Why does the "rational actor" approach to social problem solving fail?

Here is an eleven minute lecture explaining the problem behind the problem behind the problem.



It is posted by Paul Rosenberg at OpenLeft. For those of us who are not academic researchers buried in the literature Jon Hanson lays out how the problem of tobacco sales was dealt with in law and public policy (the rational actor policy) and how the tobacco companies quietly applied psychology and social psychology to subvert the efforts of the government and the legal system to protect the public. It's found right after about the 9:45 mark.

To me this also very clearly shows the utter failure of all libertarian approaches to public policy. He does not use the term in his discussion, but he clearly demonstrates how the rational actor economic and legal model places all the blame for social problems on the individuals who have the problems and provides blinders to be used by those who benefit from those problems.