economics

Paradox of the Border

Paradox of the Border

"What is this addiction? We have destabilized much of the world with our addiction. We’ve created a drug economy in Afghanistan, in Thailand, in Bolivia and we’ve caused turmoil in Guatemala and now we have elevated thugs in Mexico to the status of billionaires with our despair. And yet, we are an optimistic people."

~ Richard Rodriguez

What Young People Really Need to Hear about What Lies Ahead

The below essay was adaptated from Charles Wheelan's new book, 10½ Things No Commencement Speaker Has Ever Said, and was posted on the The Wall Street Journal site, April 30, 2012 (Thanks, Liz!):

Class of 2012,

I became sick of commencement speeches at about your age. My first job out of college was writing speeches for the governor of Maine. Every spring, I would offer extraordinary tidbits of wisdom to 22-year-olds—which was quite a feat given that I was 23 at the time. In the decades since, I've spent most of my career teaching economics and public policy. In particular, I've studied happiness and well-being, about which we now know a great deal. And I've found that the saccharine and over-optimistic words of the typical commencement address hold few of the lessons young people really need to hear about what lies ahead. Here, then, is what I wish someone had told the Class of 1988:

1. Your time in fraternity basements was well spent.

The same goes for the time you spent playing intramural sports, working on the school newspaper or just hanging with friends. Research tells us that one of the most important causal factors associated with happiness and well-being is your meaningful connections with other human beings. Look around today. Certainly one benchmark of your postgraduation success should be how many of these people are still your close friends in 10 or 20 years.

2. Some of your worst days lie ahead. Graduation is a happy day. But my job is to tell you that if you are going to do anything worthwhile, you will face periods of grinding self-doubt and failure. Be prepared to work through them. I'll spare you my personal details, other than to say that one year after college graduation I had no job, less than $500 in assets, and I was living with an elderly retired couple. The only difference between when I graduated and today is that now no one can afford to retire.

3. Don't make the world worse. I know that I'm supposed to tell you to aspire to great things. But I'm going to lower the bar here: Just don't use your prodigious talents to mess things up. Too many smart people are doing that already. And if you really want to cause social mayhem, it helps to have an Ivy League degree. You are smart and motivated and creative. Everyone will tell you that you can change the world. They are right, but remember that "changing the world" also can include things like skirting financial regulations and selling unhealthy foods to increasingly obese children. I am not asking you to cure cancer. I am just asking you not to spread it.

4. Marry someone smarter than you are. When I was getting a Ph.D., my wife Leah had a steady income. When she wanted to start a software company, I had a job with health benefits. (To clarify, having a "spouse with benefits" is different from having a "friend with benefits.") You will do better in life if you have a second economic oar in the water. I also want to alert you to the fact that commencement is like shooting smart fish in a barrel. The Phi Beta Kappa members will have pink-and-blue ribbons on their gowns. The summa cum laude graduates have their names printed in the program. Seize the opportunity!

5. Help stop the Little League arms race. Kids' sports are becoming ridiculously structured and competitive. What happened to playing baseball because it's fun? We are systematically creating races out of things that ought to be a journey. We know that success isn't about simply running faster than everyone else in some predetermined direction. Yet the message we are sending from birth is that if you don't make the traveling soccer team or get into the "right" school, then you will somehow finish life with fewer points than everyone else. That's not right. You'll never read the following obituary: "Bob Smith died yesterday at the age of 74. He finished life in 186th place."

6. Read obituaries. They are just like biographies, only shorter. They remind us that interesting, successful people rarely lead orderly, linear lives. [Portraits of Grief, The New York Times]

7. Your parents don't want what is best for you. They want what is good for you, which isn't always the same thing. There is a natural instinct to protect our children from risk and discomfort, and therefore to urge safe choices. Theodore Roosevelt—soldier, explorer, president—once remarked, "It is hard to fail, but it is worse never to have tried to succeed." Great quote, but I am willing to bet that Teddy's mother wanted him to be a doctor or a lawyer.

8. Don't model your life after a circus animal. Performing animals do tricks because their trainers throw them peanuts or small fish for doing so. You should aspire to do better. You will be a friend, a parent, a coach, an employee—and so on. But only in your job will you be explicitly evaluated and rewarded for your performance. Don't let your life decisions be distorted by the fact that your boss is the only one tossing you peanuts. If you leave a work task undone in order to meet a friend for dinner, then you are "shirking" your work. But it's also true that if you cancel dinner to finish your work, then you are shirking your friendship. That's just not how we usually think of it.

