In school, economics was often an orphan that was largely ignored, rarely enjoyed, and almost instantly forgotten (civics always seemed condemned to a similar fate).
Decision-making and choice.
At its most basic, economics is about decision-making and choice—how we divvy up limited resources in an effort to satisfy everyone’s unlimited desires. Whether the situation involves foreign aid, Halloween candy, a mother bird feeding her brood, or scoring a ticket to see the Rolling Stones, you can’t always get what you want.
Get the biggies right.
In our personal lives, nearly every moment of every day we are faced with choices, many of which demand little thought or effort. Some controllable decisions, however, are more significant: who you marry, how many children, level of education, where you live, and your lifestyle. Each choice is the act of making up our mind and each decision we make involves tradeoffs. Although these tradeoffs do not necessarily involve money, frequently they do.
Traditional economists assume we are fully informed, perfectly rational dweebs who calculate exactly what choice will maximize our overall long-term happiness. Behavioral economists, on the other hand, know better—people aren’t machines. Cognitive psychologists Kahneman and Tversky (1981) researched the decision-making process and found convincing evidence that humans are hard-wired to make errors in judgment. And more frequently than we realize, the choices we make aren’t in our best interest.
Develop your power!
Behavioral economists study the intersection of economics and psychology—how flaws in our thinking and fallibilities in our beliefs influence our economic behavior. Personal (behavioral) economics focuses on you—how your daily decision-making affects your skills and interests, career options, financial management, and achievement of life-aspirations. Indeed, today is already the tomorrow, which was shaped by your decisions of yesterday.
Controllable decisions can, and often do, have unintended long-term consequences. Today we live in a very competitive society—you can’t just talk the talk. To succeed, you must be cognizant of your limitations, expand your knowledge of the real-world, and apply what you learn in a practical manner to your own life. For young persons (and the young at heart), it’s the key to developing power over an unpredictable future.
When your desires are strong enough, you will appear to possess superhuman powers to achieve.
~ Napoleon Hill
Learn more about this, and other interesting topics, in the Young Person’s Guide to Wisdom, Power, and Life Success.
Image credit: “Egg” by Kacper “Kangel” Aniolek (2007), licensed under CC BY-SA 3.0 and CC BY 2.5.
