Rationality is somewhat of a new concept to humans. It's somewhat surprising that economists took it so literally for that long and put and any real faith in it. The lemma of rationality does make the math a LOT easier, and we're doing better now about the irrationality aspects, but that spurt of faith in rationalism was quite interesting.
For the large majority of our history, we've not been rational in the least. HN had a good discussion [0] on the Medieval Mindset [1] earlier in the summer. For ~1000 years in the Medieval period, the main mindsets were not rationality vs. irrationality, right vs. less-wrong vs. wrong, etc. But more Pious vs Impious, Cruel vs Kind, The Ideal vs the Real, etc. The people were no less people, but their heads weren't ours.
What economic theories will come next, what new ways of thinking, what new mindsets? We're so focused on the rational, the 'right' answers, these days. But life, as we all know, is VERY stochastic ( a fancy word for random ). Maybe new mindsets about the randomness, bounded and given standards of deviation, will be a new paradigm, not just in economics, but in everything we do.
For the large majority of our history, we've not been rational in the least. HN had a good discussion [0] on the Medieval Mindset [1] earlier in the summer. For ~1000 years in the Medieval period, the main mindsets were not rationality vs. irrationality, right vs. less-wrong vs. wrong, etc. But more Pious vs Impious, Cruel vs Kind, The Ideal vs the Real, etc. The people were no less people, but their heads weren't ours.
What economic theories will come next, what new ways of thinking, what new mindsets? We're so focused on the rational, the 'right' answers, these days. But life, as we all know, is VERY stochastic ( a fancy word for random ). Maybe new mindsets about the randomness, bounded and given standards of deviation, will be a new paradigm, not just in economics, but in everything we do.
[0] https://qht.co/item?id=17058487
[1] https://coinsandscrolls.blogspot.com/2017/09/thinking-mediev...