People, Money, and Life In General
It's been some time, apparently, since I posted on this thing, but that's largely due to there being freaking summer class and work. This semester involves an accounting class (not so bad; it's managerial accounting so it's generally logical) and a finance class (...which IS so bad; professor's not done the 5-week mini-mester deal before and it's showing in the pace).
Is it wrong to feel older when people you know are getting married, and it's actually a well-thought-out thing? (As opposed to my cousin, who dated his wife for 2-3 months before getting married 3 months later. But that's another epic story for later; just ask me some time. The high point was almost spiking the punch a bunch of Mormons had). Reference Esther and Michael for that. Good on them; though; they're actually in a position to do it in life.
The other big undertaking is that I've pretty much finished Atlas Shrugged. Now, a lot of people would probably look at the 1,100 page brick and think 'no way in hell', and prior to my economics class, I would've done the same.
I think everyone needs a good look at an economics course. It's also a bit of psychology; economics is a lot of figuring out how people think and respond to certain incentives. Apparently, not a lot of people understand supply and demand, either.
In a nutshell:
Supply: The more you supply, the more each unit you supply costs you. (Opportunity Cost: Each thing you give up means you give up a more important need. If I have 10 sandwiches, I can give up one and not miss it. If I'm hungry and have only one sandwich, it's still giving up a sandwich, but since I have only 1, I'll feel it much more keenly)
Demand: The more a person gets, the less they need each successive item. (Law of diminishing returns: each item you recieve fills in a less-important need).
(If I have 1 sandwich and get another, I'll be doing the happy dance if I'm starving. If I have 10 sandwiches and get #11, #11 won't have nearly the impact #1 or #2 did on my happiness).
So basically, there's a point where supply = demand; this is the equilibrium point and the price that everything in the market goes towards.
The other big thing that economics comments on is how people's incentives dictate their action.
Incentives
It's for this reason that I'm not really a major fan of handouts.
Now, I live out of my parentals' house still, so my own personal example isn't the best. I still hold down a job, and in exchange for all the help I receive for food, college, etc., I keep the house clean and do the grocery shopping. However, if I want to have fun, I must work for the money, and I must also work if I want to drive a car.
That aside, let's say you see someone who's not working. Well...ok, you feel bad for them, you've been told charity is good, so you walk over to them and peel off a crips $20 and hand it to them, 'to help them get back on their feet.' What have they learned from this? You just told them that if they do nothing and look needy, you'll give them a handout. Previously, they felt they had to work for money. Maybe they still feel that way. But, if enough people give you money for looking needy, will you really want to work? Looking needy leads to charitable donations, so instead of working, look needy.
...this is why, honestly? There are professional beggars. When I went to Birmingham Southern, there were such people camping by the off-ramp.
So...let's take this to the extreme. Now, if a person knows they will be paid for their work, they'll take pride in their work, because their work is feeding them, clothing them, and entertaining them (by allowing them to purchase Nice Things of whatever stripe tickles their fancy). They have an incentive to work. Now, let's say they're competing with other people. Well, if I make a better widget than my neighbor, and sell it to you, then I get the money. My neighbor gets jack. Some people will say this is ruthless Darwinism and I'm selfish for doing better than my neighbor. You know what, though? YOU got the fruit of my labor, and I got your money. My neighbor will either come to work for me, or find another speciality. Do you want to penalize me for doing better than my neighbor? Ok, fine, tax me, ridicule me...and see if I keep feeling the need to produce another high-quality widget for you.
Going to the more logical extreme, we'll get something like communism. Everyone's 'equal'; everyone's work goes into a pool and everyone draws out according to their need. Well, let's say I've got a 120 IQ in a room full of people with IQs of 60. Either way, I have more ability then them, so I'm going to do better work than they are. However, I'm going to get the same as everyone else; they're getting a portion of my paycheck in this example. What would I do? Keep producing at a loss to myself? Maybe I would look at them, and realize that if I do worse than them, I get THEIR profits. I shirk my job; I get all the benefit of shirking, and then only a little of the drawback; my paycheck goes down a little but I'm not even working for it.
Even if they're dumb, they'll eventually figure out that I'm riding off them, and then they'll shirk accordingly. Pretty damn soon, nothing will get done, because there's no personal reward for actually DOING anything.
On the flip side, I acknowledge that we can't go totally Darwinistic and dog-eat-dog, but competition benefits the consumer; you get the best product at the lowest rates, so long as competition is allowed to flourish.
If anyone tells you that the US economy is a free market, tell them they need to check their facts; the US is highly, HIGHLY regulated (licenses, professional unions, etc....don't even try to convince me the US is a free market. You're wrong. It's that simple, and I have the guns to stick to here.)
