There's a very good reason for why economics developed the way it did, and that is that in many situations, the assumption that people will exploit the opportunities available to them is very plausible, and it simplifies the analysis of how markets will behave.
Interpretation
The quote highlights the rational behavior of individuals in economics, emphasizing that assuming people will take advantage of opportunities simplifies market analysis.
Daniel Kahneman explains that the development of economic theory is rooted in the assumption that individuals act in self-interest by exploiting available opportunities. This assumption, while not universally true, offers a practical framework for understanding market behavior, making it easier to analyze economic scenarios and predict outcomes.
In practice
In a lecture on economic theories, one might quote Kahneman to discuss rational behavior in markets.
We think, each of us, that we're much more rational than we are. And we think that we make our decisions because we have good reasons to make them. Even when it's the other way around. We believe in the reasons, because we've already made the decision.
The average investor's return is significantly lower than market indices due primarily to market timing.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
Laziness is built deep into our nature.
Through some combination of culture and biology, our minds are intuitively receptive to religion.
You are more likely to learn something by finding surprises in your own behavior than by hearing surprising facts about people in general.
Ever since Darwin, we've been familiar with the stupendous timespans of the evolutionary past. But most people still somehow think we humans are necessarily the culmination of the evolutionary tree. No astronomer could believe this.
Disbelief in futurity loosens in a great measure the ties of morality, and may be for that reason pernicious to the peace of civil society.
In such a performance you may lay the foundation of national happiness only in religion, not by leaving it doubtful "whether morals can exist without it," but by asserting that without religion morals are the effects of causes as purely physical as pleasant breezes and fruitful seasons.
If you wish to shine like day, burn up the night of self-existence. Dissolve in the Being who is everything.
When it comes to solving problems of poverty, impact investing can act as a catalyst, but it is not a silver bullet. Successful businesses serving the poor need more than investment capital. They also need infrastructure to enable effective distribution, strong regulatory systems, access to markets, technical assistance as they scale up, and more
If you are seeking for security, certainty, your eyes will become closed. And you will be less and less surprised and you will lose the capacity to wonder. Once you lose the capacity to wonder, you have lost religion. Religion is the opening of your wondering heart. Religion is a receptivity for the mysterious that surrounds us. Don't seek security; don't seek advice on how to live your life.
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