H.L. Mencken once wrote, "Democracy is a pathetic belief in the collective wisdom of individual ignorance." Many economists make the point that if the voting public is as uninformed as it appears, there is merit to the idea that half the voters will believe one side of a public-policy debate and the other half the other side, leaving a deciding margin with the very small minority of well-informed voters. While too severe in his expression, my view is that Mencken is closer to the truth and the time has long passed for America to correct this problem by upgrading required performance of the electorate.

We live today in what some call a "high-trust culture" where citizens trust process in government versus a "low-trust culture" where the state becomes the principal organizing force. But we lean ever closer to the latter form because the "will of the people" appears to be increasingly flawed and that miracle of aggregation seems not to apply. This is wrought by ignorant voters and – even worse – the irrational voter that fervently believes in misconceptions about America and the world in which he lives, specifically about the economics of society. In an industrial nation like the U.S., therefore, there is a need for private-sector leaders to inform their workforce and counter the educational sloth that seems to be entrenched in society. These topics are discussed in a study by Bryan Caplan, associate professor of economics at George Mason University and author of The Myth of the Rational Voter.

It is true that voters base policy preferences on mistaken economic models and that politicians are complicitous in heeding what voters want and not what is best for them and the country's future. So much for the decline of our high-trust culture. What is evident is the skew of median preference distributions containing bias. According to Caplan, this bias encompasses four major misconceptions.

The first of these is anti-market bias, which appears to be something rooted deep in human thinking. Markets provide profits to those who successfully ply trades, and profits imply receiving more than a fair price. Business profits are too high in the eyes of most voters, and the public greatly overestimates profit margins. Voters generally believe that business engages in collusion and monopolistic practices with no understanding that such approaches are self-defeating in a market economy.

The second misconception is anti-foreign bias and the tendency to underestimate economic benefits of interactions with foreigners. The zero-sum view is that foreign trade cannot be favorable because "if it is good for them, it must be bad for us." So restrictions on trade, or protectionism, assures fair outcome. Obsession with foreign trade balance is widely reported. However, equivalent transaction activity and imbalance between other political jurisdictions (states) or trade entities (individuals and local merchants) gets no attention with a failure to treat all purchases as cost.

A third problem is what Caplan calls make-work bias, which underestimates the value of conserving labor. Jobs are created by enlarging the GNP or by assuring via law and regulation that workers are less productive. Saving labor by producing more goods with less labor is perceived as a danger. There is a selfish hostility to "downsizing" due to illusions that employment is a measure of prosperity.

The last of these wrong-headed opinions is the pessimism bias, where public outlook is marked by views that overestimate the severity of economic issues and underestimate present and future economic performance. This is not expecting a Pollyanna outcome but recognizing reality. As Caplan concludes, "The typical voter to whom politicians cater is probably unable to earn a passing grade in basic economics. No wonder protectionism, price controls, and other foolish policies prevail." Our American world must change with regard to public education and perceptions of reality if the nation is to survive.

It is up to industry management to go an extra mile here – to fill a gap that is so obvious in citizen education … and getting larger. The "will of the people" must be meaningful to have value, force and effect.