The biggest error holding back many economic thinkers is the idea that rational profit-maximization is the way that people make economic decisions, rather than a way that people make economic decisions.
The greatest economic inflence is not from people who compute all the alternatives but from, well, influencers -- the sort of people who get paid for product endorsements. Often it's celebriies, sports stars, pretty young women, but sometimes influence is less obvious, not from fame but from people who are naturally resistant to being influenced because they pursue their own interests and creations. There's a 1961 Avram Davidson science fiction story, "The Sources of the Nile" about a Madison Avenue guy tracking down the one family who starts all consumer trends, without being aware that they are doing so.
What has long puzzled me is that economists talk about rational decision making but assume that everyone comes in with the same point of view. They have the same knowledge, the same skills, the same abilities, the same social status and so on. This is unrealistic on the face of it. It ignores the path dependencies of each economic actor and the resources they can command. You can do physics this way assuming all oxygen atoms are more or less the same, but it doesn't work as well with people.
The greatest economic inflence is not from people who compute all the alternatives but from, well, influencers -- the sort of people who get paid for product endorsements. Often it's celebriies, sports stars, pretty young women, but sometimes influence is less obvious, not from fame but from people who are naturally resistant to being influenced because they pursue their own interests and creations. There's a 1961 Avram Davidson science fiction story, "The Sources of the Nile" about a Madison Avenue guy tracking down the one family who starts all consumer trends, without being aware that they are doing so.
That's very sensible.
What has long puzzled me is that economists talk about rational decision making but assume that everyone comes in with the same point of view. They have the same knowledge, the same skills, the same abilities, the same social status and so on. This is unrealistic on the face of it. It ignores the path dependencies of each economic actor and the resources they can command. You can do physics this way assuming all oxygen atoms are more or less the same, but it doesn't work as well with people.
Wonderful insight, very thought provoking, thank you.
Enlightening essay.