9. It's all borrowed time. You shouldn't take anything for granted, not even tomorrow. I offer you the "hit by a bus" rule. Would I regret spending my life this way if I were to get hit by a bus next week or next year? And the important corollary: Does this path lead to a life I will be happy with and proud of in 10 or 20 years if I don't get hit by a bus.

10. Don't try to be great. Being great involves luck and other circumstances beyond your control. The less you think about being great, the more likely it is to happen. And if it doesn't, there is absolutely nothing wrong with being solid.

Good luck and congratulations.

Permission to Ask the Sort of Questions You Asked as Children

From Freakonomics: The Movie (2010):

"Our incentives, unlike everyone else's, are to be honest. Because we built our whole reputation on, If we're honest about this issue and we're honest about this other issue then people will believe us when we're asked about everything. The worst thing we could do—the only way we can ruin our repuation—would be to start taking sides and fight...we're this peculiar beast which actually has the right incentives to just seek the truth and not have an agenda. "

~ Steven D. Levitt

"I don't think anything we've ever written or thought is gonna save any lives, really, or make people smarter or better in any way, but we kind of give people permission to challenge conventional wisdom sometimes and to ask a different kind of question entirely. A lot of times the questions are the sort of questions that you asked as children and people kind of chuckled at you, but once in a while they turn out to be really good. The problem is that as you get older and you ask them as adults—like if you're in a meeting or with your friends or whatever—and they laugh at you hard, and you just stop asking those questions entirely. We just kind of keep doing it. We say, What if this thing everybody thinks is so really isn't os? or What if that didn't cause this? What if this caused it? I think that there just needs to be a lot more permission for people to think like that." 

~ Stephen J. Dubner

See also:

Taming Extremism by Promoting Education

Excerpt from “What Oman Can Teach Us,” by Nicholas D. Kristof, New York Times, October 13, 2010:

oman In short, one of the lessons of Oman is that one of the best and most cost-effective ways to tame extremism is to promote education for all.

Many researchers have found links between rising education and reduced conflict. One study published in 2006, for example, suggested that a doubling of primary school enrollment in a poor country was associated with halving the risk of civil war. Another found that raising the average educational attainment in a country by a single grade could significantly reduce the risk of conflict.

Sorry if this emphasis on education sounds like a cliché. It’s widely acknowledged in theory, and President Obama pledged as a candidate that he would start a $2 billion global education fund. But nothing has come of it. Instead, he’s spending 50 times as much this year alone on American troops in Afghanistan — even though military solutions don’t have as good a record in trouble spots as education does.

The pattern seems widespread: Everybody gives lip service to education, but nobody funds it.

Creating a Portrait on the Cheap

From Anonyponymous: The Forgotten People Behind Everyday Words by John Marciano:

Étienne de Silhouette sil·hou·ette n. A shape distinctly outlined by background.

While living in London, Étienne de Silhouette stumbled onto the black-magic secrets of Anglo-Saxon capitalism and fiscal responsibility. He returned to Paris spreading the dark gospel, no more popular on the Champs-Élysées in the mid-1700s than now. Silhouette, however, had the ear of the royal mistress, Madame de Pompadour, through whose devices he was elevated to be Contrôleur général des finances.

To pay down the crushing debt being incurred from the ongoing Seven Years’ War, Silhouette suggested what amounted to an import of the British Window Tax, although he wanted to tax doors too, and just about everything else he could think of. Silhouette also proposed slashing the pay of bureaucrats—again, never a way into the Gallic heart—and even ordered the king to melt down the royal plate.

The most amazing thing about Silhouette’s departure after nine months in the office was that he lasted so long. Parisian ridicule of the finance minister didn’t stop with his fall from grace, and anything made on the cheap was said to be done à la silhouette, including the then-popular method of producing a portrait without having to draw, in which the “artist” traced the subject’s shadow onto a piece of black paper, cut it out, and stuck it in a frame.

