Does it pay to be reasonable and rational? I ask because the ONS points out that twice as many 16-24 year-olds express no interest in politics than do over 65s.
Such a position is quite reasonable. Many political issues are complicated - and complex. The cost of learning about them might well therefore exceed the benefit of doing so: no individual has much influence upon political outcomes and it is moot whether political activism in itself makes us happy or not. For this reason, scholars have long thought that a lack of interest in politics is rational (pdf).
However, this rational ignorance has cost young people dearly. It's no accident that the government has protected pensioners from its austerity policies* but has inflicted them upon youngsters by, for example, closing EMA in England and raising tuition fees - it's because pensioners are more likely to vote than youngsters.
This gives us a paradox. Rational (or at least reasonable) beliefs - such as disengagement from politics - might hinder the advancement of our interests, whilst irrationality might promote them. This is what the renaissance writer cited by Ed Smith meant when he wrote of the fortunati "who violate all dictates of reason and prudence, and yet they never fail."
I suspect this applies in several contexts, for example:
- An irrationally excessive estimate of the costs of an action can discipline us to avoid it. The recovering alcoholic who thinks "another drink will kill me" has a mistaken belief, but one which promotes his interest in staying sober.
- People who are irrationally overconfidence send out more competence cues and so are more likely to win promotion than others.
- An aggressive or unstable temperament can give you a strong bargaining position which enables you to win concessions. This helped keep Colonel Gaddafi in power for decades, and seems to be working in North Korea too: nobody messes with the pub psycho.
- Fund managers who take excessively high risks can win at the expense of their more rationally cautious competitors.
You might object that these examples show that the agents aren't really irrational at all, as the irrational belief gets them what they want. This would be true if the belief were chosen with that intention, but I suspect this is only rarely the case. More likely, these are examples of people being irrational but right.
My point here is not that we should (or shouldn't) cultivate irrational views. It's that social mechanisms - of which markets are one - don't necessarily select against irrationality and can sometimes select for it. Which is why irrationality is so widespread.
* You might object that older people have suffered from low interest rates. But as these are set by the unelected Bank of England, I think my point holds.