On The Paradox of Choice -- Related To Happiness

I've become hopelessly addicted to watching TED videos lately. Two of them have been of particular interest:

The Paradox of Choice -http://www.ted.com/index.php/talks/barry_schwartz_on_the_paradox_of_choice.html

Why Are We Happy -http://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy.html

The first one about the paradox of choice was of particular interest. It pretty much encapsulates a lot of ideas that I've had recently about happiness. This is where my inner "socialist" comes out. How can I explain this?

We all act in our own self interest. Today we don't have to make all of our own food, make our own clothes, build our own houses, etc. We have decided to divide our labor and specialize into different fields of interest. I am a technology consultant. You might be a doctor or a flight attendant or a customer service rep. We each try to do the job to the best of our ability and we benefit from everyone else who specializes and we exchange the money from our jobs for goods and services from others. This is how our economy works.

Although this format may try to maximize efficiency in our economy, does it really make us all happier? I'm convinced that everything we do is to increase our happiness. Every action we take is an attempt to increase our happiness.

In the labor market, we all act in our own self interest. We pick the jobs and/or careers that we think are best and will maximize our earnings and wages relative to our interest in the job. We we specialize into different fields more or less independent of what others think we should do (obviously we would want to pick jobs that have a decent demand for their goods and/or services).

When we're in each of our respective professions, we are generally trying to maximize our earnings. Our companies are doing the same thing. So when we offer products and/or services to our customers, we're trying to get the most money we can get out of them. We are NOT trying to maximize their happiness. Curiously, the more choices we offer them, the more confused they turn out to be.

Example:

You go to the grocery store looking for some salad dressing (as the video stated). You get arrive to the arrive, and OH CRAP, there are a ton of dressings here. Which one should I get? I wonder which ones tastes the best? If I choose this one, will it be good? Will I regret buying this salad dressing if it's not good?

I'm convinced we each ask ourselves variations of the same questions for each purchase we make. There's not just one option. There's tons of options! How to pick?

This is the source of our unhappiness. Not necessarily being unhappy, but just less happy relative to the situation if we didn't have so many options. Excessive options confuse people and lead them to question their decisions. This is not to say that SOME choice is good, but I'm just saying that if we had fewer choices, then we would be MORE happy.

Again, I'm trying to say that since we are all acting in our own self-interest within the professions that we work in, we're trying to maximize our earnings and not thehappiness of customers. This leads to an aggregate decrease in happiness due to all the options people have.

In the video, Barry Schwartz says that is there were more "income redistribution", then we would take some of the excess choices from the rich people and give them to the poor people, who would actually benefit from more choice. I think this idea is problematic, but very interesting. It's problematic in its implementation, because who wants Uncle Sam coming for more of their money? But if Uncle Sam did, maybe they (richer people) would actually be happier...

This ties into the second video question why we are happy. It very nicely reinforces my point that people who have more options question themselves more and have more an internal struggle in their daily lives.

Example from the video. You have a class of photography students who get to choose 2 pictures from their collection of 10 to be blown up and framed. For half of them, you tell them that they should choose one of the two pictures and they will have 3 days to change their mind about the choice. For the other half, they must make one final decision on the picture that they will choose. Who do you think is happier, the people with our without the choice? Turns out the people who are stuck with their initial choice are happier. Whoa. Doesn't work out like you think.

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I hope these videos spark some thoughts in your mind. They sure did for me. I think that if we all step back and accept that people in our industrialized nation are somewhat paralyzed by all the choices that we have and think about all the good we could do by giving those in other countries more choices, we would ALL be better off. It's amazing. Life wants to be simple.

On The End of Capitalism

After 6 months of reading it on and off, I finally finished the book Che Guevara: A Revolutionary Life. I've always wanted to learn more about him, and at 750 pages, I definitely learned more about him and Cuban revolution than I ever did before.

One thought that stays with me is the idea that eventually capitalism might end. Maybe our brand of capitalism is not sustainable. Maybe it needs to be changed. Now before you sit there and call me a brain-washed, socialist bastard, just hold on a second. I think we're all trained from day one here in the United States to say that capitalism is the best thing since sliced bread and everything else will fail. That really neglects the situation for all the people in the developing nations around the world. Because especially today, we are wealthy at their expense. So while we sit here and watch our football, go to our malls, and spend money we don't have, there are millions are people who really don't have anything.

