The Causation and Correlation of Love.

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As I write this I am 27 years old and it is a long period to observe patterns. One of the most prominent patterns I have observed to date  is our weakness towards familiarity. We are all so vulnerable to things, people, or events we are familiar with that anything even in close proximity to this familiarity is easy for us to accept. Similarly, when we come across something/someone we are unfamiliar with it throws us out of our comfort zone; be it that new girl with peculiar mannerisms, or the mysterious looking man at the corner of the street, a new fragrance, or a new taste. Having said that; most of us often make a conscious decision in leaving our comfort zone. There is a certain thrill in being acquainted with that unfamiliarity; that feeling of restlessness and those spine chills. I heard many call this feeling as being in love.

I don’t particularly have a problem with this definition of love or the very feeling of falling in love. In my head falling in love is a spiritual experience which gives you both the freedom and authority over another person. It allows you to truly live in union with someone; more so mentally. Love in my head is so powerful and magnificent that reality always fails to match my expectations. Love is such a strong emotion yet so easily misunderstood. The slightest comforting act from another person makes us want to believe in a potentially long term relationship. And our highly educated brains conveniently gets delusional and fails in differentiating between what is meant to be temporary or permanent. Most of us end up exchanging vows with someone we have no compatibility with just on the basis of what was once a promising lie. We get so engrossed in our metaphorical world that when reality hits hard we are in denial to accept it. It is  that same peculiar mannerism, mysteriousness, or the old fragrance that now becomes the enemy. Why is it then in-spite of all the signs and the patterns we still consciously make or even worse repeat our choices. There are many explanations to this; they say your judgment impairs when you fall in love. That is why I believe in Economics.

One of the foundation principles of economic analysis is the theory of Causation vs Correlation. According to which any study’s outcome can be misinterpreted if the causation is confused with the correlation. Example: you might think that College X is good because many successful people have graduated from there : this is the Correlation. The Causation is : because the students worked hard – they graduated – and it so happened to be College X. Economists urge for analysts to base their outcomes on the causation but not correlation. If we base our analysis on the correlation then that’s great for the college; good marketing; more students; more funds. However, as a student or a parent if you pay attention to the causation you will then know that irrespective of the college you go to they are ought to be successful. Keeping all other factors constant.

Now compare the whole phenomena of falling in love with the above theory. Do we really fall in love with the right person, or, is the person right because we fall in love with them? Do we love our parents because we are born to them, or, because we are born to them are we obligated to love them? In my opinion, when people become weak and helpless and find it hard to move out of a relationship; and take all the heart ache to hold on to the person and glue the relationship together they are clearly confusing their “love” for this person; a correlation smoked by their memories together with the actual causation which is just their need for emotional dependence. There is a clear distinguish between science and the matters of the heart. The latter will always triumph over the former; since there is nothing else to explain it (excerpts from Tagore). Having said that; the next time you begin to live in retrospect and question all the wrong choices you made; you know you just have to differentiate between what caused it versus what you correlated it to. If the poets don’t help give the Economists a chance.

#causation, #economics, #love

The Economic Alchemist

Oxygen Volume 14

We humans are undoubtedly the most restless, anxious, unreasonably paranoid earthlings today.  This is both a boon and a curse. If we are to accept life the way it comes and settle down to believing what we receive is what we deserve; versus, quenching the thirst for finding answers; would we ever improvise? Most likely we would not. On the contrary, will the questions ever end? and will we ever be satisfied by the answers? Irrespective of the magnitude of intellect we collect there is still a void within each one of us that is hard to fill. Fortunately, few of us have the ability to recognize that void while the others are happy in their ignorance. In many ways economics is not only a mathematical approach to solve this dismal way of living but is also an intuitive approach to bring order to the chaos. Reference the water-diamond paradox; we all know that water is more important to us than diamonds, yet we pay a fortune to owe the latter. The demand and supply curve of both the commodities clearly determine the desire to owe the latter over the former. Similarly, answers to what make us question our belief system and our true purpose of existence is scarce and the distractions are plenty. Making the distractions a mere necessity and the tools to self actualization a desirable commodity. A commodity so highly thought about, that even Maslow had to put it on the higher tier of the pyramid. Imagine a world where we can bring down self actualization to the most basic need. A world where we can breakeven between hope and reality; integrity and competition; and above all love and ownership. A world with no barriers, where no tariffs apply on exchanging ideas, and where dreams are not taxed. An economic free trade zone for human interactions. We can create this world by suppressing the fear to question and paraphrasing all the answers the universe offers in its infinite ways. It is easy to create a world where commodities are given their real value and not valued on the basis of their perceived worth. Just like any other creation this world needs a creator too. There is a creator in each one of us hiding behind the sheets comfortably tuck in its own bubble of assumptions and social dogma. The creation in its entirety is whole only when it surpasses the creators inception. Just like any other creation this world will need a welder too. Having said that, the question now becomes – are you ready to be the Alchemist?

#economics, #lifestyle, #thealchemist

The opportunity cost of decisions

If you have taken an economics class the “opportunity cost” (OC) might sound familiar to you. If not, in simple words it is the cost of not choosing something because of another choice that was made. For example, you have ten dollars with which you can either go to the nearest bakery to have a good meal or you can go to the dollar store and buy enough groceries for the week. The OC of choosing the bakery would be the amount you could save on food for the week by going to the groceries. The OC of choosing the groceries would be missing out on the yummy meal in the bakery with a nice ambience and probably meeting new people which is tough to be evaluated in nominal value alone.

