> This is a big problem of free market fundamentalism, in my opinion. It's far too optimistic about how rational people are.

I think it's a problem with your understanding, in my opinion. If you accept that people are inherently irrational, wouldn't a representative government be equally irrational? Unless of course one accepts the notion of the benevelent actor who burdens himself with the task of propellingn society foward against its will. A parental figure in a sense, who safeguards his sheep for the greater good. You essentially believe in batman, and I'm the optimistic one. I say this lightheartedly, simply trying to illustrate my view.

You're putting words into dscrd's mouth. They didn't say that people are "inherently irrational", which would imply that making a rational decision would be some extraordinary occurrence.

Likewise, I wonder if it's reasonable to claim that people are "inherently rational", because we all know from experience that it doesn't require extraordinary circumstances for a person to make an irrational choice. People make both rational and irrational decisions all the time!

I know you're trying to make a lighthearted jest, but your benevolent actor = batman illustration seems a little too mean-spirited in its chiding. You start by misconstruing dscrd's meaning, and end by claiming that dscrd's "essentially believe[s] in batman".

I don't think it's unreasonable (irrational?) to presume that people are capable of increasing the amount of rationality they wish to apply to a problem based on its stakes (although we have plenty of anecdotes to support the counterpoint to this, as well), while still constantly making irrational choices on things which are (or appear to be) lower-stakes.

For example: I probably wouldn't build a house next to a coal power plant. I would consider that to be a rational decision. On the other hand, I may be a smoker, or really, really love doughnuts. There may be rational components to each of those (they give pleasure), but when viewed in the light of my decision to not live next to a coal power plant (I don't want to eventually get sick), they seem like pretty irrational decisions (because they'll eventually make me sick).

If I'm misinterpreting dscrd's argument please help me out. I interpreted his critique to markets as they won't work because they represent the will of the people, and sometimes the will of the people is wrong (because they're irrational)? He seemed to accept that argument and wanted to push it forward..

> There may be rational components to each of those (they give pleasure), but when viewed in the light of my decision to not live next to a coal power plant (I don't want to eventually get sick), they seem like pretty irrational decisions (because they'll eventually make me sick).

Sounds like value theory to me. It's a simple cost/benefit analysis. Donuts make me reeeaaally happy, so I'll indulge. To make up for it, I'll run a mile. I like eating a donut and running a mile over not having a donut at all. It's not a matter of rationality, but preference -- which is what value should reflect. The creation of value can't be institutionalized by a central planner because preference is so diverse and changes at a rate quicker than any beurocracy can address. Again, just one persons observations.

>If I'm misinterpreting dscrd's argument please help me out. I interpreted his critique to markets as they won't work because they represent the will of the people, and sometimes the will of the people is wrong (because they're irrational)? He seemed to accept that argument and wanted to push it forward..

Yes, that was pretty much my critique: people are often irrational. I think you mispresented that critique by taking it to absurdity. Continuum or slippery slope fallacy?

I guess I don't agree with your use of "rational". Motives such as selfishness and greed are perfectly rational. They may not be altruistic, but they sure as heck make sense. I associate irrational behavior with children, the insane, and mentally handicapped. These are people who are not capable of reasoning. Corrupttion, cronyism, and greed all make perfect sense.

Saying free markets aren't effective due to mans selfish nature is a reasonable observation. I agree that markets would be more effective with more altruistic agents. But then again, what wouldn't be? I believe whatever shortcomings in human nature that voluntarily interacting people face (ex, selfish agents in a market) will only be magnified in a Statist society. A "bad guy" trying to game the market with anticompetative practices sucks. What sucks more is this bad-guy gaming the government, and everything government regulates (hint, everything).

The difference is that people are more willing (or perhaps capable) to be rational and idealistic about long-term abstract decisions like voting for a candidate who wants to ban unhealthy food, than about immediate everyday decisions like whether to eat a salad or a donut...

While that's not entirely implausible, if we start structuring societies around that idea, then the state could justify any action to a scary extent. You know, for the greater good, we know better, yadda yadda.

Well, that's a bit of a false dichotomy.

But for argument's sake... Even if people (as in, most people) are irrational, that wouldn't necessarily lead to their rulers being irrational, would it? After all, we supposedly* select people who are good at ruling to be rulers, just like we supposedly select people who are good at healing people to be doctors. They are expected to be better at it because they are interested in it, have studied it and are focused to do it, not because they're supermen.

* yes, this could be tad optimistic, especially under democracy because of the very irrationality of most people

> we supposedly* select people who are good at ruling

The consumer is irrational, but the voter is rational? This is a contradiction.

The operative difference between a purchase and a vote is that purchases are (1) voluntary, and (2) continually adjusting to changing conditions.

Please reread my comment. Everything you said was covered there already.

I had a professor once who invested in the stock market a lot. He invested a lot in Apple, but he always looked dismayed. When we asked him about it, he replied: "the market can remain irrational longer than I can stay solvent." So while, I believe that the market is ultimately rational, there are delays which can make it appear irrational.

No, this is not a problem with market fundamentalism, whatever this is, but with properties ascribed to market fundamentalism.

Advocates of free markets tell you that the outcome is such and such if and when market participants can serve their interest as they see fit. They don't tell you that the outcome will be what you call "rational".

You appear to be assuming that wanting to cure malaria in some other country is more rational than wanting to cure one's own baldness. Can you provide an argument for that?

Instead of rational, I would say valuable. Curing malaria can be more valuable than one's own baldness due to altruistic motives such as love, empathy, compassion. It can also be valuable for selfish motives. People do things like donate and volunteer all the time, so I don't think it's an unheard of concept.

All this is true, and the point is that "free market fundamentalism" is perfectly consistent with it. Free market fundamentalism doesn't assume people are "perfectly rational"; it assumes that people value things and will do things that they reasonably expect to lead to things they value. (I realize that you know this, but I'm not sure the parent poster to mine does.)