Clarification: my position is that our current level of understanding of how the economy works can, for the most part, be grasped by most people with some effort, rather than being an impenetrable mystery. Not that everyone actually does understand the economy because it’s super easy, and certainly not that if they did we wouldn’t have economic problems. None of what I said is incompatible with what you said.
It would be nice if understanding how things worked automatically led to things working better, but this is not the case.
A simple example where understanding an underlying problem doesn’t solve the problem: I understand fairly well why I’m tempted to eat too many potato chips, and why this is bad for me, and what I could do instead. And yet, sometimes I still eat more potato chips than I intend.
A more complicated case: a few people making a lot of money, while most people’s lives get better due to specialization and trade (counting the world economy as a whole, not necessarily within a particular village, or country) is what one would predict given an understanding of how the economy works. There are of course many complications in the real world that aren’t captured in economic models, which often make simplifying assumptions like “people are rational”. In the real world, people do things like eat potato chips a nonzero number of times.
A simple example where understanding an underlying problem doesn’t solve the problem: I understand fairly well why I’m tempted to eat too many potato chips, and why this is bad for me, and what I could do instead. And yet, sometimes I still eat more potato chips than I intend.
This is a great example.
Some people, specifically thanks to their better understanding of themselves, do not find themselves eating more potato chips than they intend.
If the economy is so easily understood then why do we have high inflation, a cost of living crisis, rising inequality?
The thing that is not understood is why these things are happening and how we can change things so that normal people are better off.
The fact that some people have some coherent theories for some aspects of the economy is not equivalent to us understanding the economy.
Clarification: my position is that our current level of understanding of how the economy works can, for the most part, be grasped by most people with some effort, rather than being an impenetrable mystery. Not that everyone actually does understand the economy because it’s super easy, and certainly not that if they did we wouldn’t have economic problems. None of what I said is incompatible with what you said.
It would be nice if understanding how things worked automatically led to things working better, but this is not the case.
A simple example where understanding an underlying problem doesn’t solve the problem: I understand fairly well why I’m tempted to eat too many potato chips, and why this is bad for me, and what I could do instead. And yet, sometimes I still eat more potato chips than I intend.
A more complicated case: a few people making a lot of money, while most people’s lives get better due to specialization and trade (counting the world economy as a whole, not necessarily within a particular village, or country) is what one would predict given an understanding of how the economy works. There are of course many complications in the real world that aren’t captured in economic models, which often make simplifying assumptions like “people are rational”. In the real world, people do things like eat potato chips a nonzero number of times.
This is a great example.
Some people, specifically thanks to their better understanding of themselves, do not find themselves eating more potato chips than they intend.
There is more.