you're working off the strawman version of rationality. people are are perfectly rational...from the perspective of small hunter gatherer tribes inconstant conflict for status and resources.
I thus thus didn't use a straw man, but rather the operational definition of rationality traditionally employed by mainstream lines of economics.
You're onto something with your definition in that a lot of friction and inefficiency today originates from people not coping well with an environment that is fast-changing and very different from our environment of evolutionary adaptiveness.
We were evolved to be rational, but only in the environment that we evolved from. The environment we have now is far from small hunter-gatherer tribes, yet we are still equipped with the same rationale mechanisms. Hence, it's not working out perfectly.
Maybe if we restructure our society to simulate what it once was or at least some parts of it, we can better utilize our rationale mechanisms.