Not Shying Away from Recessions

Economics professor Paul Zak in conversation with Krista Tippett on "The Science of Trust: Economics and Virtue," Speaking of Faith, July 9 2009:

"Economists talk of the cleansing effect of recessions. So recessions are necessary because they kind of cull out the companies that are not providing the best customer service, that are not making a profit, that are not providing some product or service that people need. And when those businesses go out of business, then those resources are redeployed to more important uses. The machines are reused; the people get different jobs. And so this keeps the economy kind of efficient. We don't want to kind of limp along and have high levels of inefficiency just because we love the name General Motors or love the name of some company if they can't kind of keep up with the herd. So competition drives that and that's an important part of maintaining efficiency.

But I think the same thing can happen in individual lives. I think as we get towards the end of every boom period, today or two years ago, the end of the 1990s and dot-com bubble, the end of the '80s and this kind of me generation, I think we do get out of whack because human beings are adaptable and we are watching what other humans are doing. We also become adaptable to this sort of yuppie, more stuff for me lifestyle.

I think, from a spiritual perspective, that recessions are also cleansing. So I think it's very important that we don't shy away from recessions and we don't try to outlaw them. I think we should say, 'Hey, there were excesses. This is how the excesses are corrected. And the excesses were both kind of on the macro level and even perhaps in my own life. Maybe I got a little over-excited about the extra bonuses I was getting and the bigger car. And now I want to sit down and reevaluate what's really important to me.' So I think there are great analogies between the micro and the macro, and we should embrace that.

Having said that, the stress issues are strong. One of the pieces of advice I like to give is: Turn off your TV. Don't listen to the pessimistic news every second of the day...

...Appropriate levels of stress are very good for human beings...There's sort of this misnomer that stress is bad. Too much stress is bad, but also too little stress is bad. So there's sort of this inverted U-curve...this sweet spot for stress that focuses your attention. So I think that when we're in that sweet spot, when we're focused, our memory's better and we're thinking clearly and we've got to figure out what to do next, that's actually very good for human beings and actually all other animals as well."

Digging In with Wendell Berry

Excerpts from a conversation between Jeff Fearnside and Wendell Berry from "Digging In," The Sun Magazine (July 2008):

Photo by Andrea BurnsJeff Fearnside: I’ve noticed that the Amish seem less self-conscious than most Americans. Why do you think this is so?

Wendell Berry: I’d say that in their community, honesty is the norm. One of the most striking things about the Amish is that their countenances are open. We pity Muslim women for wearing veils, yet almost every face in this country is veiled by suspicion and fear. You can’t walk down a city street and get anybody to look at you. People’s countenances are undercover operations here.

...

JF: In your Sierra Club talk, you said that you would like conservationists to become more interested in “economic landscapes” — in working farms, ranches, and forests. Do you feel that most people’s definition of the natural world is too small?

WB: The human definition of the natural world is always going to be too small, because the world’s more diverse and complex than we can ever know. We’re not going to comprehend it; it comprehends us. The question is whether we can use it with respect. Some people in the past who knew very little biology were able to use the land without destroying it. We, who know a great deal of biology, are destroying our land in order to use it.

...

JF: I came to Kentucky after four years of living in Central Asia, and I was struck by how environmental disasters both here and there have the same causes: shortsightedness, greed, and the concentration of wealth among a powerful elite. Do you think these are simply part of human nature?

WB: Greed is a part of human nature, and greed is the root cause of these disasters. Once you have greed and the means of Wendell Berryexploitation, the high-toned rationalizations — in other words, the excuses — follow as a matter of course. A real culture functions to limit greed. Our culture functions to increase it, because, we are repeatedly told, it’s profitable to do so, though the majority of the profits go to only a few people.

JF: We’ve talked about what consumers and producers can do to change things. What should the role of government be?

WB: The appropriate role of government should be to see that power and money don’t accumulate in too few hands.

JF: But too often governments act in their own self-interest and harm the people they’re supposed to be working for and protecting.

WB: Unless a community consists entirely of like-minded individuals, the community must, to some extent, have laws, which means government. It’s the nature of an organization like a government — or a corporation — to be self-aggrandizing and self-perpetuating. Once it starts running, it aims to keep running. The real limit on government would be reasonably independent, self-sustaining localities and communities. But if there is no local independence, then governments and other organizations have a kind of freedom that they wouldn’t have otherwise.

If you’ve got 300 million people, most of whom produce nothing for themselves or for the community and to whom everything has to be brought from somewhere else, then there’s no way you’re going to have limited government, or limited anything. All organizations feed upon the helplessness and ignorance and passivity of the people.

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