Economic Wisdom to Apply in Your Twenties

Chapter 3 Prologue
Section 2 of the prologue uses the rationality of "economic man" to look at life outside the ivory tower

When you are in your twenties, you step out of the campus and start to integrate into this complicated society. There are more and more questions to think about:

Why is the country's macroeconomy closely related to each of us?
Why is the money in our pockets always being cheated by merchants' tricks?

Why is it that the earning is not too small, but "money earns money every month"?
Why is it so hard to be in the workplace but always unsatisfactory?

Why is ideal pure love always hard to find?

……

If you know economics, maybe you won’t have so many problems—it doesn’t mean that you have studied obscure economics majors in college, but you know the common sense of economics based on reality.

We in our twenties have just stepped out of the ivory tower and are new to the complex realities beyond campus.At this time, we need to use the perspective and methods of economics to help us think about and analyze problems, so that everything can be presented in front of us in a more essential and real way.As economists have always insisted, treating all problems with reason will make us understand life more "wisely".

Those who have a little understanding of economics should know the most fundamental assumption of economics - rational economic man.The rational economic man is also called the "economic man hypothesis", which assumes that people's thinking and behavior are rational in purpose, and the only economic benefit they try to obtain is the maximization of material compensation.

As Adam Smith, the father of economics, said in "The Wealth of Nations": "The food and drink we need every day are not from the favor of the butcher, the brewer and the baker, but from their own interests. We don’t say things that arouse their altruism, but we say things that arouse their self-interest, we don’t say what we need, but what is good for them.” In the eyes of economists, living people with thousands of differences are all Rational Homo Econ—a rational person who relentlessly pursues his own maximum satisfaction.

Economists have a unique way of thinking and explaining things, and they always have the ability to establish order in chaos.Take the example of a car passing by.An imported sports car quickly passed by the corner of the eye. Physicists pay attention to whether the internal design of this car conforms to engineering principles. Sociologists pay attention to the social status of the owner of the sports car. Psychologists associate the owner of the car with the fiery red exterior color. You may be enthusiastic and unrestrained, but lack inner security.Economists are concerned with the motivation of buying a car, the theory of demand, whether the owner of the car has maximized utility, and many factors that affect utility, such as the price of the car, the fuel rate of the car, the selling price of other models, etc. .

Undoubtedly, an economist is a rational person, and his analysis and judgment are all based on rationality.As the British economist Keynes said, the theory of economics does not provide a complete set of theories that can be used. What economics can offer is a new perspective of thinking about problems and a new attempt.It is not a dogma, but a method, an organ of the mind, a skill of thinking, which helps those who possess it to derive correct theories.

Admittedly, economics’ analysis of life may not always be correct, let alone be the only correct one.This is not only because economics is a subject that is still developing, but also because our knowledge and experience of life are limited.In our twenties, we are not deeply involved in the world. In the future, economics will continue to develop, and we will continue to grow under the rational guidance of economics, and we will have a deeper and more objective understanding of things.

What are you waiting for?Hurry up and join us, take the magic express of economics together, and start the "rational" life journey of economics!

(End of this chapter)