One device used to get members of my writing group involved in the writing process is a “Why?” question.
Why did you move to Florida? Why did you choose to live in Good Samaritan Village? …and so on.
A philosophy professor gave an essay examination with a one word question. “Why?” The popular legend passed from generation to generation is that one student responded to the one word question with an equally abbreviated response. “Because.” For his courage and insightfulness, that student was allegedly given an A, or so the story has been repeatedly shared.
In my attempts to respond to questions that begin with “Why?” I have unwisely attempted to develop a thoughtful and prolonged essay meant to meet my inquisitor’s expectations. In retrospect, I now believe that I should have been honest with myself and mercifully brief in my attempts to answer “Why?” questions. During the last attempt to respond to a “Why?” question, it occurred to me that I was thinking after the fact; and having already completed the choice that I was justifying, I was manufacturing a reason or reasons to appear to be calculating and rational in my decision-making. In fact, most of the decisions I make are spontaneous and often intuitive rather than the result of a methodical, rational process.
Recently, I purchased a college course from The Great Courses program available to anyone with a few extra dollars and a desire to continue learning. The course I chose was “Thinking Like an Economist.” I must admit that I chose it because it was less expensive than other courses, most of which sounded more interesting. If there is one thing that I am not, it’s an economist. The minimal balances in my bank accounts and my excessive credit card balances are mute testimonies to my economic prowess. As it turned out, however, the course was not merely suitable for fledgling economists. It was appropriate for anyone who makes decisions, financial or otherwise. It offers a thoughtful approach to decision-making that I can apply to future “Why?” essays. At the same time, I can actually use a process to follow while making choices on a daily basis. Win, Win…
Let me articulate the process of answering “Why?” questions assisted by Professor Bartlett from one of The Great Courses … “Thinking Like an Economist.” I will borrow freely from the lectures. The material that follows is 90% Dr. Bartlett’s verbage, only slightly and infrequently edited by me.
Dr. Bartlett says economists utilize six principles in making choices. First, people respond to incentives. If behavior is rewarded, people will do more of it and do it more intently. If a behavior is penalized, people will do less. Next, when you make a choice, there is an opportunity cost. More of one thing always means there is less of something else. Any use of limited time or of limited resources is an opportunity to use them again, forever gone. The third principle states that no thing is just one thing; there are always at least two sides to every interaction/decision, competing choices. The forth principle involves unanticipated influences. Decision-making is often impacted by things we cannot anticipate or control. In addition, there is the principle of unintended consequences. In our interconnected world, our decisions are going to have unanticipated consequences. Finally, no one is, and no one can ever be, in complete control.
Economists sometimes refer to the decision-making process based on these six principles as a “paradigm.” As I recall, a paradigm is a framework providing an example or structure to follow in undertaking an action. Using the economist’s paradigm should be helpful as I try to simplify my answers to “Why?” questions or, more often, to explain the rationality of my daily choices and their consequences.
Dr. Bartlett also added “Three Core Concepts” to the six principles previously presented. Together, the principles and concepts were called “The Economist’s Tool Kit.” As a non-economist, I think of the principles and concepts as a “tool kit” for determining “Why?” My decision-making could certainly benefit from a structured, rational process, borrowed from whatever philosophical or scientific source available. The three concepts provided are 1) rationality, 2) marginal analysis, and 3) optimization. I found the “Three Core Concepts” very useful and found they offer clarity to the six principles outlined previously.
Rational decision-making (rationality) follows four simple steps: 1) clarify the objective, 2) identify all possible alternatives to achieve the objective, 3) carefully evaluate the pay-offs for each of the alternatives, and 4) select the best option and implement your decision. (Such obvious steps and yet, so frequently ignored.) Rationality helps us with predictions and later, with a description of our behavior. It gives us a way to predict before acting and to evaluate after the fact. Strategic decision-making and rationality help us evaluate our behavior in an objective manner. To do otherwise leads to “irrational” choices and possibly, regretful consequences.
Marginal analysis is a core concept that points to the fact that most decisions are not “all-or-nothing” decisions. Most decisions involve marginal trade-offs. There is a connection between opportunity costs and marginal value that can be determined by marginal analysis. The difficulty of certain choices is often the product of only a slight difference in possible outcomes.
The final core concept is about optimization. This means figuring out the best attainable allocation given a set of constraints. If we accept the “principle of scarcity,” that there is an unavoidable imbalance between our wants and the limited resources available, we are forced to derive as much benefit as possible within a given limit. The more constraint, the more limited the resources, the more difficult the decision.
I have found the paradigm from behavioral economics both interesting and potentially useful. As a method of decision-making, the previously described economic thinking has the potential to eliminate irrationally. For me, writing this essay is the second step in a kind of “trinity:” 1) first, thinking, 2) then, stating, and 3) ultimately, doing. Perhaps, I am two-thirds of the way to becoming a better decision-maker, not only in matters of economics, but in all of my daily decisions. If abiding by what Dr. Bartlett has said in his lectures helps me, I thank him. If I fail to utilize his “tool kit” effectively, I will have to accept the blame. The process seems obvious and simple enough…which begs the question, “WHY have I come to the process so late in my life?”
The next time, I am called upon to write an answer to a “Why?” question, I intend to develop my answer while “Thinking Like an Economist,” (or if I chose… after utilizing the principles and core concepts prescribed, I could just answer, “Because.”)