Almost all the “respectable” economic theories of politics begin by assuming that the typical citizen understands economics and votes accordingly — at least on average. By a “miracle of aggregation,” random errors are supposed to balance themselves out. But this works only if voters’ errors are random, not systematic.
The evidence — most notably, the results of the 1996 Survey of Americans and Economists on the Economy — shows that the general public’s views on economics not only are different from those of professional economists but are less accurate, and in predictable ways. The public really does generally hold, for starters, that prices are not governed by supply and demand, that protectionism helps the economy, that saving labor is a bad idea, and that living standards are falling. Economics journals regularly reject theoretical papers that explicitly recognize these biases. In a well-known piece in the Journal of Political Economy in 1995, the economists Stephen Coate and Stephen Morris worry that some of their colleagues are smuggling in the “unreasonable assumptions” that voters “have biased beliefs about the effects of policies” and “could be persistently fooled.” That’s the economist’s standard view of systematic voter bias: that it doesn’t exist.