Selfishness, Greed and Capitalism

Economists believe people are perfectly rationalin the extremely unlikely event of his vote being decisive,the costs of electing a fool or a knave will be dispersed overa large population. In short, voters can afford to indulgetheir irrational impulses at virtually zero cost every fewyears.This is very different from being irrational with one’sown money in the market. A poor decision in the marketplacewill cost us our hard-earned money. A mistake atwork might cost us our job. It is because the private costsof making a bad choice are so much greater when our ownmoney is at stake that we are incentivised to gather informationand choose carefully when making a purchase inthe marketplace. The more expensive the item, the greaterthe incentive we have to educate ourselves about what weare buying. In financial transactions, it is rational to spendtime gathering knowledge about the options. In politics,unless you are a journalist, politician or lobbyist, it is rationalto ignore the whole circus and spend one’s time moreproductively. ‘Voting is not a slight variation on shopping,’says Caplan (2007: 140–41). ‘Shoppers have incentives tobe rational. Voters do not.’ There is, therefore, no contradictionbetween being a rational actor in the market andan irrational or ignorant participant (or abstainer) in ademocracy.ConclusionThere is no assumption in mainstream economics thatpeople are perfectly rational and it is quite absurd tosuggest that ‘neoliberal economists assume that human35