Potty Talk: Economics

Economists have won a noble peace prize for observing our everyday behavior, giving it definitions, and making assumptions why we act a certain way. These assumptions turn into theories and then are extrapolated to explain the world. They then get the awards.

Let me give you an example of a theory that helped guys sell books and get awards.

Rational choice theory - taken from wikipedia

Rational choice theory then assumes that an individual has preferences among the available choice alternatives that allow them to state which option they prefer. These preferences are assumed to be complete (the person can always say which of two alternatives they consider preferable or that neither is preferred to the other) and transitive (if option A is preferred over option B and option B is preferred over option C, then A is preferred over C). The rational agent is assumed to take account of available information, probabilities of events, and potential costs and benefits in determining preferences, and to act consistently in choosing the self-determined best choice of action.

Rationality is widely used as an assumption of the behavior of individuals in microeconomic models and analyses and appears in almost all economics textbook treatments of human decision-making. It is also used in political science,^[2] sociology,^[3] and philosophy. A particular version of rationality is instrumental rationality, which involves seeking the most cost-effective means to achieve a specific goal without reflecting on the worthiness of that goal. Gary Becker was an early proponent of applying rational actor models more widely.^[4]Becker won the 1992 Nobel Memorial Prize in Economic Sciences for his studies of discrimination, crime, and human capital.^[5]

There are probably well over 500 people that work on my floor at work. Lets call it 800. Of that about 2/3 are male. Rounding we are at 533 males. On any given day lets say that 10% are out of the office. So that leaves us with about 480 men in the office on any given workday. 

There are a total of seven bathroom stalls on our floor. Lets do the math. (480 / 7 ) = ~69. For every toilet there are 69 men that could be using it. Do you see a problem with this? What would the rational individual do? That is a terrible ratio. 

There are four levels to the building I work in, but the only other floor for me to go on is the lobby floor. It has a bathroom, but its down a few levels. There are other businesses in my building. These employ other people and accordingly, the other floors offer necessary amenities. 

There have been numerous times that I have gone to every single restroom on my floor with no luck. So what does a rational person do? They go down a level. The only problem herein lies is when someone sees you. 

It was just another day at the office and I went down a level to use the restroom. No one was in the restroom I was using and it was clean. (I must say that the people I work with are savages. I won't go into details, but I have found cleaner bathrooms at a ball park than at work.) I was headed back upstairs when a person who works on the floor beneath mine passed me. They had seen where I had come from and where I was going.

"Hey, what are you doing on this floor?"

"Nothing. Just used the bathroom." I was a bit nervous to respond as the person seemed agitated. 

"You have your own bathrooms upstairs, don't you? You shouldn't be using ours! I outta report you." 

"Well, flip. You don't need to make a big stink out of it."

Some interesting findings on public restrooms here.

Business, what is the point?

There is a fundamental argument of what the purpose, the end goal, of what business should be. Milton Friedman, a world renowned economist, said, "The social responsibility of business is to increase its profits," he also said that corporate executives have no other responsibility than to "make as much money for their stockholders as possible." Milton believed that ethics would lead people to do the right thing, a laissez-faire market would self-regulate, and the citizens of that country would be taken care of because of the spill over from job creation and wealth.



This idea is not new. Adam Smith argued, in his legendary book, The Wealth of Nations, "in consequence of the division of labour... in a well-governed society, that universal opulence which extends itself to the lowest ranks of people." More or less, the more specialized and advanced the country is, the better off the citizens of that country will be. The poor here in the States have a much better life than those in say, Haiti, they are afforded with better clothing, food, shelter, etc.

Not long after Smith, people started to expand across America and the industrial revolution was taking off in Europe and America. This was a time of great innovation and progress, at the heavy cost of wasteful use of the earth and loss of lives. Product waste was dumped in rivers and lakes. Pollution was a norm for profitable business practices.

During the 1980's financial instruments and investments changed the way people did business. It was a fast growing time. In the 1987 movie Wall Street, Michael Douglas plays the fictional character of Gordon Gekko, a successful and power hungry stockbroker. The video below illustrates the attitude that America held.




This attitude, money is ALL that matters, had not really been challenged until the 1990's, when unethical behavior and environmental calamities came to forefront of the publics eye, until we had to face the facts - business is more than just profits. Regulation had just pushed large corporations overseas, who would rather pay a lesser cost than being accountable.

Business leads the way for mankind, it is more mobile, efficient, innovative, and productive than the government. Government policies and decisions are often born from the business world, and there are considerably more people involved in business than the government. The upcoming generation is much more conscious of their carbon footprint. Corporations have seen that, and for reputable purposes or genuine care, they have altered their approach.

Take for instance Starbucks mission statement: "to inspire and nurture the human spirit - one person, one cup and neighborhood at a time." Pretty lofty goal for a company that sells coffee. However, they are serious by creating many initiatives, from recycling to clean water projects (they offer their score card and reports since 2001). Another initiative is that Starbucks has vowed to only buy their coffee beans that are wholly part of fair trade (fair trade is ethical treatment of everyone within the supply chain, from farmer to distributor, everyone gets a fair price, working conditions, etc.) to ensure that these domestic and foreign markets are better off in their communities.

