Introspection: Economics and Art
Faculty of Social Sciences at the University of Trent; October 13, 2018. “Common Mistakes in Daily Decisions – from Misunderstandings to Reality”. Lecture by Magalì Fia (part 2). See Part 1.
We now refer to the painting to see how things stand. In the painting, the mother forces her son to do things her way. She is persistently pursuing her idea. But did she ask herself what her personal goal is? And what about the costs and benefits of her attitude? Is she basing her decision on her imagination (“MAYBE”), or is based on reality?
The mother’s approach in the picture is to educate the child her own way without considering the child’s talents and aptitudes.
Can she achieve her goals by imposing things in this way? The problem is that we rarely impose things based on the result we want to achieve (i.e., of our aim). Rather, they tend to be based on the expectations we have (they are based on “MAYBE”, or wishful thinking). This is uneconomical behavior.
Through Economics and Art, we get back to reality. It shows that the expectations are uneconomical and clarifies the facts, putting on the table the goals and their related possibilities. By placing the costs and benefits of each option, economics provides a complete choice framework. This is true for both businesses’ and individual’s choices.
One might ask: How can I evaluate all the feasible alternatives? Sometimes I don’t even see them! The answer is straightforward: You can be objective about reality and not indulge in unrealistic expectations..
Lets give an example. If I want to buy a car, I must first clarify the purpose for buying it and second, consider my financial constraints. Indulging in unrealistic expectations would mean buying a Ferrari for daily travel when I earn $20,000 per year.
Here is another example: If I want to support my son’s education, I have to consider his aptitudes. I believe that taking part in an after-school activity is educationally desirable. I can stubbornly persist in the idea that he must play an instrument even if he has no musical ear and would prefer a team sport. Or I can clarify both the possibilities and the objectives.
The painting, named “blunder”, shows another uneconomical type of behavior.
In this painting, the boy tries to ride on the tricycle, but the wheels have been removed. This picture shows how we end up sabotaging our own initiatives by not properly managing unforeseen events.
For example, if I am going to speak at a conference and my train is late, I can give up the event complaining about the train delays. Or I can call the organizers and inquire if it is feasible to postpone my speech. Fears often block us from pursuing our goals.
Economics and Art can help us to decide in this case as well. We often realize that we have not made sufficient progress towards our goal only once it’s too late. We can prevent this from occurring by first asking ourselves what our purpose is and how we can achieve it. This is what distinguishes entrepreneurial initiative from proceeding randomly.
See other pages by Magalì Fia: