Assuming the rationality of economic actors goes wrong primarily because economists don’t know what “rationality” is and come up with weird accounts for what “r

Assuming the rationality of economic actors goes wrong primarily because economists don’t know what “rationality” is and come up with weird accounts for what “rational” behavior would be under given circumstances. They aren’t talking about “rational” behavior in the sense laymen use the term. The “invisible hand” is also something that actually does exist and is straightforward to explain. It’s the tendency individuals making decisions in their own self-interest to find others with compatible self-interest as the motivation to make a trade. Every mutually self-interested transaction adds up to a total gain for the overall economy because each side makes the trade precisely because they judge the other’s offer to be of higher value to them. The key to demystifying the observation is the insight that “value” is a judgement made by individuals in relation to their own lives, not some inherent property that can be determined apart from individuals value judgements.