Bryan Caplan writes in Rational Ignorance vs. Rational Irrationality on a possible new way of thinking about public choice economics.#

Beliefs about politics and religion often have three puzzling properties: systematic bias, high certainty, and little informational basis. The theory of rational ignorance (Downs 1957) explains only the low level of information. The current paper presents a general model of "rational irrationality," which explains all three stylized facts. According to the theory of rational irrationality, being irrational - in the sense of deviating from rational expectations - is a good like any other; the lower the private cost, the more agents buy. A peculiar feature of beliefs about politics, religion, etc. is that the private repercussions of error are virtually nonexistent, setting the private cost of irrationality at zero; it is therefore in these areas that irrational views are most apparent. The consumption of irrationality can be optimal, but it will usually not be when the private and the social cost of irrationality differ — for example, in elections.

The paper takes the one idea--that irrationality is an economic good--and sees what comes out when it is examined.#

Wittman points out that "If voter misinformation were an important reason for poor policy choices, then we should be able to observe more informed voters making better policy choices." (1989, p.1401) But in fact, more educated voters seem as likely to support e.g. "pork-barrel" spending as anyone else, even when they do not directly benefit. Stark, Iannaccone, and Finke (1996) and Iannaccone (1998) make a similar point about the rationality of religious belief: Religiosity has not decreased as education levels have risen, and for the most part religious participation and education are positively, not negatively correlated. If all mistakes were the result of ignorance, one would expect intelligence and education to make errors smaller and less likely. But if mistakes are the result of tastes for irrational beliefs, the connection between intelligence, education, and error is less clear-cut. The cognitive elite may get passionately attached to beliefs about topics that most people never even think about. Even the "experts" may be highly informed about nothing other than their profession's shared illusions if employment and pay bear little relation to the correctness of the expert's opinions. As Orwell (1968) smartly put it, "One has to belong to the intelligentsia to believe things like that: no ordinary man could be such a fool."

The conclusion:#

The political scientist Gaetano Mosca laid down a powerful challenge to economics: "Economic science has penetratingly investigated the laws that regulate the production and distribution of wealth. It has as yet done little with the relations of those laws to other laws that operate in the political organization of human societies. Economists have not concerned themselves with those beliefs, those collective illusions, which sometimes become general in given societies, and which form so large a part of the history of the world - as has been well said, man does not live by bread alone." (1923, p.328) While some economists argue that irrationality cannot be reconciled with the economic approach to human behavior (e.g. Becker 1976b, pp.11-13), the application of the economic way of thinking to irrationality can also be seen as a striking vindication of economic imperialism.