And that's a bit of why economics was enlightening.
Is it wrong to feel older when people you know are getting married, and it's actually a well-thought-out thing? (As opposed to my cousin, who dated his wife for 2-3 months before getting married 3 months later. But that's another epic story for later; just ask me some time. The high point was almost spiking the punch a bunch of Mormons had). Reference Esther and Michael for that. Good on them; though; they're actually in a position to do it in life.
The other big undertaking is that I've pretty much finished Atlas Shrugged. Now, a lot of people would probably look at the 1,100 page brick and think 'no way in hell', and prior to my economics class, I would've done the same.
I think everyone needs a good look at an economics course. It's also a bit of psychology; economics is a lot of figuring out how people think and respond to certain incentives. Apparently, not a lot of people understand supply and demand, either.
In a nutshell:
Supply: The more you supply, the more each unit you supply costs you. (Opportunity Cost: Each thing you give up means you give up a more important need. If I have 10 sandwiches, I can give up one and not miss it. If I'm hungry and have only one sandwich, it's still giving up a sandwich, but since I have only 1, I'll feel it much more keenly)
Demand: The more a person gets, the less they need each successive item. (Law of diminishing returns: each item you recieve fills in a less-important need).
(If I have 1 sandwich and get another, I'll be doing the happy dance if I'm starving. If I have 10 sandwiches and get #11, #11 won't have nearly the impact #1 or #2 did on my happiness).
So basically, there's a point where supply = demand; this is the equilibrium point and the price that everything in the market goes towards.
The other big thing that economics comments on is how people's incentives dictate their action.
Incentives
It's for this reason that I'm not really a major fan of handouts.
Now, I live out of my parentals' house still, so my own personal example isn't the best. I still hold down a job, and in exchange for all the help I receive for food, college, etc., I keep the house clean and do the grocery shopping. However, if I want to have fun, I must work for the money, and I must also work if I want to drive a car.
That aside, let's say you see someone who's not working. Well...ok, you feel bad for them, you've been told charity is good, so you walk over to them and peel off a crips $20 and hand it to them, 'to help them get back on their feet.' What have they learned from this? You just told them that if they do nothing and look needy, you'll give them a handout. Previously, they felt they had to work for money. Maybe they still feel that way. But, if enough people give you money for looking needy, will you really want to work? Looking needy leads to charitable donations, so instead of working, look needy.
...this is why, honestly? There are professional beggars. When I went to Birmingham Southern, there were such people camping by the off-ramp.
So...let's take this to the extreme. Now, if a person knows they will be paid for their work, they'll take pride in their work, because their work is feeding them, clothing them, and entertaining them (by allowing them to purchase Nice Things of whatever stripe tickles their fancy). They have an incentive to work. Now, let's say they're competing with other people. Well, if I make a better widget than my neighbor, and sell it to you, then I get the money. My neighbor gets jack. Some people will say this is ruthless Darwinism and I'm selfish for doing better than my neighbor. You know what, though? YOU got the fruit of my labor, and I got your money. My neighbor will either come to work for me, or find another speciality. Do you want to penalize me for doing better than my neighbor? Ok, fine, tax me, ridicule me...and see if I keep feeling the need to produce another high-quality widget for you.
Going to the more logical extreme, we'll get something like communism. Everyone's 'equal'; everyone's work goes into a pool and everyone draws out according to their need. Well, let's say I've got a 120 IQ in a room full of people with IQs of 60. Either way, I have more ability then them, so I'm going to do better work than they are. However, I'm going to get the same as everyone else; they're getting a portion of my paycheck in this example. What would I do? Keep producing at a loss to myself? Maybe I would look at them, and realize that if I do worse than them, I get THEIR profits. I shirk my job; I get all the benefit of shirking, and then only a little of the drawback; my paycheck goes down a little but I'm not even working for it.
Even if they're dumb, they'll eventually figure out that I'm riding off them, and then they'll shirk accordingly. Pretty damn soon, nothing will get done, because there's no personal reward for actually DOING anything.
On the flip side, I acknowledge that we can't go totally Darwinistic and dog-eat-dog, but competition benefits the consumer; you get the best product at the lowest rates, so long as competition is allowed to flourish.
If anyone tells you that the US economy is a free market, tell them they need to check their facts; the US is highly, HIGHLY regulated (licenses, professional unions, etc....don't even try to convince me the US is a free market. You're wrong. It's that simple, and I have the guns to stick to here.)
And that's a bit of why economics was enlightening.