That might all be true. However, the question is not discussed in a vacuum. It is discussed in the context of policy, seemingly often used as a core premise.

Thus the question remains: What kind of policy one exactly wants to base on 'human's irrationality'. And whether it is good to base policy on irrational behavior.

It is also important to consider that there will always be people who are more rational in their profit/money/power-maximizing than others.

A policy based upon irrational behavior might create an inefficiency that will be exploited by those with more rational behavior.

That's why I am wary about lines of reasoning along 'people are just irrational'.

I believe it creates system(s) of thought where somehow, we account for people's irrationality and thus make it more just/less cyclic/less prone to capital accumulation.

Yet, those who simply, coolly maximize their own gains, those who sort ideas like 'complex, advanced policy informed by the irrational behavior of humans' into the religion bin etc. will still come out ahead.

In other words: We generate complex systems of thoughts, especially in fields like economic policy. Rational actors will play with those systems, circumvent them, be creative, etc.

To turn the argument around: Given that human's rational behavior is limited, is it a good idea to create complex policy that makes it even less likely for humans to understand it and act rational?