The field of economics is desperately in need of a paradigm shift if it wants to play a role in improving the lot of humanity. Instead, mainstream economists keep trying to get away with tiny tweaks in their fundamentally flawed way of looking at the world. Consider, for example, the concept that still underpins most mathematical models of the economy: that firms and individuals have “rational expectations,” meaning that they all base their decisions on the same unbiased, probabilistic view of the future. A person deciding to buy a chocolate bar, for example, will consider such factors as the future price of cocoa ... (full story)