Alberto Mingardi asks,
Shall we pretend events like globalisation and the feeding of billions are the clear result of the actions of some brilliant men, and that’s it? Shall we produce a Marvel comics version of the free market, that instead of focusing on the invisible (indeed) interactions of many, praises just the courage and intelligence of few?
Read the whole thing. I believe that the issue of agency is indeed very important.
1. As individuals, we are inclined to view our successes as due to our own efforts and choices and our failures as outside of our control.
So, if you have some good things in life, you tend to overstate how much you earned them and understate the extent to which you were fortunate. When you look at others, you tend to see a more appropriate mix of earned success and luck. As a result, to most people, the economy looks unfair. We can see the element of luck in the success of those doing better than us. We don’t see the element of luck in our own success.
One wise piece of advice I got from a co-worker is that they way to be happy is to compare your salary and work effort to that of colleagues who work harder and earn less. Instead, most people do the opposite, and it makes them unhappy. It is a very difficult trick to see your own salary as being lucky in comparison with someone else’s.
2. We are more inclined to think of economic outcomes as determined by deliberate agency than by emergent phenomena.
Thus, we attribute the state of the economy to policy. In my view, we much over-rate the control that the Fed has over the stock market and the economy.
The politician who promises to “fix” the economy can take advantage of both of these inclinations. He can appeal to people’s bias toward seeing the system as unfair by saying that the system is broken. And he can take advantage of people’s bias to over-rate his ability to control economic outcomes by saying that he can fix the system. Of course, after he has been in office a while, unless he has gotten lucky, these inclinations will work against him and in favor of a challenger.