Right and wrong do not exist in the eyes of the universe. Right and wrong are the constructs of human mind, which makes them automatically biased and subjective. That makes it difficult to define it and even harder to discuss it. But, I have not set out to define what wrong or right is. I have set out to talk about what wrong or evil represents or what it means.

I can draw the best parallels to wrong or evil with pain. What exactly is pain? How would do you define it? It is tough. Yet, we know why it exists. Pain warns us when there is something wrong, when something is not working harmoniously. When we get hurt emotionally or physically, it hurts. Only because it hurts we know that what happened was damaging to our well being. Pain is simply a form of information telling us that we are going against the grain.

Evil is similar to pain. It exists for a reason. The mere existence of it informs us, that our society has long ways to go before we all live in harmony. Evil or wrong doing is not an inherent human characteristic. Many times circumstances “force” people to act in a ways that damage the fabric of the human kind. The real question then is why do those circumstances exist that create incentives for people to do wrong.

The best answer to that question is that our society is very imperfect.  The number of crimes can be a very good indicator of how well the society as a whole is doing in living peacefully together. So instead of looking at people who do wrong as if there is something wrong with them, let us look at why they did what they did because that is the true cause of the evil.

It is easy to lock people up and put them to jail, but it is important to realize that targeting individuals is not going help. In a way, they are just victims to the circumstances, in which any other person might have reached a similar course of action. So the real solution to eliminating evil in the world is not the elimination of criminals, but the elimination of the root causes of evil, which give rise to wrong doing: poverty, hunger, inequality, etc.

Those are the real driving forces behind the evil acts committed by humans. Now, I am not saying that individuals do not have choice over their actions and that they should not be punished. I am not saying. What I am saying is that punishing criminals is scratching the surface.It is like taking pain killers to eliminate the pain instead of treating the root cause of the problem.

Rarely, if ever we dig down deeper to understand other people actions and motivations and try to eliminate those incentives, which allowed the negativity to flourish.

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Image Source: Ghetu Daniel

The recent global financial crisis, which originated in the United, caused a lot of discussion worldwide. There are a variety of topics, which can be discussed, but one that I think deserves the most attention is the law.

Law defines what is legal and what is illegal. It tells us the boundaries within which the firms and individuals can operate. Law sets up the rules, which we must follow or face consequences otherwise. Consequences are of course a matter of enforcement of the law by the government. Government has the role of an utmost importance: it has to create the laws, interpret the laws and subsequently enforce them.

I am sure what you just read above is nothing new. But have you really thought about the implications of it? Anything that is not defined as being illegal, by default is legal. If the law does not cover it, then you are free to act on it. Furthermore, even if you are acting within the bounds of law, does not make it alright. As Aristotle famously said: “Law is reason free from passion”.

When you look back at the event that took place before, during and after the unfolding of the crisis you will not find many people going to jail. The select few where the ones that committed fraud such Bernard Madoff and a couple of others. Everybody else operated with the bounds of law, yet their unethical and almost immoral behavior brought down the global world economy. The only problem is that, for the most part, being and unethical and immoral is not illegal or against the law. There are only select few cases where unethical behavior can be considered illegal.

By everybody, I mean all of the players in the global financial crisis such as: the mortgage originators, the mortgage brokers, the real estate agents, the servicing firms, the insurance companies, the investment banks, the banks, certain regulators who failed to do their job properly and even the media who had a part in feeding the real estate bubble. Nobody did anything that was illegal per say, and not many people went to jail for bringing down the global economy, but they armies of people played a part in the crisis.

The question is, shouldn’t it be a crime to cripple a global economy? I am not the one to answer that question, but the issues becomes obvious. Behavior that occurs with the bounds of law, is not always moral behavior and might eve have more adverse consequences than certain illegal behavior. For example, it is at banks discretion who it gives out the loans to and there is nothing illegal when you give a loan to somebody that is asking for it. But there is a problem, when you charge that person fees and then turn around and sell the mortgage to be securitized, receive the cash back from the principal and lend out again. None of the above behavior, was illegal, but it put undue risk towards the rest of the society.

