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The Storm and the Butterfly

In the 19th and 20th centuries, standard economic models assumed that people would act in a rational and predictable manner. These models are flawed, of course, for if modern psychology has taught us anything it is that we are massively complex beings who are ultimately in important respects not predictable, often not rational, and certainly often rational in ways that are judged irrational by ‘experts’. We are moreover (and this is less widely understood) not predictable not only in practice but also in principle: i.e. this is not a limitation that can be overcome.