Tuesday, April 7, 2009

The search for irrationality

The great love of declaring people to be irrational whenever we can’t understand things strikes again… or maybe because it makes us feel rational goes on – and it’s ignorant, intellectually lazy and dangerous.

Latest victim – Garesh Nana from BERL declares this morning that the high level of volatility in currency rates arises because people are irrational in the face of extreme uncertainty. I can think of nothing more rational than to change your mind and expectations – quickly -  when faced with uncertain and rapidly altering circumstances.

Increased volatility is the result of absolutely rational behaviour.

Declaring this to be irrational boosts peoples “feel cute” quota I suppose. The implication is deadly - “these people are irrational and need some elite doing stuff for them”. Yeah right. And further if people are irrational and government is full of people why on earth would you advocate their involvement?

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