A general wandering of my mind led me to ask myself why we humans are usually so unsatisfied with life. Â I think it connects to the previous entry of my blog. When some of our needs are not satisfied, we try to hunt for them. And across all ladders of age, social and economic groups, people are essentially not satisfied. It is a human tendency to look at people above them, not the ones below them. So people tend to think more about what they do not have when they should be grateful for what they have.
It is quite a contrast to see two different people, each lacking what the other has, and hoping to have what he/she lacks, something like ‘envy’ principle in economics.
I am not suggesting that being satisfied with what one has shall lead to satiation and hence no struggle to climb up towards the ‘bliss point’ (which in itself is not stationary!). All I wish to contemplate on is why we should be sad over what we do not have, hence forgetting to appreciate our blessings.
I think the law of diminishing marginal utility can never be applied to human desires and emotions. Essentially, it tends to be increasing marginal utility. So, first you struggle to meet basic needs. When you have them, you want qualitative improvement in the same, you want money, more money, you want to be in the best of institute, you want to be the topper of the same, and you want the highest package. And along with this you also want to have better relations. Thus, it is not merely materialistic needs but also emotional needs that are insatiate. Life essentially turns out to be about ‘me and my needs’, an endless loop.
isn’t ceteris paribus a prerequisite for the law of diminishing marginal utility to hold true?
(it’s amazing what you can learn from 15 min of idling on wikipedia!)
what i think is that this law is not just applicable to, but forms the very basis of all human emotions.
let me explain.
i think in absolute layman terms, we can summarize this law in one word : ‘boredom’; when we have too much of something, we do not want anymore and consequently, its utility declines.
this is specially applicable to human needs. (not in general, but for a particular need).
this is the reason why marriages stagnate, people start taking each other for granted, the ‘magic’ of love fades away, that we get sick of almost anything, the examples are countless.
and i think this points to our highly developed intellect.
(see the contrast with a squirrel which can never get bored of eating nuts day after day, or a bull which can never get bored of turning round and round the same oiling pit.)
and i take a step forward to draw a rather bold conclusion from this thought,
that people who are obsessed with one thing eg. those who can only think about making money (so much so that they cannot even enjoy themselves with the money they make),
or scoring marks (so much so that scoring higher becomes an end in itself and learning takes a backseat) and never get bored from it are somehow at a lower intellectual level than our seemingly less ‘successful’ average joe !
i think they might be lacking some part of the cerebral cortex which prevents the utility of these things to diminish despite being excessively accumulated ……….
maybe i am oversimplifying things,maybe it seems a bit far-fetched,
but its an interesting thought anyway.
please do correct me if i have misunderstood this ‘law of diminishing marginal utility’
You are right that law of diminishing marginal utility holds while keeping other things constant.
In terms of human emotions, I do not think that diminishing MU really applies all the time. It is just that what has to survive (here, in terms of relationships), it will survive..more like Darwin’s theory!
And in fact, to somewhat mould my arguments in the entry, I would say that people essentially are not satisfied with what THEY have. There is some innate restlessness to have what you do not have at the moment, a capitalist like tendency with limited capital!
What you have said was an interesting insight. Boredom can force a person to create something which can keep him entertained until it seeps in again.
But from my own personal observations and experiences, I think ‘Greed’ and ‘Envy’ (which I think is fuelled by greed itself) are far more powerful factors beyond anything else to define the existence of human race as a whole. The circle of life is governed by them and I think the whole evolution of humanity is based on them too. I would explain it to you how it works.
Greed covers every aspect of life. Greed, to sound nice to ears, can be called ambition, drive, desire, urge, etc. but the root idea behind is the evil of the mind that always remain unsatisfied with what we have on our disposal. During my adolescent days, I used to dream of one universal nation and a world where everything has equal value. But sooner I realized that it is practically not possible.
Without currency and a governing body to decide the value of everything tangible, the world would be a big chaos party where we would shed our demeanor and resolve to our primitive instincts for survival. Call it the bane of our intellect, Man would always need something to look up to, to keep him going, to earn something envied and desired by his fellow kinsmen so that he could be respected & remembered and greed drives it. With every challenge he overcomes, his desire to become better would keep him extending the boundaries which he would overcome again and again. That is how we evolve with the day.
Talking about a world without boundaries would mean a ‘competition-free’ world. Where there won’t be a bully (US at present, Germany and USSR in the past to name a few) and a scapegoat, but one uniform self. Without competition, the standards will come down and there won’t be a stage to glorify and bloat about the achievements and excellence over the minnows. Envy I believe is second to greed in my personal list of the seven deadly sins . We all are lost so deep inside the web of our materialistic world that it has become an essential part of us. Our whole growth is injected by it.
To sum it up, what Riju, you have said is completely right, ‘It is a human tendency to look at people above them, not the ones below them. So people tend to think more about what they do not have when they should be grateful for what they have’. I call this greed and envy.
@Lovish: Thanks Lovish for your comment. I totally agree with you. Besides, you have nicely pointed out the general trade off between equity and growth.
Hi Riju,
Great blog!
I agree that the law of diminishing returns doesn’t really apply in this case…but don’t think wanting more of something implies unsatisfaction necessarily.
We all want more of something, but usually having more than our neighbor is good enough, as suggestede by the concept of relative happiness studied by behavioral economists. There is a cool speech by US federal reserve chairman, Ben Bernanke, on the economics of happiness which you might be interested in.
Here is the link:
http://www.federalreserve.gov/newsevents/speech/bernanke20100508a.htm
Maybe, you can blog your views on it!
take care,
Angad