It's not that I think that he should give average citizens more credit for wisdom. He correctly points out that people are subject to what he calls pessimistic bias (believing that economic trends are worse than they really are), anti-market bias (believing that markets are meaner than they really are), anti-foreign bias (believing that trade with people of different ethnic or national origin is more dangerous than it really is), and make-work bias (believing that jobs have to be "created" and worrying that they might become "lost.")
However, I think that Caplan gives too much credit to well-educated citizens. While educated Americans might score somewhat better on measures of knowledge of economics, educated Americans are still far from trustworthy as policy formulators. Our most highly educated citizens, ensconced in the academy, are stuck on 1968 in the worst way. This includes many Ph.D economists.
Just as Caplan's treatment of political power is too one-dimensional, his treatment of political wisdom is too one-dimensional as well. He caters to the view that more education implies greater wisdom, thereby catering to the vanity of professors who hold that their left-wing views should be a model for the rest of us.
As an aside, I found it somewhat annoying that the Caplan consistently illustrates irrational political beliefs using protectionism. Protectionism is based in part on anti-foreign bias, which is more pronounced among the uneducated than among the academic elite. However, the other biases--anti-market bias, pessimistic bias, and make-work bias--are nearly as prevalent inside the academy as out. The academy is a hotbed of folk Marxism. But by sticking to the protectionist example, Caplan allows his academic readers to preen and wallow in their illusions of superiority.
However, one of Caplan's elitist ideas intrigues me. At a couple of points, he suggests that "get-out-the-vote" efforts, which expand participation of uneducated voters, might be harmful. This is something to think about. We have expanded the franchise considerably over the past two hundred years. It seems to me that this expansion has been correlated with increases in government power--voting rights for women, who at the time tended to be less educated than men, seem to have clearly had this effect.
It might be the case that the academy has responded to democracy. That is, rather than continue to teach the virtues of markets and limited government, academics have responded to political reality by developing theories that conform more closely to popular prejudices. For example, one might see Keynesian theory as make-work bias dressed up as technical economics.
It could be that if we had kept a restricted franchise, then government would have stayed smaller. If government had stayed smaller, then perhaps academics would have been less focused on supporting government expansion.
As things stand today, I share Caplan's doubts about the wisdom of ordinary people. But in addition I have much bigger doubts about the wisdom of the educated elite.
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