I'm very much enjoying Brian Caplan's The Myth of the Rational Voter. Favourite bit so far has actually been a quotation from Arthur Lovejoy and George Boas's Primitivism and Related Ideas in Antiquity:
"It is a not improbable conjecture that the feeling that humanity was becoming over-civilised, that life was getting too complicated and refined, dates from the time when the cave-men first became such. It can hardly be supposed - if the cave-men were at all like their descendants - that none among them discoursed with contempt on the cowardly effeminacy of living under shelter or upon the exasperating inconvenience of constantly returning for food and sleep to the same place instead of being free to roam at large in wide-open spaces."
The book's central theme is that voters (people) have a systematic bias against well-understood economic facts: that, for example, people distrust foreign trade that would almost invariably be to their long-term benefit and tend towards an unfounded future pessimism. I'm not that far through it. So far though; excellent, thought-provoking stuff. Also...if people are systematically predisposed to misapprehend basic economic truths, and if media concentrates on telling people the news they want to hear, presumably we get a feedback loop. Caplan argues thus:
"...for all the power ascribed to them the media are also consumer-driven. Competition induces them to cover news that viewers want to watch. In the standard rational choice account, this reduces political information costs and so helps democracy work. Yet I am sceptical that much useful information flows from media to viewers. Instead, like politicians, the media show viewers what they want to see and tell them what they want to hear."
If it is true that voters are systematically irrational, and true that a market for media obliges media providers to report the news the audience likes (and in the way the audience likes), the whole way in which the news is currently reported might represent a market failure. I'm still thinking about what that means.