But then the question becomes, do we classify immoral or an ethical behavior as illegal? If so, how doe we prove that something is immoral or unethical? Of course there are other ways to discourage immoral or unethical behavior such as setting up incentives against such behavior, but then the ball goes to the governments court. Government, like I mentioned before is the sole player who sets up, interprets and enforces the laws and creates a playing field for the society.

So, then the question becomes, is it the governments fault for setting up faulty rules, which allow personal interests to be put above the society’s interests?  I think it might be the case. It is a huge responsibility, but it is the only player that has the power and the resources to create a fair playing field for all of the players. Like, I mentioned before, judging which behavior is ethical or immoral can too close of a call, but creating incentives against behavior, which puts the whole society at risk, is something the government should take complete responsibility over.

I understand, that is work in progress and it will a long time before we have perfect system set, if that is going to happen ever at all. In the mean while, I believe it falls on the shoulders of ordinary citizens like you and I, to remember that just because it is legal does not always make it alright and that the true moral compass does not lie within the law, but it lies with our hearts and our consciousness.

We, human beings, like predictability and we resist to change. Predictability eliminates uncertainty, which in turn makes our lives comfortable and easy. Change, on the other hand, creates uncertainty and fear. Naturally, predictability and change has their own trade offs. Predictability costs us growth and change creates growth. Nothing in life is free.

The nature of life however is change and uncertainty.

Already, there is a conflict. We like predictable, life gives us uncertainty. So, we try to predict life and we try to predict and anticipate change. Throughout human history, we tried to come up with theories, which would predict the ever changing reality. In my opinion, we did not do such a good job at it.

In particular, I am going to discuss economics and finance. Each of those sciences are crucial to the development and prosperity of human life on earth. They both deal with resource allocation, distribution and use. More so, they both try to predict the future and eliminate uncertainty and risk as much possible from our lives. And that is great. However, there flaws, of which the costs are unknown.

Predictability requires structure. Reality is not structured. Yet, both economics and finance repeatedly provide us with theories that are very structured and rigid. They are not dynamic. One reason for that is because they rely on mathematics to prove their theories and observations. Mathematics is, for the most part, the structured and rigid science. That in itself, limits the kinds of assumptions the economists and financiers can make about the reality and resources around us.

That almost forces them to use theories that rely on unrealistic assumptions, which have no basis in reality. For example, the assumption that individuals are rational; or the assumption that we all behave in a uniform fashion. The list could go on. It almost seams that the most brilliant minds try to squeeze a dynamic reality in a structured theory and just come up with various assumptions to make their theories work and fit their mathematical models. And that is all fine, however, the problems begin when policies and laws are put into place, which rely on those unrealistic theories.

And that is a huge problem. If you base policies for a dynamic and ever changing life based on rigid and mathematically based theories, you are headed for a disaster.

The most recent financial crisis has showed us the true effect of that. Are markets self-regulating? Are humans rational? Do we all work in our own interest? Do we make the best decisions for us? Those are just some of the questions that economics and finance try to answer and come with theories to explain.

The worlds brightest minds make mistakes in the pursuit of predictability. But you don’t have to do that. Ultimately it comes down to thinking on your own and just looking around your own reality and deciding if the theories that you have come up with match what is going on.

It is alright to make assumptions, which simply things with a reasonable amount of error, however, beware of making assumptions, which not just simplify, but distort the very phenomenon you are trying to explain. Maybe, if we all just accepted that life is complex and dynamic and not predictable, but ever changing and in flux, we would be living in much different, better world.

The above question is much important and relevant than it has ever been. The issue of giving your power away might be the underlying cause of the current financial crisis. Let me explain.

Others have only as much power as we choose to give them. Your government, your boss, your girlfriend, your children, your co-workers, your friends, your enemies have only as much power as we choose to give them. In essence, power is about choice. Under normal circumstances, nobody can make you do anything against your will.

You can and should do things you enjoy, and shouldn’t do things that are against what you stand for. Yet, life is not that simple. Many people don’t know what they enjoy or what is good for them. There is a good reason for it. The life and information is complex and it takes time to understand it.

