Be Careful with Theory & Humans
My last post was about how important it is to learn about economics. I stand by that statement but also offer a warning. Traditional economics considers humans like robots that can gather and consider all the data instantly and then make purely rational and correct decisions.
That is not how humans are built.
Two simple examples:
- Think of the last time you were really angry. Did you make rational decisions?
- Have you bought a used car (or anything used)? Did you know everything about the condition of the car so you could properly factor the risks of ownership into the cost?
The answer to both is obviously, “No.” We are not always rational nor do we always have access to all the relevant information for decision making.
Economics is great to know. Truly it is. But spend time studying and learning about human psychology as well. Combining psychology and economics is a powerful framework for making decisions and understanding the world.
A Good Economics Textbook
One of the deficiencies of my college education was not taking an economics course. I recently fixed that by spending 15 minutes each morning reading Principles of Microeconomics by Gregory Mankiw. Everyone should read this book (or something similar). Microeconomics is mostly common sense but, unfortunately, it seems that too many people – especially our politicians – don’t know these lessons.
Short aside: It’s amazing how much you can learn by just reading 15 minutes a day. In this case, it took me about six weeks to read a 500 page textbook that will be useful for the rest of my life.
Never Stop Learning
I’ve toyed with blogging several times but never hit on a theme that really resonated with me – until now. I have a big reason to blog – two reasons in fact: Theo and Jonah. My two little boys that inspire me every day to be and do better.
This blog is dedicated to them. Or more specifically, my attempting to teach them some of the the things I think I’ve learned so far.
In this first post I want to share what I think is the most important thing someone can do to be successful and happy in life: stay curious and keep learning.
Fortunately, this is not something limited to school. You can be curious and learn for your entire life. That’s what makes it so great. Here are just a few of the things you can do:
- Go to school and pay attention.
- Read books – especially non-fiction.
- Listen to podcasts.
- Watch documentaries.
- Talk to other people about what they know.
- Ask people to challenge your beliefs, and don’t get mad when they do.
- Take the time to observe the world.
- Just think about things. You can sit quietly or, my favorite, go for a run.
- Ask, “Why,” a lot.
That last item may be the most important. It shows the root of learning: curiosity. Don’t just be curious about your corner of the world. Be curious about everything. It’s fun to learn something new. Beside, you never know when it might be relevant to your life.
A simple example: prime numbers. 50 years ago calculating large prime numbers may have seemed nothing but a bit of fun for weird mathematicians. Not really an important part of life. Then came e-commerce in the mid-90s. Suddenly people wanted to send their personal and credit card information over the web, but they didn’t want the wrong people seeing it. Guess what? It turns out that large prime numbers are the foundation of online encryption. What was once just mathematical gymnastics turns out to be the lifeblood of a new technology.
The world is full of similar examples of seemingly trivial information becoming very important and valuable as technology and life change – and they will continue to change.
So, Theo & Jonah, please, stay curious. Please take the time to follow where that curiosity leads. Learn. It will not only lead you to success but, I believe, show you the path to a happy and fulfilling life.