Economics, Finance, Psychology and Marriage?!

whiddon-1.jpgI am always fascinated by the overlap of one field of study with another. Often, principles that apply in one field are wonderful illustrations that clarify those in another field. Dr. Gary S. Becker, a professor of Economics and Sociology at the University of Chicago, was recently interviewed by two investment advisers, Jim Whiddon and Lance Alston, on a local Dallas radio show called The Investing Revolution.  You can hear the whole interview by clicking here.  In the discussion of Human Capital he linked finance to psychology in a way that did not demean either but rather, enhanced areas of overlap.

Concerning happiness, he referred to “mean reduction” which says that happiness reverts back to the mean or average level, so we need more and more to make us happy. For example, we buy a large house with a beautiful view only to get used to it in a short time. Then we want to buy a bigger house with a better view to increase our level of happiness. Lance clarified that people and places last longer than things. So those who seek happiness in “things” are most likely to exhaust themsebecker_1.jpglves on the addictive treadmill of pursuing more things that quickly lose their charge. So from the point of view of an economist, investing in people provides happiness with staying power. This is good news for me, a former “loner” who now delights in connecting with people.

Dr. Becker even extended his principles to marriage, emphasizing how single people look for human qualities like education, compatible values, etc. in choosing a mate.   From a theological and psychological point of view, I can see some overlap of issues in what he would call supply/demand and resource/need.  While he was emphasizing the importance of including human factors in the otherwise impersonal aspects of the science and numbers of economics, I can see how we get into trouble when spouses treat the relationship like a commodity whose function is primarily a resource for personal happiness. Like a thing that has been purchased, it loses its “kick” and they say “this person doesn’t do it for me any more.” So, like a ballpoint pen that has “globbed up” they toss it and get a replacement that is smoother and more satisfying. What, then, is the key to a marriage that is long lasting as well as satisfying?  I’ll address my thoughts on this in my next blog post.

At Dr. Becker’s banquet speech, he said:

Economics surely does not provide a romantic vision of life. But the widespread poverty, misery, and crises in many parts of the world, much of it unnecessary, are strong reminders that understanding economic and social laws can make an enormous contribution to the welfare of people.

I think Dr. Becker’s perspective contributes a better understanding of why it’s important to invest in people more than things. Typically, an economic view of human relationships cheapens the strength of the relationship by mechanizing it and reducing it to gratifying payoff and return on investment. Dr. Becker seems to have done the opposite. He strengthens the economic perspective of life by humanizing it. The only dimension I would add would be the vertical relationship with our personal God out of which the fruit of joy and peace flow in abundance.

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