For example, you may know that you like strawberries, walks in the park, rock, and playing basketball. In situations concerning the above mentioned items, you should be able to make up your mind quickly and should state your preference. Yet, chances are any of the above activities are not going to have a huge impact in your life.

What about the following situations: do you buy or do you rent a house? is this really healthy? where should I invest? is this person/friend right for me? where should I go to school? All of the above situations represent really important, possibly life changing choices.

Suprizingly enough, it seems that the more important the decision the more people seem to give their power away and let others decide it. Others might  include your banker, your investment adviser, your friend, your parents, your mortgage originator, your doctor. These are the people that we call experts. They know, or should know what is going on.

So we trust them. We give our power away and let them decide what is best for us. The main reason is that the issues that your banker, doctor, etc seem to be dealing are so complex that we do not want to invest our time  in learning of what really is going on behind the scenes.

Yes, the so called experts might really know what is going on, but it does not mean that they will tell you or even want to tell you. It might be against their self-interest to do so. That creates information asymmetries, where the consumer knows less than the producer of the information.  That puts you in the tough spot, where you cannot really trust the experts.

In today’s world driven by profits, the conflicts of interest are plenty. The conflicts of interests is precisely what caused the financial crisis. That is why it is more important than ever to not blindly give your decision making power away. The best way to do that is to educate yourself about the issue at hand, so that you are confident about the decision that you are making.

After reading “Freefall” by Joseph Stiglitz, I realized that the prices of certain goods are way understated (some are grossly overstated).Price distortion is a serious issue, which has a huge effect on our consumption of goods. For example if diamonds where really cheap, everybody would probably have a pair. In essence, if prices are understated, it accelerates the consumption of a good and increases the rate of externalities.

I am talking about two types of goods in particular: nonrenewable resources and goods the result in negative externalities.

The first item is of utmost importance: nonrenewable resources such as oil, gas, coal, fresh water, etc. The underlying principle of economics is scarcity. People have unlimited needs and wants and there are only limited resources. To be exact, only some resources are limited, many of them are surprisingly almost limitless if managed right.

However, oil, gas, fresh water, coal and so existed in finite amount on Earth. They are non renewable in the relevant time frame. That is they will renew, but by the time do, people might not be around anymore. In essence, there is a fixed supply of nonrenewable resources.

Yet, the prices of today’s markets reflect prices that almost imply that nonrenewable resources are really renewable. Price is determined by the supply and demand forces in the market. The only problem is that they reflect only current equilibrium of demand and supply. The reality of nonrenewable resources is that the supply is constantly decreasing and the demand is constantly increasing. Moreover, the prices do not take into consideration the future demand of nonrenewable resources, which is bound to increase.

If the prices of nonrenewable resources where reflected correctly and would reflect the the future demand for goods and actually reflect their scarcity, the prices of oil, coal, and so on would spike dramatically severely limited the demand for those goods. Let us examine oil.

We already saw what happens when the oil prices go up. It actually turned out to be a pretty good thing. It sparked a wave of innovation of technology, reconsideration of people driving habits and a huge push towards research of “green resources”. However, the spike was not sustained and people seem to have gone about their business usual.

It is my view that the the real reflection of prices of nonrenewable resources would spark even further innovation, development of public transportation, more efficient, less energy consuming consumer goods, and would curb over consumption and would bring people back to reality of this world.

The next type of good I wanted to talk about is goods that result in negative externalities. Which means that the existence of certain services and goods cost to the society much more than it is perceived to be. Moreover, the companies and individuals that engage in those activities do not bear the full cost of their activities. For example, let us take a look at tobacco companies.

Producing cigarettes is very cheap. Yet, they produce a product that kills people in the form of cancer and other diseases. Yet, I am yet to see tobacco companies bear the full responsibility of their product and pay for cancer treatments and other hospital bills, which is an externality, which is not reflected in the price of cigarettes.

Sure, the state taxes tobacco companies, but where does that revenue go to? Does it go towards the treatment of the patience with cancer, which they got from smoking, which has been proven to be addictive and lethal on top of that? I do not think so. The state just keeps the money and does not spend it purposefully to treat the patients that need the most help.

