environmental policy. Combined, these biases give us cause to be skeptical of attempts to correct market failures through the political system.

Keywords: Rational Irrationality, Environmental Economics, Public Choice

JEL Classification: A1, H8, Q5