Rational Fools

Nobel Prize winning economist Amartya Sen, coined the term “Rational Fools” nearly 35 years ago. In his famous paper, Sen criticized the first principle of economics: “Every agent is actuated by only self-interest”. On top of this axiom of rational self-interest lie rational action and rational expectations, leading all the way up to the efficiency of the markets. As mentioned in my earlier post on Galileo, this is basically how science is done: models are devised using abstractions and idealizations. However, if the model turns out to be totally meaningless in explaining the world, then those who stick with such a model are indeed fools, rational fools.

Here is a song that I wrote and animated on such ‘Rational Fools’:

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s