With rational voters, policy-makers have to do whatever the public wants; they can't "make a difference." With irrational voters, in contrast, policy-makers may be able to give the public the policies that it needs, rather than the policies that it wants.
...When a principal fails to understand his own interests, an agent who objects or disobeys does him a favor.
It's a good talk, and there is much that I agree with. But I want to highlight the P-sounding elitism. Caplan's world is a "we-they" world in which wise (dare I say Progressive) economists know more than ordinary people. That may be true on issues like international trade, drug legalization, and legalization of the sale of kidneys.
But I think about all sorts of other issues. In the late 1960's, economists came up with the idea of price controls to deal with inflation. (The good news is that we learned from that experience.)
Economists mostly believe in what I call hydraulic macro. This macro is consistent with what Bryan calls "make-work bias," the erroneous belief that jobs are scarce. I try really hard not to talk about jobs being scarce. Instead, I talk about the economy's planner (the market) being in the middle of a great recalculation, during which it lets some workers stand around idle.
My point is that there are many issues where economists disagree, and on most of those issues Bryan and I would be in the minority. A regime in which Progressive economists had their way would be better than what we currently have on a few dimensions, but overall I think it would be substantially worse.
On health care, the irrational public--the ones that want government to keep its hands off their Medicare--is helping to fight the Progressives who want to impose a health plan that is based on what I see as a failed model--the Massachusetts plan. In Bryan's ideal world, wouldn't our health care system be run by the wise technocrats of the Obama Administration?
Bryan might argue that with better economic knowledge among the people and/or more slack given to policymakers, the elites could make better choice on health care policy. I certainly think that it is worth the effort to try to explain health care economics. Maybe some of the technocrats will listen. But I would rather see people less infatuated with technocrats.
I am not a Caplanian because I do not think of the world as "we" the economists vs. "they" the irrational public. I think of it as "we" the oddballs who reject the People's Romance vs. the elites who espouse and manipulate that romance.