If the full cost of the existence of tobacco companies were to be taken into the consideration, I doubt that those companies would be even able to exist. I think they would simply go bancrupt as the demand for cigareets would drop dramatically, or they just could not keep up with the actual cost of cigarettess, which would now include paying for the hospital bills of its users.

It only makes sense to me that companies that produce harmful products should be forced to bear the full cost of their activities. For example, if you buy a car and it breaks down because of a manufacturing defect, then the company is liable. Same thing should go for any other companies of which the use of their products results in costs to its users or matter of fact society as whole.

In conclusion, if prices reflected the actual demand and supply and actual costs of products, the world would be a better place to live.

Sometimes we just make the wrong decisions. Sometimes we become shortsighted and focus only at the things that are the most convenient and most pleasant at the moment. Some of us even confuse that with “being in the moment”. All of the above simply means that we are discomfort averse individuals.

We seek out pleasure and try to avoid discomfort. Inherently there is nothing wrong with that. However, if you look deeper into that all sorts of problems rise to the surface.

Seeking out pleasure and comfort while avoiding discomfort is a form of procrastination. Procrastination is like robbing yourself in the future. It is like taking a credit on your future and your goals and never really working to pay it off. It is like cheating yourself.

If we continuously borrow against our future, then eventually we will have to pay the price as we cannot postpone discomfort forever. More importantly, discomfort forces us to grow and change and progress. Comfort in a sense kills progress and joy of learning in life.

But the real question is why we act like that? One possible answer, as it is proposed by Joseph Stiglitz, is that we lack vision in our lives. We do not know where we are going, we never think of our or others future beyond today. Without vision, our values are useless. If we do not know where we are going, even the best compass in the world will not help us get there.

Without a vision our lives become bland and boring. We lose interest in life. Vision is not simply a goal to achieve. Vision is desire to change, it is a vision of positive change for yourself and those around you. If you do not have a vision to guide your life, your daily actions will lack direction, passion and drive.

But how do we “get” vision? I think it starts with curiosity and a  desire to overcome a challenge. Vision starts with a desire to become a positive role model for others. Visions starts with a desire to do good and change the world for the better. If we do nothing to contribute to the well being of others, then what is the purpose of us living on this earth?

No, we are not mean to merely exist on this planet. Our life only has meaning in the context of other individuals, human beings. Without others, there would be no reason for us to exist. Yet, over and over again, individualism is drilled into our heads.

Then we become so overly concerned with ourselves, that our life loses meaning because we forget that our life alone is meaningless. Others give meaning to our life. Maybe it is about time, for America and the world to stop focusing on individualism as much and promote social values that bind and bring people together as one unit.

Indeed house divided falls. But what happens when the house is divided into hundreds of millions of individual pieces? It is even surprising that some parts of the world have not fallen apart just yet.

Having a vision means being concerned not only for yourself but for those around you. Having a vision will cure you of the disease of the shortsightedness. It will help you make the right decisions, and stop robbing yourself and others of a bright future.

What is your vision? What is your drive?

Just recently, I started attending mixed martial arts class. It is truly amazing to learn the things your body can do. Mixed martial arts is all about teaching your body to do things it has never done before. At first it can be difficult, but over time, your learn how to do it the right way.

Probably the best advice I have heard regarding learning some thing new is summed up in the following short phrase: “Slow To Smooth To Fast”.

Whenever you are trying to learn something new, you brain will become confused. It will be doing things, it has never done before or making your body do things it has never done before. It can be quite challenging. But the secret is to just take things slow and learn to do them the right way. Proper execution and form are crucial.

If you do it slow and with proper technique, you will build a solid foundation upon which you will be able to build something amazing. If you start taking shortcuts, you will have a weak foundation, which will not support your dreams.

At first you will be choppy, and things will take you forever to finish. But the more you do it the right way, the faster your body will learn how to handle it. Over time, you will transform into smooth. Your movements might be slow, but they will be smooth and executed properly. Equipped with slow, smooth and proper execution, you will be ready to move on.

You will move to becoming faster. Speed will come with practice. With practice, you will master it and over time you will start asking yourself how could have ever not known how to do this.

Keep this in mind – Slow To Smooth To Fast – in anything you do. It does not matter if you are picking up a new subject at school, learning a new sport, a new instrument or whatever, remember the magic formula and never take shortcuts and you will be surprised how much faster you will get to where you want to go by taking things slow.

Did you ever think that there just a few real lessons to be learned in life? Just a few. No more no less, but a few simple lessons. No matter how many more of personal development books you are going to read, no matter how many articles that will promise you to change your life you are going to read, the messages that you will come across are going to be the same.

I realized and I was relieved and so should you. It simply means that you can cut out all the BS that you see on the market today and save yourself time and money. Today’s personal development, self-help, psychology, leadership and change market is filled with the same message that just packaged differently.

So I will share just a couple of things that I think are consistent across the board.

• Figure out what you want in life
• Go get it
• Be consistent
  
• Action beats inaction
• It’s been done before

That’s all that there is to it. Each of our own life has a purpose that we need to define. There is no right way to figure it out, so it means that you will not find the answer in any of the books. That answer will come from within. Once you figure out your purpose and what you want to do, what drives you; you go for it.

If you want to get there, you have to be consistent in your effort. Along the way, you might feel like giving up, but just keep going and you will discover other options along the way. At the very worst, if you are stuck and don’t know what to do, just do something. Any small action will help you move forward. It will give you a new stimulus and you will learn something new about yourself.

The last and not the least – it’s all been done before. Do not be afraid. No one road is more or less traveled that any other one. Your problems have been solved a thousand years ago, your goals have been accomplished by millions. Do not be afraid and just go for it.

After this, there is nothing much to it. I’ve tried, I’ve read books and watched movies and so on. But in the end, it all rests within you to have the life that you want to have. Learn those few important lessons in life and move into doing, into action instead of just infinite contemplation of infinite choices.

Today we are going to learn another rule of economics as it applies to your practical life. There exists a concept called the Law Of Diminishing Returns, which simple states that increased activity results in increasingly diminishing returns with each additional unit of input. If we were to graph, it would look something like this:

On the horizontal axis you would have any activity and on the vertical axis you would have a benefit derived from that activity.

In my undergraduate college days, I used to think that about the above law only in turns of economics: factories, production, etc. Often, I would not realize that this law applies to many, if not all of our every day activities and goals that we try to achieve in life.

Let’s take a further look.

For the longest the idea of that more is better was unchallenged. Only, recently the less is more philosophy emerged. Less is more is nothing else but the law of diminishing returns defined in very simple terms. To be exactly correct, the following statement is true: more is less, as illustrated by the graph above.

I was first introduced to the idea of less is more when I saw a video about choice on TED. The speaker said that too much choice leads to confusion, unhappiness and frustration. This part of the argument can demonstrated by the above graph as well. At a certain point the benefit derived from an activity starts to decrease. I guess, this should not strike anybody as great news, because we have always heard of people telling us that moderation is the best and that too much of anything is bad for us. Well, now you have a graph to prove it.

However, let us consider the simple and powerful implications of law of diminishing returns to our everyday lives. Let us a create a couple of graphs to together.

1. Put MONEY on horizontal axis and HAPPINESS on vertical axis. It becomes clear that at a certain point money does not bring in any extra happiness. Also, it implies that having too much money, can also decrease your overall happiness. I read about a study in the Art of Choosing, which said that people who earned $100,000 were just about as happy as those earning half of that amount. It went on further to say that the same holds true for individuals who earn over $5,000,000. Think about it.
2. Put STUFF on horizontal axis and sense of INDIVIDUALITY on the vertical axis. The same simple pattern repeats.
3. Put variety of FOOD/EXERCISE on horizontal axis and HEALTH on the vertical axis. Watch the same pattern unfold.
4. Put KNOWLEDGE on horizontal axis and UNDERSTANDING OF THE WORLD on the vertical axis. Same rules apply.
5. Put EXPERIENCE on horizontal axis and WISDOM on vertical axis. It also holds true.
6. Put amount of CHOICES on horizontal axis and HAPPINESS on vertical axis.

