‘Keep It Simple Silly’ is all very fine as rhetoric goes. The harsh truth is we end up making things complex, as evindenced in the Barclays’ controversy over manipulating Libor rates.
The story is really not about whether ants are rational creatures or not. Nor indeed is it about the presumed rationality of human behaviour — a defining principle for pretty much everything in economics.
One can actually argue both ways. If ants aren’t rational, that only strengthens the case for greater rationality among human beings. It is a case of, that’s-why-ants-are-the-lowly-creatures-that-they-are and-we-are-what-we-are.
On the other hand, one could argue that if even ants are expected to not behave rationally at all times (at the very least), can human beings be expected to do so? So out goes the theory of rational expectations guiding human behaviour.
But there is a third way of looking at it. Whether you are an Argentinean ant or a human being, all living creatures, whether by nature or by circumstances, are forced to choose more complex alternatives when simpler ones are available. “Keep It Simple Silly’’ is all very fine as rhetoric goes. The harsh truth is we end up making things complex for ourselves.