Economists typically consider identity to be relatively fixed, and this identity to be manifested in the choices. That is, we don't worry about where identity comes from, but assume this identity generates the preferences that generates the choices that economists observe. Not always, but in empirical work, mostly.
Were we to become a bit philosophical, we might say the Frankfurt School of the Existentialism movement agrees, contending that action reveals the self. Action is always the result of a choice. It is from the situations the universe places you, and the opportunities for action it demands of you, that gives you the opportunity to form your own kinetic identity. So long as we do not make our choices by mimicking others man is absolutely free, this Existentialism movement contends.
In light of these considerations, I wonder if economists should cease waxing theoretical about the "welfare" of man and instead concentrate on what economists do best: study the wealth of man. Yes, "wealth" itself can be as intangible as welfare, as much of our wealth is bound within goods and services that are not traded in markets, and hence, not easily valued. But still, we know that one's happiness and most rewarding moments come not when we have the most money and leisure, but wehen the universe tests us and we prove ourselves robust—those moments when Providence betrays us and we discover our identity in its most admirable form. Like a Frenchman during the German occupation of World War II (see below).
We were never more free than during the German occupation. We had lost all our rights, beginning with the right to talk. Every day we were insulted to our faces and had to take it in silence. Under one pretext or another, as workers, jews, or political prisoners, we were deported en masse. Everywhere, on billboards, in the newspapers, on the screen, we encountered the revolting and insipid picture of ourselves that our oppressors wanted us to accept. And, because of all this, we were free. Because the nazi venom seeped even into our thoughts, every accurate thought was a conquest. Because an all-powerful police tried to force us to hold our tongues, every word took on the value of a declaration of principles. Because we were hunted down, every one of our gestures had the weight of a solemn commitment. The circumstances, atrocious as they often were, finally made it possible for us to live, without pretense or false shame, the hectic and impossible existence that is known as the lot of man. Exile, captivity, and especially death (which we usually shrink from facing at all in happier times) became for us the habitual objects of our concern. We learned that they were neither inevitable accidents, nor even constant and exterior dangers, but that they must be considered as our lot itself, our destiny, the profound source of our reality as men. At every instant we lived up to the full sense of this commonplace little phrase: “man is mortal!” And the choice that each of us made of his life and of his being was an authentic choice because it was made face to face with death, because it could always have been expressed in these terms: “rather death than…
—Jean-Paul Sartre in La Republique Du Silence (1944)
Modern Intellectual Thought
Lecture 24: Existentialism and the Frankfurt School
The Teaching Company