- Dismal as it is to admit, all decisions are economic decisions.
- Economic decisions always and everywhere aim to make the best use of our time to maximize well-being.
- And while price is undeniably one variable in the equation, it's not the only one.
Dismal as it is to admit, all decisions are economic decisions. We know many an individual who would blanch at that statement. These are the same folks who would rather get a root canal then attend a lecture by the likes of Ben Stein. ("Bueller? Bueller?")
But it's true! We think more folks might share our fascination if they realized economics isn't only about money and prices. Those are just the most obvious physical representations of deeper concepts. Economic decisions always and everywhere aim to make the best use of our time to maximize well-being. Be it physically (Big Mac, Coke, and fries), monetarily (working for a crisp, newly minted Ben Franklin), or metaphysically (an hour contemplating the tangerine of mindfulness)—whatever maximizes well-being settles how we spend our time.
For example, some may believe the silver lining of recently higher energy prices is they've forced folks to make better economic decisions. Many who used to drive to work now take a bus, a train, or maybe even bike. Imagine the savings! By taking a cheaper means of transportation, commuters are now making the clear, rational economic choice—all they needed was a little nudge from prices.
But were folks being irrational before? Absolutely not. People base their decisions on more than dollar signs. The old saying goes "time is money"—but perhaps it's more accurate to say time is well-being. That means economic decisions are made when folks weigh all the physical and intangible costs and benefits of possible activities, then choose the path maximizing well-being. It's hard to fathom what can always make that equation balance, especially in a developed country where many have some disposable income to play with.
Perhaps a commuter is willing to drive to work despite higher gas prices to allow time for the intangible benefit of practicing tai chi in his local park as the sun rises. Someone else might sacrifice tai chi for the longer train commute so he can stare out the window and think. Which is the right decision? They're both right. Each has consciously and subconsciously weighed the value of their time and made the decision maximizing their well-being. Price is undeniably one variable in the equation, but it's not the only one. And whereas price is easily quantifiable, most of the other elements aren't, and can't be simply expressed in words or numbers.
What's more, who's to say either commuter isn't being productive, even when making what might seem to you an apparently unproductive choice? The martial artist practicing tai chi in the park may strengthen body and mind enough over time to act coolly in a tight spot that saves lives or wins a big contract at work. Or our friend looking out the window on the train might successfully unify quantum mechanics and relativity as he contemplates the chaotic urban sprawl rolling by.
It's dangerous to assume we can accurately value one activity over another, and twice as dangerous to be confident enough to act on our assumption and force a perceived "right" decision on others—individual economic choices are just too unpredictable, creative, and complex for any one person or group of people to comprehend.
And as tempting as it is to criticize other folks for spending their time irresponsibly, judge not lest ye be judged—we spent last Sunday in our pj's watching an eight-hour Star Trek: The Next Generation marathon. (That said, we're confident our now near-encyclopedic knowledge of life on a 24th century starship will in some way contribute to our own welfare back here in the 21st…who's to say it won't?!)