The examples could go on forever. The point is that any given activity increases a benefit only to a certain extent. After that, the benefit either rises very slowly or it even starts diminishing. Try out the above exercise for yourself and you will see how this holds true.

More importantly, what are further implications of the above graph? It means that there is an optimum amount of MONEY, STUFF, variety of FOOD/EXERCISE, KNOWLEDGE, EXPERIENCES, CHOICES which will cause a maximum overall benefit to us. Isn’t it amazing? To me, it is.

It limits the possibilities in this world. Well, how is that great, you might ask? Simple. We all have a limited amount of time to live on this earth and we want to optimize how we spend out time. Clearly, we cannot experience everything that this world has to offer. But, now I realized that there is no need to because of the relationship described in this paragraph. The only question that is left to answer is the following: “What is the right of amount of “activity” that we need to perform to obtain the maximum amount of “benefit”?

If we could figure that out, then we could easily know how much money we need, how much variety of food we need, how many and what type of experiences to seek, and how many choices we should offered to maintain the optimum amount of well-being. Armed with that knowledge we could truly simplify our lives and feel so overwhelmed to do more and more without realized if and how much extra benefit we are gaining from a given activity.

Even though the options and activities are endless, the way we react and experience life is limited. So who is up for the challenge to figure out how much and what type of activity we need to maintain and live the most enjoyable life possible?

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Image: gaspi*yourguide

This topic has been on my mind for the last few months. If I were to write it any other time before today, the article would have sounded just like anything else you have ever read before.It would have been about how one should not give away their power and how to make the choices for yourself. It would have been about the ability say “No!” to others as a way of maintaining control over your actions. It would have been about how control over your own actions can bring happiness to your life.

That is exactly the reason why I did not write anything.It is just more of the same old.It is everything everybody has heard before.

More importantly, it might be wrong.

There is nothing worse than misinformation that leads to false expectations, which result in unhappiness. Until today, I held a dare belief that the more control we have over our lives, the happier we are. I believed that we should make our own choices and decide our own destinies no matter what. I believed that until today. I thought that it was the only way to happiness. I believed and I was willing to say so to others.

Today, I realized how wrong I was.

That is exactly the reason why I want to share my newly found understand about control with the rest of you. The inspiration for my newly found knowledge comes from the book “The Art of Choosing”. As it turns out some people actually prefer not to have control over their lives. Yes, you heard it right. Some people prefer to have others make their decisions for them. What is even more interesting is that some people are even happier when they do not have to make decisions for themselves in many aspects of their life. That particular statement almost flipped my world upside down.

It possible once again that less is more and more is less? Is it another obvious truth that we have overlook in the Western societies?

We are lead to believe that more choice is better, that control over your life is good without even considering that fact that those statements are not absolute truths. It is almost like imposing a “one size fits all” approach to happiness. At first glance, it seems to make perfect sense. The more control you, the more choices you can make for yourself and therefore you can create the life that you really want. It does make perfect sense, but not to everybody.

That statement seems to ignore the fact that there are different people who might not want to be completely in control of their lives. It makes a basic premise that we all like control. However, it is not the case. As it turns out, depending on your childhood, your upbringing and your community you might prefer to have less control over your life and be just fine with it. Now, image being a person who prefers subconsciously to have less control in their life over their actions, but living in a society where control and personal choice are being forced down your throat. You might turn out to be very unhappy without even knowing why.

You might end up blaming yourself for being weird or different; and you might even go as far as to say that there is something wrong with you. Nevertheless, the society is just being inconsiderate of your differences. Being in control or not being in control of your own life is neither good nor bad. The old saying “To each his/her own” is as true as ever.

It is only my hope that this knowledge will help you understand others better and appreciate their differences more. It is my hope that you will think twice before imposing your own worldview onto others and realize that even some of the “truths” are just widely held beliefs that vary from culture to culture, country to country, town to town, and person to person.

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