Awarding the Nobel Prize for economics to Richard Thaler should have been more controversial, says Peter Foster in the National Post. "If you had told Adam Smith that 200 years after his death the most prestigious prize in economics would go to a man whose main insight was that humans are irrational, he would surely be puzzled," says Foster. "If you told him that this same man‘s answer to this alleged problem was for governments to administer ‘nudges’ to improve behaviour, he would likely be appalled. Smith didn’t think humans were rational or that markets were, or could be, ‘perfect’, but he did think that government attempts to spur or regulate economic activity tended to have perverse results. "Behavioural economics is rooted in claims that economics is fundamentally flawed by a naive belief in human rationality. Thaler likens the average human to the incompetent Homer Simpson, calling him ‘Homer Economicus’. But if Homer represents the average human, does not Mayor Quimby cast d...
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