From Friedman to Wittman: The Transformation of Chicago Political Economy

Bryan Caplan ()

Econ Journal Watch, 2005, vol. 2, issue 1, 1-21

Abstract: Donald Wittman's "Why Democracies Produce Efficient Results," argues that the "markets work, democracy fails" outlook typical of many economists rests on bad economics. After summarizing Wittman's main arguments, I maintain that Wittman too hastily accepts the assumption of voter rationality. There is an extensive body of empirical evidence showing that systematically biased beliefs about politically-relevant topics—especially economics—are widespread. Chicago political economy would have developed in a more productive direction if it had treated rational expectations as an empirical hypothesis, and modeled irrationality as a normal good.

Keywords: democratic failure; irrationality; systematic bias; rational (search for similar items in EconPapers)
JEL-codes: A11 D70 H11 (search for similar items in EconPapers)
Date: 2005
References: View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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