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A review essay on a book by Don Lavoie, National Economic Planning: What Is Left? (Cambridge, Mass: Ballinger, 1985 [see listing in IRPS No. 51]). This work combines an excellent argument against central planning with a nebulous one against the objectivist theory of knowledge. Lavoie's discussion of economic planning draws on classical economic arguments as well as contemporary situations, eg, the reindustrialization of Japan. It is argued that Lavoie is unfairly critical, even dismissive, of neoclassical economics; also, he asserts a connection between a critique of planning & of objectivism that is unclear & undeveloped. It is suggested here that the subjectivity of market agents does not preclude an objective analysis of their behavior. Although Lavoie seems committed to the views of Karl Polanyi, these views lead in directions with which Lavoie would disagree. A. Waters

The paper presents a model of 'rational irrationality' to explain why political and religious beliefs are marked not only by low information (as the notion of rational ignorance highlights), but also by systematic bias and high certainty. Being irrational – i.e., deviating from rational expectations – is modeled as normal good. The reason that irrationality in politics and religion is so pronounced is that the private repercussions of error are virtually nonexistant. The consumption of irrationality can be efficient, but it will usually not be when the private and the social cost of irrationality differ – for example, in elections.

Abstract
This paper considers how Bryan Caplan's concept of rational irrationality may manifest in various political institutional arrangements, building off the demand curve for irrationality. Mob democracy, anarchy, autocracy, and constitutionally constrained democracy are the governance structures addressed. While anarchy is strictly better than mob democracy, under certain conditions, democracy, anarchy, or constitutionally constrained democracy may yield the best outcomes depending on the circumstances.

This brief commentary makes two points. The first is that fear can play multiple roles in any decision-making process. The second is that accurately determining whether reactions to fear are irrational is a complex task. Though neither point necessarily requires that symposium participants abandon their positions, together they suggest that extreme care is necessary in developing policy prescriptions based on the claim that fear can trigger irrationality.