Don Boudreaux with a great review of Bryan Caplan's "Myth of the Rational Voter"

If by "govern themselves" is meant that people conduct themselves sensibly in their private affairs, the answer is "yes, typically." But if by "govern themselves" is meant that people generally vote sensibly, the answer is "no, typically."

This startling conclusion will upset many people. But bear with me. It's a chief conclusion drawn by my George Mason University colleague Bryan Caplan in his pioneering book "The Myth of the Rational Voter."

Bryan's conclusion rests on the insight that acting rationally is costly. This means, in part, that it take time and effort to gather and process information. To understand the likely consequences of buying a Honda rather than a Lexus requires that you know something about both cars and that you think clearly about the costs and benefits you'll bear as a result of choosing one of these cars over the other (or of choosing not to buy a car at all).

You have strong incentives to spend sufficient time and effort comparing different cars because you will directly bear the costs and enjoy the benefits of your choice. If you choose carelessly, you likely wind up with a car that you dislike or one that you can't afford.

You have incentives to choose wisely also because you are the exclusive chooser. You alone make the choice. If you choose the Honda, you get the Honda. No one else is required to join you in choosing to buy this car. You don't need the approval of your neighbors or your fellow church members.

If you did need the approval of others, you'd have less incentive to take the effort necessary to make a sensible decision. The greater the number of people who vote along with you on which car you'll buy, the lower are the chances that your vote will decide which car you buy. (Your vote will be just one among many.)

Each of us has muted incentives to study the facts and issues carefully -- and to reflect upon them dispassionately -- because no one of us is responsible for deciding which policies the government will implement.

But Bryan Caplan explains another reason why each of us as a voter generally exercises less wisdom than we do in our private affairs. This other reason springs from what Caplan calls our "preferences over beliefs." Each of us wants to believe certain things. Each of us gets satisfaction simply by holding certain beliefs firm to our hearts. Just as many of us enjoy feeling loyal to our favorite sports teams, many of us enjoy believing that our favorite political party is an especially wise steward of the public interest.

Many of us enjoy believing that our troubles are caused by foreigners. Many of us enjoy believing that if the rich pay higher taxes, middle-class and poor people will be better off. We resist rejecting these beliefs even if the evidence before us suggests that they are mistaken.

Unlike in private affairs, where actions taken on mistaken beliefs typically and directly harm the person taking such actions, when people vote their mistaken beliefs in elections, they don't suffer personal repercussions of their poor choices and they enjoy the personal gratification of voting according to their beliefs.

With no direct and obvious feedback telling a voter with mistaken beliefs that his beliefs are, in fact, mistaken, a voter who cherishes his mistaken beliefs has little incentive to abandon these beliefs. So, according to Caplan, it's no surprise that politicians successfully pander to economically ignorant voters.

It's important to repeat, however, that the same person who votes "irrationally" likely acts rationally in his private affairs -- because in private settings each of us generally gets what each of us chooses, however wise or unwise those choices.

This direct connection between personal choice and personal consequences is one of the great advantages of private spheres of action over political spheres of action.