Every decision we make has a concurrent OC to it, be it decisions at work or in our relationships. Why is it that it is so easy for few of us to say good bye while for few others the very thought of it is stressful. Over the years I met many people of which few I couldn’t wait to say bye, few I chose over another, and few I have taken along. No matter what the situation is I have always been able to weight the OC to help me make a decision. How is one to weigh the OC when the subjects in context are people? Think of how you would make a decision as to which equity you want to invest in. There are a lot of factors that we consider, from the historic patterns to the potential spike in the select equity’s price. Similarly, one can evaluate the OC of making a decision about a person by taking into account events from the past, change in circumstances, and the potential repetition of certain events.

This is applicable to work as well. From my experience in shared services I have noticed that a lot of our employees have proven to be more productive and efficient when asked to individually contribute with a well defined work list and timeline rather than when asked to work with groups or in teams. This efficiency does not come from just working alone but from the creative freedom they experience by not being influenced by anothers ideas or dominance.

Having said that, if it is so easy to make decisions based on the outcomes of the OC evaluations, why is it that most of us still live in so much regret and discontent. Probably because we judge ourselves more than anyone else would. We doubt our capabilities and limit ourselves from exploring the extent of our caliber. Although, we have companionship and confidants, aren’t we all isolated in some or the other way? In thoughts if not skin. At what point do we then stop depending on others and start living for ourselves. How much longer before we realize that the opportunity cost of not doing what we really want to and believe in is way greater than following the proven norms.

Most of us fail to make decisions that we really want to, instead choose to do what is right. Often our perception of what is right is influenced by somebody’s opinion and suggestions. Although, we live in times where there is easy accessibility to infinite amount of resources to help us do whatever we want to, yet we are unable to make decisions without having to consult. On the surface we are very independent and self sustainable though deep within we have grown to become parasitic. So spoiled by help readily available we have stopped making decisions by our own and end up landing in an ocean of regrets,self pity, and melancholy. However, it is never too late to stop being so dependent and to take the first step towards being true to ourselves. Yes, there will be a lot of questions but the answers will flow naturally.  It is never too late to stop judging ourselves and start complimenting our flaws. There is nothing unique about what seems to be right yet there can always be something unique and right about what seems to be wrong.

One of these days try making a decision by weighing out the opportunity cost of what you truly believe in. One of these days try living with no regret and make a bold move. One of these days try applying a little economics to your life.

#decisions, #economics, #influence, #life, #opportunitycost

India: The fastest growing country in the world – or not?

rupee-casinosGrowing up in a family of accountants, I learned the word tax before cartoons, played monopoly more than snakes and ladders, and watched the news channels more than regional serials. Just like millions of other women, I grew up as a daddy’s girl (still am), everything he did was of utmost importance to me. I wanted to walk like him, talk smart like him and even watch the same shows he did. While January is New Year for rest of the world, we wait until March. The Indian Budget has always been the most intriguing, entertaining and important reality show for my father and I.

Although, I got older and do not follow as much current affairs as my father would like me to, the budget is something I never miss. Not because I am a commerce student, but, because I am a stakeholder of the country, and every decision made, every bill passed, and every reform introduced during the budget has a major impact on me.

I follow the budget from multiple sources, but, ET now is my favorite. If you know me well, you probably know that I am a big Arnab Goswami fan. Yes, he is over the top, contradicts his statements, and can get very annoying at times. Having said that, the TRPs and countless excellence in journalism awards he received, cannot be ignored. Most of the content on this blog is from the big budget debate on ET now.

In business school, most of the times we discuss about how India is a probable threat to most of the current super powers and why not, we are the only fastest growing country in the world, with a growth rate of 7%, we are growing faster than China (yeaiy!)

Now that we rejoiced at that, it is important to acknowledge the fact that India has also been witnessing a major low in industrial production, with very little movement in manufacturing. This past period the ruling government has experience tremendous fortune because of the fall in the crude prices, however, the big question remains – why did you and I not benefit from it? Ignoring the fact that the consumers have not reaped any benefit, what raises eyebrows further up is the fact that the excise duty has been increased to an extent that, the ruling government earned an extra 17K Cr on increased excise duty!

In the governments defense against the increase in the excise duty, evidence have been put forth that the additional revenue earned is being invested into the crop insurance, social security scheme and other on-going projects to satisfy the per capita farming deficit of 47K Rupees per person.

Although, automation has been a boost to the countries intellectual property, it is also one of the biggest contributors towards the current 14.5% rate of un-employment among skilled ITES trained candidates. With about 12-14 million annually getting ready for the workforce – is the government putting enough efforts to meet the goal of creating an additional 119 million jobs in 24 sectors by 2022?

Okay, even if we consider the efforts being put into clearing the farming deficit, how about the other rural assets that has potential employment opportunities? How about dis-investing the capital assets to invest into higher education, low cost housing, irrigation and other public sector jobs?

The probabilities are endless, but again, the ruling party has time to prove its worth, yes, it is an old country, with bureaucracy over powering democracy, sentiments over powering economics and yes “acche din” is a process, but, as stakeholders when are we going to get our share of the pie?

Like Arnab said – the opportunity is not lost, threat persists, understand strengths and be aware of weaknesses. Perhaps, a little patience and lot of capital and FDI later, we shall all witness a better story, until then, pay your taxes in time.

#2016, #budget, #economics, #india