There are other companies that are doing similar things (Microsoft, Merk and Co, People Water, Toms, among many more) and it has made the world a better place. Small businesses to large corporations should not be given a pass on making ethical decisions. We need to demand from ourselves and others a sense of accountability, to give back to the future that will follow us. There is a better way to make a profit.

Impact Investing.



In Africa


EcoScraps (BYU alum). You can find them in Costco and Home Depot, from Utah to Hawaii.


In India

Welcome to hell: day one

I made a reminder in my phone about this day several weeks ago. Selling alarms. In just four hours of knocking doors I had this thought, "there has to be an easier way." I waited for some kind of intuition, but nothing came. No moment of zen, enlightenment, or epiphany. I realized that I have no set of skills or ingenuity, as of now, that would provide any substantial monetary compensation. That was a sad moment. But this for a season and for a reason.

I am sacrificing now for the late. Money is the tool of liberation and freedom (or of captivity). These are my reasonings. As contrived as they may be, I have to believe in this decree. I have to buy into a world where your intrinsic worth and manhood is determined by the amount of accounts you sell. Its a crass and racial world. A world that I would rather not be apart of. There are some bright spots. I am in a beautiful place. I get to work on my communication skills. I will get a sweet farmers tan. Hopefully some beach time will cure that. I don't have to study for anything. Life is relatively simpler. Sure, there are some positives. But obviously not that many, mostly because I am blogging.

Bums... they've got it all wrong.

You and I are blessed. We are blessed to be healthy. We are blessed to not be on the street. But mostly, we are lucky to have polite bums. Of course you feel bad as you walk/drive past them, as they are holding their crude looking cardboard sign; but it's not feasible to help all of them (or is it? Another topic for another person to debate). I think we have all overlooked these outcasts and should appreciate their courtesy for us. Cause if I was a bum, I would be all up in your face.

Bum Dave would be so confrontational, aggressive, and assertive it would make your head spin. You think I would kick it on the corner, holding a sign? Hell nah. I would exploit my situation. What do people already think when they see a homeless person? People are not thinking, oh that is sad. I wonder how they got there. How could I help them? They are thinking, that person is a crack baby and is probably crazy. Don't make eye contact, do no make eye contact, do not make eye contact.... I would use that stigma to my utility. I would be that cracked-out-crazy.

I would go into a McDonald's and say, "Hey, you make minimum wage. I ain't about to trouble you if you help me out. I know you got some apple pies. You give me two of those and a burger, I will be out of your hair. Promise. If you don't.....[pause].... I will be upset." That is when I give them a crazy look. If they decline my negotiations, I raise my tone, just enough to know that I am for real. Not prison shank real, but I-will-come-behind-the-counter real. If they decline again, I elevate my voice and my craziness. "I got problems MAN. You don't need any PROBLEMS do you?! Help me out." If they threaten to call the cops - I just equal them, get closer to them. Make them feel my presence, make it uncomfortable. You could do this in a variety of situations. People in a restaurant. Grocery store (I would dumpster dive as well.). Just in your face tactics.

I just wonder why this doesn't happen more often. Bums are considered people who are on 'life's edge,' yet they are begging. If I was on life's edge, I would be pulling you down to pull me back up - example: people drowning. I would not be asking to survive or be warm, I would demand it, just like a toddler. There is no illegality in being a jerk in asking. Cops can't throw you away that.

Other than that I guess I could do stunts for people, sell some organs, or do bum fights for money. And yes, those are my only options if was homeless. Because if that happens to me, I deserve to be on the street. I have way too many resources around me to be a screw up or without a home/job/family/happiness.

And I would be a bum in a cool place, like California. Eff the cold.

AAPL

Apple is going for just over $600 dollars a share. It has about $93 billion in cash. And the company doesn't seem to be slowing down. People just love Apple shit (Americans love to buy stupid stuff too). They love the nice looking gadgets. They love the fancy things they can do with with their fat fingers. But mostly, people love to be cool. So do I. I would buy an Apple car if I could afford it. I can't wait for them to start making toasters. Holy smokes! They actually could re-invent the wheel. Wait-- Walker Wood has already done that. 

I bought an iPhone, to be cool. And guess what, I feel way better having this iPhone than when I was wearing JINCO jeans. The poor can now have a decent status symbol. Can't wait to sell alarms so I can buy myself MacPro. Then an Apple TV. Then an Apple bathtub. DIE DROID, DIE!

Political poker

I had a conversation with a friend recently....
"-" denotes what I said. "=" denotes what he said. 

= The government is shutting down this Friday. Can you believe it?

- Really? I didn't know that.

= Oh yeah, every government job is getting shut down. I just don't see why they can't print more money!

- Because that will cause... (cuts me off).

= Inflation I know. Whatever that means. It doesn't make sense to me.

-Well, if you print more money the monetary value decreases. It becomes less valuable. The more scare the resource, in our case money, the more it is worth. Just like pearls, or gold.

= Yeah, they should just print more money.


First of all, how did I not know that the gov't was shutting down? I feel just as ignorant as him, who hasn't taken an economic class or really wants to. But then again, why wasn't this mentioned in any of my classes? Not a big deal?

Feel free to chime in Burke, on inflation. You did go toe to toe with Baker right?