... so I probably look very unhappy as I am writing this, but I assure you that I'm not as unhappy as I look.
I'm an economics student. You probably know this. I'm fairly open about it and even if I haven't told you, you probably noticed by the way I refer to opportunity costs or utility functions or game theory in normal conversation and attempt to relate them back to everyday life. The problem that I have increasingly is that people always ask me for my views on the economy: how do we fix the recession? what policy changes would you make? and inevitably I have no idea. This bothers me for at least two reasons. The first is that it's not a good look to have almost finished an economics degree and then to appear to look like you have no view on the economy. The second is that I don't feel much self-actualisation by getting to the end of the degree and realising that I, or perhaps we collectively, know very little about economics.
A lot of different, but all very intelligent people have put forward their own views on how to run the economy. Adam Smith, Karl Marx, John Maynard Keynes, Milton Friedman and so on. People who don't know a lot about any of the people tend to pick one and follow what they say blindly, thus there are Marxists and Keynesians and monetarists all happily floating around making policy around the place. But the problem becomes once you've read them all, and read them all closely, that they're actually all quite convincing, but also that there are a lot of misconceptions about what each one has to say. Adam Smith's entire framework was pre-industrial revolution; Marx wanted free education and 'fiercely progressive' tax systems with a top tax rate of 25%; Keynes wanted the government to spend money to stimulate the economy by injecting it into necessary spending which the private sector would not undertake; Friedman didn't hate poor people, but rather he believed that the economy should be designed such that those on welfare should be treated as the exception rather than the rule. None of them has completely unreasonable ideas, and as you start to know more about what each is saying, and know enough to know what the positives and negatives are of each approach, coming to a 'correct' conclusion becomes more an exercise in skills of argumentation than a weighing up of the merits of each approach. I think that I have thought about this too much and the lines have become a bit blurred. People with clear cut opinions are often underinformed.
The title of this blog is also a reference to an economic concept. In perfectly competitive markets, participants have perfect (complete) information and this allows them to make optimal choices in their situations. I named this blog 'imperfect information' in an attempt to rationalise ex post why I felt so terrible at the end of last year. The reason, I rationalised, was that I had been lied to (both the act and the omission). Had I been told the truth, then perhaps I would have made optimal choices in the situation that I was put in.
The problem with that analysis is that it assumes that I am the paradigmatic rational consumer upon which economic theory is based. I'm not. Looking back on it, had I been given perfect information, I probably would have made different bad choices. This is because, even though I put on a facade of being rational and emotionally unaffected, people who know me know that that's not the truth. Because the truth is that nothing hurts more than when you put yourself out there for someone, and they turn around and say "ok; I've seen what you have to offer, but I think I'm fine without you."
Not to worry. I don't think perfect information is even possible. Everyone puts on a facade. We're all trying to impress other people with our confidence and looks and wit that we don't tell them about the fact that we're secretly freaking out about all our study/work/personal insecurities. Not that I blame anyone; I probably do it too. It's just annoying because, as someone who tries to be honest all the time, I tend to assume that others are doing the same. I think this is why I'm unnecessarily starstruck by some people around me when I shouldn't be, and feel bad about myself for lacking these qualities which others don't even have. More suboptimal decisions.
So I think I'll just have to learn to deal with imperfect information. Given that, even if I did act rationally, my decisions would probably be suboptimal, I guess it wouldn't hurt to be a bit more irrational for now.
