There is often a huge gulf between theory and practice. Nowhere is this more marked than in the expectations of human behaviour. Bob Browning explains what this means for economic policy.Economic rationalists like to remind us of Adam Smith’s remark that we depend on the self-interest of the butcher and baker, not their good will, for our meat and bread.Smith had a lot more to say than that, of course. But the economic rationalists are right – to an extent. If there is strong competition, then s…
