Paul Krugman has an excellent 8 page article titled ‘How Did Economists Get It So Wrong’ in the New York Times. The link can be found here
The conclusion states that “economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work perfectly”. An interesting admission, and something some of us have been saying for years. Assumptions allow you to construct premises which in turn allow you to build logical arguments. But, as any philosopher knows, logical is not always true. False premises build rational conclusions. Logically correct but empirically false.