What Economics Class has Taught Me About Life in Just Two Short Weeks

So I’m a couple weeks into my first (in about six years) semester of full time student-hood…which should just about explain my relative absence from Blogworld.
This semester and the next will be spent checking a couple pre-requisites and some general education requirements off the list before applying to nursing school in the spring. One of the general education classes I’m taking is Introduction to Global Economy. I’ve never taken an economics class so this is something totally new and different for me.
Also something I am extremely unlikely to use in my (hopefully) future career as a nurse.
But isn’t that the point of gen ed classes:
To make you waste time and money learning completely irrelevant things just to forget them as soon as you pass the class a well rounded student and human being?
Honestly when I picked Global Economy I did think it sounded interesting. Plus it looked less painful than some of the other choices.
At this point, just over two weeks into the semester, I have been pleasantly surprised to have actually gleaned relevant concepts from this class, two to be exact.
So without further ado, here is what Economics has taught me about life so far:

Sunk Cost
Basically sunk cost is the investment you’ve made in something that you will never get back.
The time, the energy, the resources, the money, whatever that is already spent.
An example the professor used in class was tuition. He said once the drop/refund date has past for a class you cannot get the money paid for it back, it’s gone for good. Adios. Never to be seen again.
It’s a sunk cost.
Simple enough.
But then the professor went on to ask the class this: if you had been in a relationship for five years and the first three were great, “Heaven on Earth” he says, but the last two were terrible, “a living Hell”, would the time spent in the relationship influence your decision as to whether you’d stay in or leave the relationship?
Instinctively you want to say yes, the five years you’ve invested in this relationship should influence your decision. It’s five years…of your life.
“NO!” says the professor.
No, the five years is something you can never get back no matter what you do. It’s a sunk cost.
Sunk costs should not factor into the cost/benefit analysis that is decision making.
They do not matter.
That’s right the past does not matter. It’s done, make like Elsa and Let it Go.
(I apologize for the Frozen reference.)
It sounds pretty straight forward & simple.
You can’t change it, you can’t get it back, therefore it’s not a factor.
It shouldn’t influence the future.
But here’s the thing, we want it to matter.
We want the time we spent trying to make that relationship work even when it was in the crapper to mean something, to have been worthwhile. So we stay & try harder. We keep ourselves in a bad situation because we think the past matters, that somehow the time already spent will change the future. It won’t.
The past doesn’t matter.
No matter how much you want your past to pay off, it’s already done and gone, dwelling on it, carrying it around with you, won’t make the future better.
The past should not impact decisions about the future.
Of course it’s not always cut and dry like that but, still, such a profoundly applicable concept.

The second life lesson from Economics can be summed up in this phrase: You have to adapt to survive; when the game isn’t working for you find a way to change the rules of the game.
Yes I know, adapting to survive is not a new concept but hearing it again and in a different context made me think more about it. I’ve done my fair share of adapting, of doing whatever I need to do to survive and to make my life and, more importantly, my kids’ lives better.
But I never really thought about changing the “rules of the game”, finding an unexpected way to work outside the pre constructed boundaries. Instead of struggling to make life work within the confines of a system maybe sometimes we need to change the system and find a better way to make life work. Business do this all the time, it’s called innovation.
Why not apply it to our personal and family lives? When your life isn’t working find a way to shake things up. Change the rules of the game to make it work for you.

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About nights7

A metamorphosis in progress...always.

One thought on “What Economics Class has Taught Me About Life in Just Two Short Weeks

  1. […] I should probably make it worth while and keep going (I totally ignored the economic concept of sunk cost […]

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