How the Just World Fallacy Impacts Your Entire Life -Including Your Money!

Whether you believe in it or not, the just world fallacy impacts your life. It influences many decisions that people make, whether financial, political, or just day-to-day. The effects are all around you.

So what, exactly,  is the just world fallacy, and how does it impact your financial life?

What is the Just World Fallacy?

The just-world fallacy (also known as the just-world hypothesis) is the belief that the world is fair. Good things happen to good people, and bad things happen to bad people.


This misdirected belief can make life easier. It’s much easier to blame someone (or yourself!) for misfortune than to accept the fact that the world is unfair. As humans, we sometimes need to believe that good things will happen if we do the right thing. It’s so hard to wrap our heads around the complete lack of concern that the world really has. Things can’t just be random. There has to be a reason for everything, even if that reason is that we’re to blame.

Interesting –  What Does This Have to do with Finance?

I get it. You’re reading this and thinking to yourself – what the hell does any of that have to do with finance?

As it turns out, a lot. This insidious belief is what keeps some people trapped in a vicious cycle of poverty and keeps others believing that they deserve it. Believe it or not, a ton of the policies that are enacted in the US are, at their core, related to the just-world fallacy.

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But it also affects people on an individual level. People get so wrapped up in thinking that they deserve these random bad things that happen to them that they stop trying – stop believing they can do better. Instead, they blame themselves for any misfortune and spiral into a never-ending cycle of guilt and despair. It’s irrational but hard to avoid. 

Financial Policy

I think the most drastic impacts of the just-world fallacy emerge in the policies that our country supports. So many of the programs and initiatives we see have roots in this hypothesis -from health care to education, wages to food stamps. Our country has normalized the idea that good things happen to people who deserve it, and bad things happen to those that don’t, to such a massive extent that most of our social structures support it.

What is an Example of the Just World Phenomena? 

Let’s take a look at some of the common retorts we hear against promoting policies that lift everyone up, which are real-world examples of the just-world hypothesis at work. 

Wages: It’s your fault if your wages are low. You should’ve gotten an education and a better job. The minimum wage was never meant to support an adult life anyway.

Education: You should have gone to college. It’s your fault you have so much debt.  Maybe if you tried harder in school, you’d have a better job.


Healthcare: You should have taken care of yourself better. Get a better job if you want to be able to take time off if you get sick.

Food stamps: You shouldn’t have had kids that you can’t afford to feed. 

Do you see the common theme here? All the blaming, attacking, and flaws in the arguments?

Accountability Vs. Circumstances

I know what the naysayers are going to say. It’s kind of true. These people are responsible for their own actions. They made choices and are accountable for the outcomes.

And that’s true, to a certain extent. But sometimes (often really) things happen that are outside of our control, and they can affect all of these things. The just-world fallacy assumes that these circumstances are a one-in-a-million exception rather than the rule, but I disagree.

Wages: Wages are disgracefully stagnant, and with all the advances in automation, there aren’t as many high-paying jobs to go around. Getting a new job isn’t as easy as just applying. Raises aren’t as easy as putting in a few years.

Education: You can’t say that everyone needs to pursue higher education and also say it’s everyone’s fault they are in debt for taking out loans. There’s something very wrong with our educational system if only the rich can afford to better themselves. And, these arguments completely discount the fact that not everyone has the aptitude for education. Should those that don’t be resigned to a life of abject poverty?

Healthcare: Accidents and illness can affect anyone, regardless of how well they take care of themselves. Getting a better job isn’t as easy as you make it sound (see examples on education and wages above). And why is healthcare tied to employment anyway?

Food Stamps: There’s a severe lack of sexual education in the United States, and contraceptive is notoriously hard to get for women. Maybe if we provided people with the education and resources they need, they would make better family planning decisions and wouldn’t need to rely on food stamps to feed their children.

As you can see, these examples (and many more) show that it’s not always about personal responsibility. There are policies and programs in place that actively prevent people from getting ahead – using the justification that they don’t deserve to get ahead because they’ve made bad choices. This is the just-world fallacy at work in our policy-making.

Your Spending Reflects Your Beliefs

The just-world fallacy is also at play on an individual level, which can be even harder to identify. Sometimes the belief that we don’t deserve something is so ingrained that it’s subconscious. So, we act out in ways that others wouldn’t understand. Why are we constantly making destructive decisions? Why do we do things that we know won’t benefit us?


Sometimes, these questions can be answered by a belief in the just world fallacy. If someone believes this hypothesis, even on a subconscious level, they may assume that because bad things happen to them, they are bad people and somehow deserve it.  A streak of bad luck can completely destroy someone’s entire attitude. They stop saving money because it doesn’t matter. They stop investing for the future because they don’t think they have one. 

It can have effects in the opposite direction, too – if you’re relatively fortunate in life, you can start to believe that it’s because you are a good person. But that line of thinking can lead you to think that others, who aren’t so fortunate, are bad somehow and maybe not as deserving of good things as you are. And that informs all of your decisions, from the people you help to the policies you vote for. It’s a vicious cycle.

What Can We Do to Prevent the Just World Fallacy from Impacting Us?

The best thing we can do is understand it. We need to learn about the just-world fallacy and understand its implications in the world. This will help us think critically about the reasons why certain policies are pushed while others are ignored. Understanding that some of this is psychological will help us make better-informed decisions for ourselves and our communities.

One of the first steps to overcoming ingrained biases is to identify them. Examining ourselves and confronting the falsities in our deeply held beliefs is excruciating – but it’s not impossible. And we will come out of it for the better, and our communities will benefit.  

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Melanie Allen is an American journalist and happiness expert. She has bylines on MSN, the AP News Wire, Wealth of Geeks, Media Decision, and numerous media outlets across the nation. She covers a wide range of topics centered around self-actualization and the quest for a fulfilling life. 

3 thoughts on “How the Just World Fallacy Impacts Your Entire Life -Including Your Money!”

  1. But you said as much, it is only a partial fallacy. Two identically privileged people, one is honest and diligent and the other lazy and immoral, the honest person will do better nearly 100% of the time. No one would dispute this. The problem is people aren’t equally positioned for success at no fault of their own. And no sane person would dispute that’s unfair, that life is inherently grossly unfair. Great thought provoking piece. I’m one of the most advantaged people I know, in every way, and my success was inevitable in spite of a lack of grit. I know that’s unfair. Much better people than me much less, and suffer much more.

    • I’m glad you enjoyed the post! I don’t think it’s a partial fallacy. I think some people (many, really) truly believe in it, either on a conscious or subconscious level. The truth in the way the world works is more nuanced. I don’t believe that every person who is in a bad position is there due to circumstances beyond their control – but I think circumstances affect people more than we like acknowledge. I think it’s a complex mixture of both, and never as simple as the just world fallacy tends to make it.

  2. Nice post, not thought of this before. It is a good example of the importance of critical thinking and not getting swept up into herd mentality…

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