This brings me back to 2 summers ago when I went to Mexico, Guatemala, and Belize. One day at breakfast there was a Christian group (about 20 deep) that were having breakfast at a table near me. They had come to this country to visit and were saying their various prayers. I just couldn't help but ask myself, do they ever wonder how they ended up in the United States and most people live in poverty and have a daily struggle. How do you reconcile that with the idea of a "loving God"? I just can't erase that memory from my mind.

There's this huge gap that we have created between the developed and developing nations of the world. The question I keep asking myself is: will our technological prowess eventually end scarcity of most essential items?

I'm not saying this is going to happen tomorrow or 1 year from or even 10 years now. I'm saying in the distant future, will everyone be able to have essentially what they need? We will be so efficient and advanced in everything to the point where we are abundant with the necessities for living life. To me, at that point capitalism doesn't really make sense. In capitalism, you need a steady stream of new products. People need to buy things over and over to keep the economy going. For example, look at our "recession". The savings rate went from .5% to 4.5% and we've had a complete shit show in the economy. HELLO. People are actually saving money and not spending it on crap. But, that's the thing. For capitalism to work, you need people spending money. When we don't, the whole thing goes completely to hell. When you got those stimulus checks from G-Dub, he didn't want you putting them into the bank. He wanted you to spend it and keep yourself in this cycle of debt that is all-too common in our country. He doesn't want you to save money in a recession, especially with 70% of our economy being consumer spending-- see Paradox of Thrift.

My question is, will we ever be so efficient and advanced that we don't need to buy any more crap? Will we have everything that we need? But if that were to happen, not many people would have jobs. Capitalism just wouldn't work.

Thoughts?

On Capitalism

Lately I've been thinking a lot about the status of our economy and world. How did we get into this mess? How are we going to get out of it?

Barack Obama has been accused (by various media outlets and commentators including Fox News of course) of implementing "socialist" programs that are going to weaken our country in the long-run. "We can't have universal health care, because it's going to cost too much." "Why should we (the rich) have to pay for that?" However, there is a an inherent flawed assumption in any argument that says the US in becoming a socialist state. The assumption is that you can only have either capitalism or socialism -- nothing in between. It completely ignores the FACT that economies/governments lie on a spectrum or even a grid among different ideologies.

Enacting new government programs does not make us automatically a socialist society over night. Sure, maybe it's a step in that direction, but the way people talk about it these days, we will be like Cuba in no time. Therefore, calling the US "socialist" is irresponsible and ignorant at best. Secondly, let's address another inherently flawed assumption, that the US is a purely capitalist state. It's just not true. Purely capitalist states wouldn't have governing bodies over our markets (Securities and Exchange Commission), libraries so anyone can read (buy your own damn books), the public school system (why should I be paying for your kid to go to school), etc. In a capitalist state, everyone would fend for themselves. However, let's just get it out there....capitalism FAILS in the end. The market is not perfect....only in your economics classes. If markets were rational, then we wouldn't be in the financial mess that we're in. Markets cannot regulate themselves. So if you say that markets can fix themselves, ask yourself why someone would buy a house for $500,000 that is now worth $350,000. Sure, now the person has a $150,000 loss and that's their problem. But, if the market was actually efficient and rational, they wouldn't be in the situation in the first place. The market doesn't know everything.

Another thing -- people who think that capitalism is the be all, end all solution, apparently haven't looked around the world. They haven't looked at all the countries that have been looted for their resources, they haven't looked at all the people starving and hungry, they haven't taken a step outside of anything that they know. So while they drive their Hummers, drinking their fancy wine, and living in the McMansions, please just tell them to give one thought to the other people who didn't have the same opportunity. "Oh, but those people are just lazy" -- this is the classic line from the capitalist pig. People don't have opportunity around the world, they can't get credit, and most importantly, they dont have a good EDUCATION.

Education is the most important thing a person can acquire. But a comprehensive, (non-biased) education is not widely available around the world. Hell, in such an advanced nation such as ours, we still have people being influenced by wackos who tell us that condoms don't prevent AIDS and evolution is a myth. Former President Bush's Every Child Left Behind Act crippled our country for eight years. So while his friends at Exxon Mobil and Halliburton had windfall profits at taxpayer expense, the future of America was slapped in the face with a substantial level of education.

Coming back around, Obama is magically becoming a socialist in the eyes of the loony conservatives because he wants people to actually have a good education and have healthcare. A successful nation needs these two things to be successful in the long-run. Why is that hard to understand. More on the socialism at another time....