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Markets and Their Importance to the Electorate
Markets and Their Importance to the Electorate
Oct 1, 2024 5:18 AM

I have argued for many years now that free markets are intrinsically good. I have tried to engage this issue with Christians but many are either not interested or do not see any importance in the pursuit. I know markets can e bad masters when people lack virtue. I also know that the alternatives to free markets have littered the twentieth century with more death than any single cause in human history. (Think socialism, fascism and Marxism.) And representative democracy, a republic of just laws, is not perfect either but it sure beats the alternatives. Shared power is always better than control by the one or the few. Social engineering and economic planning by an elite and powerful few strips us of both human dignity and true freedom.

Bryan Caplan, an economics professor at George Mason University, is the author of a new book, The Myth of the Rational Voter: Why Democracies Choose Bad Politics, that has a significant bearing on how we should think about the political side of economic concerns in America. Professor Caplan concludes, in words that are not at forting to me personally, that most Americans cast their votes on the basis of irrational biases about economics. This, he reasons, is why candidates who oppose free markets, free trade, profits and immigration win. Sadly, I am quite sure that he is right about this point.

Creators Syndicate writer John Stossel, in reviewing the professor’s new book, says: "People tend to acquire wrong opinions about economic policy packaged in worldviews they inherited while growing up." Since people resist, and often strongly, having their own worldview challenged or changed they will vote for those candidates who make them feel good. Stossel concludes that this means "They will vote irrationally." I have long sensed that this was true on an intuitive level but the professor’s argument tends to fortify what I had only sensed but not quite had a handle on how to argue my case well. Simply put, most voters see pelling reason to vote otherwise since their choices in elections bear no direct consequence on their lives, at least as they understand their lives. Gloomily Stossel concludes, "When irrationality is free, people will indulge their biases."

Caplan creates four categories in his book which show how this irrationality demonstrates itself. First, he writes about an anti-market bias. Second, he says there is an anti-foreign bias. (This is far more prevalent than most of the debates on the right and left realize, especially in our present heated context.) Third, Caplan says there is a make-work bias. And, fourth he says there is a pessimistic bias. (This one surprised me a good deal but he makes sense here too.)

In the first category, the anti-market bias, Professor Caplan underscores what we call the zero-sum game argument. He shows how it captures mon ideas about how markets really work. The truth is that es from expansion and cost-cutting. The idea that there is just so much money and that I need my share of it is mon that most people do not even know they actually believe it. They do not realize that larger pies can be made thus making more slices and more benefits for a wider number of people.

The second category, the anti-foreign bias, leads to a great distrust of all things non-American. The "them" here is anyone outside of America. Even though our prosperity is now directly connected to the global economy, and everyone can prosper in this economy, we keep thinking that all these foreigners want is our money, thus our piece of the one small finite pie. As Stossel correctly notes what they really want is to sell us their goods, goods that are useful to our lives.

The third category Caplan uses is widely misunderstood as well, perhaps even more than the first two. In this bias we believe a myth which says that what makes us stronger is jobs, not goods and services. Thus, anything that takes American jobs overseas will result in ultimate harm to many Americans, if not to all. Stossel humorously concludes, "If this were true, we could prosper by outlawing all inventions created after 1920. Think of all the jobs that would create." Indeed.

The fourth bias Caplan refers to as “the pessimistic bias.” This bias believes that any economic problem provides proof that there is a general decline in the economy. Any bad news plete bad news! This one is widely at work right now. Even though our economy is growing some people are not profiting from that growth so the growth is not real growth at all and it only benefits the rich. (Robin Hood theology is alive and well!) Question: Are we richer or poorer than our grandparents? You know the answer. But this "pessimistic bias" leads to public support for things like price-controls, foreign-trade barriers and efforts to stop outsourcing. And this is where the anti-immigration fear also shows bined with some other American fears about race and ethnicity. You can argue, and you can even argue well, that immigration will help the economy and thus, in the long run, it will help all of us but people will not believe you no matter what evidence you provide for them. (There is a load of good evidence that this conclusion is really true!)

Remember the NAFTA debate and Ross Perot’s popularity. When President Clinton promoted and signed NAFTA many unions and workers felt betrayed by their president. Why? NAFTA, they believed, was a “great sucking sound” (Ross Perot’s words) which they heard taking jobs out of America. This is why protectionism is alive and well in the general electorate, even though it does not deliver what it promises at all.

Stossel concludes that Caplan’s research will not cheer up those who favor the free market and fewer democratic attempts by the general public to control the market. Caplan suggests that only the economically literate should vote. Fat chance that will happen any time soon. (Caplan also includes some other solutions that are even less likely to happen.) The one practical strategy that he offers is one that I believe we can pursue in every way possible. He says everyone who understands these economic issues should take every opportunity that they can to teach these principles to others. This is what motivates me to write and teach as I do.

John Stossel, from whose syndicated column I have drawn the essential facts for this brief review of Caplan’s book, notes that until about age 40 he had no real idea about economics either. It was then that “he started to believe [he] had acquired a good sense of what domestic policies might serve people well.” He notes further, “I only started to think I knew what ought to be done after years of reporting and reading voraciously to absorb my arguments from left and right.” I had the same experience. I took the view that economics was dreary theory and thus no one could really figure this stuff out anyway. That was wrong, very wrong.

So why should I, especially as a Christian theologian, care about economics so passionately? Many of the voices that I heard over the first forty-plus years of my life were from Christians who proved to me that they understood even less about economics than I did. When I read Jim Wallis, Tony Campolo and Ron Sider, to name just three prominent evangelical voices in this area, I heard their passion for the poor, their cry for justice, and their deep willingness to sacrifice and do something good for people who truly needed help. This was enough for me until I began to ask about their ideas more deeply. Justice is clearly a huge biblical theme and these men wanted to restore justice issues to the Church, which is correct. And these guys had to be more right than those mean, hard-hearted, right-wing, big-business sorts who wanted to oppress the poor and exploit the ordinary citizen for their own personal increase.

Then a journey began for me. I actually started reading important books on economics, like F. A. Hayek’s classic, The Road to Serfdom. I have especially profited from the work of the late Milton Friedman. I also found a profound ongoing resource that has provided me with the intellectual and theological ammunition and connectivity that I was looking for: The Acton Institute.

This is why I continue to inform younger Christian thinkers about economic issues. I share their passion for justice and the poor. I believe their energy is needed in this battle. What I seriously disagree with is their agenda for how to plish this pursuit. When they follow the vision of Sojourners and thinkers like Jim Wallis they will be led seriously astray. Just remember, Jim Wallis has a worldview too and he has an agenda just like the rest of us. Study that agenda carefully and then study economics even more seriously. Until you have done this serious work in economic thinking Jim Wallis will appear brilliant and consistently Christian in most of his arguments. I believe you will soon discover the opposite to be the case if you dig into these issues that I have mentioned. With Bryan Caplan I hope more of those who understand these sorts of issues will teach, with all humility and grace, those who do not. We have a lot of worldview work to do in the days ahead.

John H. Armstrong is founder and director of ACT 3, a ministry aimed at "encouraging the church, through its leadership, to pursue doctrinal and ethical reformation and to foster spiritual awakening." His home blog is located here.

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