When I was studying economics in college, the most surprising thing I learned is that economics is what happens when you combine psychology with resources. I had assumed economics was more of a math/formula sort of discipline. There is plenty of that too, but the core of economics is human psychology.
Let’s talk about that.
The reason I say economics is psychology plus resources is that every transaction is based on human expectations. Businesses will invest heavily today if they believe customers are optimistic and likely to spend. If the mood is pessimism, and people are saving their pennies, those expectations stifle business investment.
I could go on for an hour about how your expectations are what creates value in this world. For example, you only make deals with people that you expect to perform. You only hire people you expect to do the job well. You only spend money if you expect to someday make more. You only buy a home when you expect real estate values to be strong in the future. And so on.
Economies run on expectations. And expectations are the result of our complex human psychology.…Scott Adams' Blog
Economics and Expectations (with a Trump point)
Scott Adams, creator of Dilbert
1 comment:
They only run entirely on expectations if there isn't a counterweight dampening system in place.
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