There’s no invisible hand of the market, and people rarely learn lessons in time — people often just get harmed.
“And so I would often hear something like the following — “Yes, yes. I understand that the people in your experiments and some of the people I know do foolish things, but in markets, then — and then I claim…” They could never quite finish this sentence without literally waving their hands, and the argument is somehow if you choose the wrong career or fail to save for retirement, that the market will somehow push you back toward being rational. There’s a reason why no one can make this argument without waving their hands, and that’s because the argument is just silly. You know, if you don’t save enough for retirement, what happens to you? You’re poor when you’re old. The market doesn’t discipline you. Suppose people have a weakness for gambling. What’s going to happen? Will people build casinos, or will they offer programs to help people curb their gambling addiction? Well, people have made a lot more money on casinos than on programs to stop gambling.”
— Richard Thaler on PBS – Hacking Your Mind
People who know better push for societal solutions to mitigate the worst happening to most. Don’t wait for everybody to push for that.
“Markets can remain irrational longer than you can remain solvent.”
— John Maynard Keynes