In this third and final of the series on Ha Joon Chang’s critique of ‘free market economics’ I examine his account of ‘bounded rationality’ and the case for greater economic regulation. As in much of his work the policy conclusions which Chang draws simply do not follow from his premises.
In chapters 16 and 19 of 23 Three Things They Don’t Tell You About Capitalism, Chang asserts that free market economics rests on the view that actors are fully rational and that individuals always know what is in their best interests when deciding to buy, sell and invest. Drawing on Herbert Simon he argues that people often do not know what they are doing because the limitations of the human brain make the world too complex to fully understand. Thus, there are often advantages from restricting individual choice in order to reduce the complexity of the problems people face…
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Utopia, you are standing in it! 
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