Do People Really Lack Knowledge About the Economy? A Reply to Facchini

Abstract

Facchini uses a behavioural approach to analyse the political beliefs of French people, who he believes are ‘more or less incompetent’ in economics. In this article I focus on his premise that the public are incompetent and that therefore their views, such as being opposed to the market in the case of the French people, should be interpreted as ‘perception bias’. Other economists may echo Facchini, claiming that people who voted Leave in the UK and for Trump in the USA did so because their lack of economic knowledge contributed to an ‘anti-foreign bias’. However, I argue here that the existing empirical research showing that people lack economic knowledge is flawed. Many economists adopt a questionable approach to the interpretation of public knowledge and the evaluation of what knowledge is important.