The other part of Pete Boettke’s focus on behavioral economics and the challenge to rationality is: what kind of people are in charge? Does it matter? I mean there is the familiar knowledge problem (and also the “rationality” of the leaders, the designers of the framework of choice); and there is the problem of integrity or morality.
In the world of Hollywood, there are only two kinds of people, good guys and bad guys. The typical action story is about a government-run diabolical cover-up of a diabolical national-security project hatched and run by diabolical government agents. Witness the latest incarnation of same: The Bourne Legacy. The members of this genre abound. This is the stuff of pop entertainment. It works because we are outraged by the behavior of the bad guys and buoyed by the actions of the underdog heroes (acting for all of us) who oppose them and ultimately prevail. Notice that the plot depends on the unraveling of an oppressive system/project hatched and run by the bad guys because of the conscience-driven behavior of some good-guy(s). In other words, someone defects and all hell breaks loose. Frequently an attempt at a cover up leads to further embroilments and so it goes – through (to date) four parts of the Bourne story and hundreds of millions of dollars later. Clearly the system, depending as it does on the good-faith cooperation of all of its participants, is very fragile. There are some incentives, but they are not fail-safe.
Now, it’s true, of course, that some of these bad guys think they are actually the good guys. They are working for some greater good - keeping us safe from the terrorists. But, we are led to believe, they are deluded. The terrorists are not the problem, they are! How ironic. How sad. Good drama, irresistible action.
We need this to make the movies, no doubt. But what is the implied solution? It’s obvious. Put the good guys in charge – the guys that are not deluded or corrupt. As Lord Keynes assured us, it is not government per se that is the problem. It is that the wrong people are in charge. You don’t see movies along the lines “the road to hell is paved with good intentions” when the good guys are in charge. No wonder Keynes won the debate.