Economics: Observation 42. The Balance of Decisions. 2023

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My name is Mark Rubin, and I'm a dream weaver. I hope these widgets help you weave your dreams into reality. This is a story about economics. And it's a story about how economics works in the context of energy transfer. When I started the lessons from nature podcast, which was in 2023, one of the scientific domains we discuss is economics. And I had an economics expert on with me David door. And we discussed the the lens of economics through B behaviors, and human behaviors. And this is based on the book honey as money that I wrote with Dan Rome. And as I was recording the four episodes of the economic series, I was also thinking about my time at Pepco, which is an earlier story I told her Pepco is the electric utility. In Washington DC, I had a job there, I work in energy conservation. In particular, this thing called demand side management, which was basically efficiently matching supply and demand. And I've done things like that my whole life was sort of optimally matching the energy coming in and the energy going out to the work that needs to be done. And that's the same thing. And so economics does that with money. And business does that with money in a different way at the level of work. Economics just does it with just energy itself, which is, which is money trying to balance things. One of the things that I learned when I was recording this with David is something that I already knew about decision making, or at least how I decide things. And how the way that human beings conceptualize energy determines their decision making to a large degree, about both short term thinking and long term thinking. So this this story is about like decision. So I have a model of how I decide, which is based on a balance scale. That's balancing perception of value against perception of worth. If something has a value that's higher than the value of my worth, then I'll trade my work for that value. And specifically, and I'll put a picture of this below. What I trade is almost balance scale. There is three things on a left side of a balanced scale, and three things on the right side. On the left side, it's inspiration, motivation and manipulation. Inspiration is a feeling and motivation is a feeling. And manipulation is a feeling. The inspirational feelings, which is the most valuable one are feelings of like a bigger purpose or being part of something important, something meaningful people have me find meaning and inspiration. The reason this is the most powerful force in terms of economic decision making, is because people are willing to volunteer their time and work and risk for no compensation. If they feel inspired. You see this in religious structures, and also military structures, people will at times volunteer to fight with a potential to die for no money if they believe in a cause. When people don't feel inspired. The next best thing is motivation. And motivation is usually done with rewards and typical reward and businesses money trading some money for a job, and then potentially giving them a bonus if their performance exceeds certain minimum thresholds in some way. And that's motivation. And people try, at least in general, to get more money over time by playing the games that are around them to try to minimize the amount of work they do and maximize the amount of money they get in different ways. That's the game of motivation. And that's not incompatible with inspiration. Because you can feel inspired and motivated to do something. So when you work somewhere that is doing something meaningful, and you're getting paid the amount of money that you think is worth it, it's worth it. And that's rare. In my experience. At least my work experience has been rare that I was working, doing something meaningful and getting paid for it at the same time. For me, it's always been a trade one or the other. The Third Assessment of value is a manipulation, which is doing something to pursue safety or avoid danger. And that's the worst possible way. The worst way to influence decision making It is through manipulation, that you see it play out in parts of the world, where there's not a lot of inspiration to be had. And there's not a lot of motivation to be had. So the only other tool in the toolbox is manipulation. And you see this in various structures, or same structures as before is religious structures and military structures to get people to either act in certain ways believe certain things or do certain things. So feel think do. So basically, these are these are the tools in the toolbox to get people to feel things feel inspired, feel motivated, feel manipulated, think certain thoughts, and take certain actions. That's one side of this decision making matrix the other side is on the furthest out is time. Next to that is effort and then the closest to the center is risk. What people are trading? Is their time effort and risk, the value their perception of the worth of their time, the worth of their effort and the worth of the risk. Is it worth it? Is it worth it? Is it worth it? For the value of inspiration, motivation and manipulation. And this is done on an individual level, by a person deciding and also on a macro level in terms of like wars that countries have that are either supported by the people or not? Is it worth it? Is it worth it? Is it worth it? And going back to the ideas that I learned when I was at Pepco about supply and demand? It's the same decision making? Is it worth it? Is it worth it to build a new, gigantic, multibillion dollar power plant? Or is it worth it to pay people some money to reduce their electrical consumption at peak times to avoid building a gigantic power plant? Somewhere in between those two endpoints is every decision that a person makes? Is it worth it? You know, I just think it's important to consider human beings and our decision making structures in the context of energy, because that's what we're deciding. Because in the end, we're trading work time, effort and risk for money. So of course, it makes sense that it works the same way as should I build a new power plant. Should I go to college? Should I go to grad school? Should I get a PhD? She whatever the decision is, is that's an investment of risk and time we're playing these games. And I think just basing basing the explanation on our energy and energy decisions. Instead of like this nebulous concept of money is an important step in helping people understand what it is that we're doing here on this rock going around this star at 90 miles per second.