Life can be Confusing

I have been forced to make heavy decisions about my future lately. I’m sure most of you have been as well as this school year comes to an end, whether you are graduating from or entering college, or really at any point in your life. Our decisions are influenced by too many factors to fully deconstruct. However, I would like to write briefly on the human equilibrium, or the nature of our actions at an individual and aggregate level (I should note that I use the term equilibrium both from an economic but also just general definition. Do not spend too much time searching for the exogenous and endogenous variables! )Generally when someone explains that they have broken free of conformity, or a similarly banal topic, I tune out. The reason many of our lives are similar is not because we are all sheep. The system works. We have one life. There are many ways to experiment. But over the centuries a safe and rewarding life has been to study, work, marry, have kids, and retire. Roughly in that order.

I’m going to define this as a type of equilibrium. There are constraints such as country, culture, technology, and others. However, within reason I’m considering this an equilibrium of contemporary human nature. If you want to have a life with a safe risk to reward ratio, I would suggest choosing this path. There are, of course, many variations on the theme. Some people experiment in college, some never marry or have kids, others spend a decade “finding themselves” (whatever that means), and others travel the world.

If we examine equilibrium human states more closely, we can ask ourselves questions as to why we have chosen to follow the norm. Following the norm might be the right choice, but I think it’s important to logically understand why rather than just submit to it being “right.” Consider garbage. Some people are naturally messy, some are naturally clean, and most are average. Generally the cleanliness or messiness of a person’s living space isn’t a function of its size. Whether we live in a mansion or in a small apartment, a person still makes the similar choice “would I rather live in clutter or expend energy to clean and sort my goods.” As a result a messy person can live in a messy mansion, and a clean person can live in a clean apartment. This is a more simple idea of recognizing how our lives and surroundings are often more of a function of our own personal equilibrium functions, rather than a function of our environment, than we might think. Yet people still firmly believe if only they had more space they would finally have somewhere to store all their junk.

A more applicable example is than most people strive to retire around a similar age despite there being vast differences between salaries earned. We accept that we want our standard of living in retirement to be a function of our earning and consumption during our working years. While people earn drastically different amounts of money working every job under the sun, generally the equilibrium function for how we want to live after retirement is similar. When I worked for an asset management firm creating retirement funds, we didn’t create different retirement funds for different levels of earners. A friend was telling me recently that someone she knew was planning on retiring at the age of 40. He was a successful software engineer and had started earning around 100k after college and was now at around 200k (let’s say 150k per year on average). I think it’s safe to say that this is an anomaly, but it isn’t that absurd of an idea. He has a wife and a child, and they have all lived rather frugally. Many people retire having only made minimum wage their entire life. I realize there are variables I haven’t accounted for here, but my general point is this man decided to adjust his utility function for his own life and according to his own preferences. He did not accept the typical equilibrium function for how to smooth consumption over your life through working and then retiring.

There are many logical reasons for the current retirement equilibrium. We tend to retire as we become less able to work due to old age. The cost of retirement drops dramatically as each additional year allows for more income as well as less need for future consumption, and therefore less need for savings now. Income tends to increase with experience as well, giving an incentive to continue working instead of taking an early retirement. These are all good reasons for following the standard model. I think that there is a feedback loop though. The majority of people share a similar function for retirement, thus creating an equilibrium. This is then accepted as proper societal or cultural practice and people begin to follow the general majority without taking time to consider and tweak their own personal preferences. My claim isn’t scientific, but it is not hard to imagine.

I am not a wedding historian and I’m sure I am missing the details. However, the idea of a wedding has been a constant topic of debate in society. There are some purported ‘logical’ reasons for why offering tax incentives and legally recognizing marriage is important. But it is hard to truly deconstruct one of those arguments without eventually falling back on traditional societal practices as being the more salient reason that the institution of marriage exists. Often those who change their equilibrium function for weddings–whether they do not want one or they want to get married to a member of the same sex–find themselves subject to scrutiny. Perhaps from the law or from their mother.

I am vigilant in questioning my own utility functions and not just substituting them with the general equilibrium of most people (more specifically, most people in my immediate demographic). It is often a good place to start, since these equilibriums are the aggregate choices of self-interested people making decisions to maximize their utility. But do not define yourself or your self-worth by what most people similar to you consider to be their own best utility-maximizing decision. You have sovereignty over your own utility function in life. Do not take the choices you make in your life and plug them into the equilibrium function held by society to see how you measure up. I have made personal choices lately for my life that were difficult because they differed from the expected path. I have been optimizing my life for my personal goals and interests in academia and research. These won’t necessarily get me a better job, and I am not doing them to have a better career and make more money.

Some demographics have tighter standard deviations around acceptable movement from the norm. And there are often consequences for going your own way. When it is time to hire a person for a job or accept a student into an academic program, despite what admissions says, conformity to the equilibrium choices of career and education functions is important. It is always safest to choose a person who has followed the path that is most traditional, since they are less likely to fail (although I would argue less likely to exponentially exceed expectations as well). Conformity is a sure bet. With unemployment high and university admissions increasingly competitive, there is no reason to take a chance. When you deviate from the equilibrium you open yourself up to be overlooked, or pressured back into taking the safe path, or discriminated against. There are strong reasons for taking credits. A university will ‘vouch’ for you, and give information on how you did relative to your peers. Right now I am studying math on my own. I am not receiving credits or grades. I just wanted to learn more math both for pleasure and to help me with some quantitative courses I will take soon. Even if I become well-educated in math, I will have to start over in low classes since I won’t have the prerequisites. This is a hassle, and certainly explains why most people demand credits, since they eventually want credit for having worked hard. But math is also beautiful. Learning and reading is rewarding. After a lifetime of studying for a grade, or for credits, or for a job, I imagine many graduates are sick. Tired of the tests and the race. Don’t forget education also helps you be a better person. Try it once. Try studying something you love without worrying about a test.

Be certain of the choices and way you view happiness and success in your life. Never just formulate your equation based on what others expect of you, or what your peers have chosen. This is difficult. It is more difficult than succeeding in a life that you never wanted.

Agree, disagree, debate, or comment

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