But this argument puts Caplan in a precarious position. The consensus economic model that he subscribes to—and that forms the worldview of the economists that he cites as definitive—is grounded on the assumption that people are rational. Pull out that Jenga block and the edifice of Caplan’s economic worldview tumbles down with it: If people aren’t rational, there’s no reason to assume that they’ll respond predictably to incentives or market signals.
A very interesting article that talks about economists and their concern that the voting public will at almost every opportunity vote for proposals that the economists believe to be in direct opposition to the voters’ best interests. This raises the interesting conclusion that the market is the voters and if the voters don’t vote rationally then they won’t act rationally in the market and the market requires rational actors.
Interesting indeed. Market capitalism relies on rational thought and enlightened self-interest. Neither exists and therefor market capitalism must fail.