Tag Archives: real vs. possible

Mastering Living

I am currently writing a book entitled Ordinary Magic: Mastering the Art of Living. From time to time I will post excerpts. This is the first, from the final section of the book.

We live our lives in the context of our circumstances. Mastering the art of living involves recognizing, acknowledging and coming into harmony with your circumstances – and changing them where possible to suit you better. We have already explored in depth the ordinary magic of doing that.

But circumstances are only part – indeed, the smaller part – of life. How you live your life in the circumstances you are in essentially determines what your experience of life is. The key is mastering, not life, but living.

Consider: Continue reading Mastering Living

Ultimate Satisfaction and Therapy

This is the tenth and final post in a series on Worlds, as understood by Descriptive Psychologists.

Pathologies of ultimate satisfaction suggest a somewhat different orientation to therapy. This final post in the Worlds series will touch briefly on some aspects of this orientation.

First, some disclaimers:

  1. Not all pathology is connected to ultimate satisfaction. Many persons who seek and benefit from therapy experience living in a world that makes sense to them, and they find themselves significantly restricted in their ability to participate in that world.
  2. I am not proposing a new school or approach to therapy. To the extent these thoughts have any utility at all, they very likely will be useful to seasoned therapists from a broad variety of approaches.
  3. You do not need to be a therapist to find these thoughts useful and applicable.
  4. Each thought is stated and briefly expanded; they are meant to be evocative, not complete. A thorough exploration would require at least a very long paper or a short book.

Continue reading Ultimate Satisfaction and Therapy

Aftermath Part II: Living in a Radically Changed World

Remember when radical change was a rare phenomenon? When you could go for years, even decades, without something happening to make you realize the world you are living in is radically different than you thought it was? Whatever else has happened, the pace of finding ourselves required to reexamine our worlds has radically accelerated – and there’s no reason to believe it will slow down anytime soon.

The Boston bombings are fresh on all our minds – too fresh to be useful as examples. I do not intend to offer suggestions for what help looks like for the Boston victims (my friend and fellow Descriptive Psychologist Wynn Schwartz was on the scene and has offered considerable insight into what people have gone through in his blog); nor will I try here to understand why the bombings occurred (I posted an extensive paper on such matters last year called “When Worlds Collide”.) Instead I want to return to where the previous post left off: granted that our world has radically changed, what can we do in the aftermath? Continue reading Aftermath Part II: Living in a Radically Changed World

Aftermath: Living in a Radically Changed World

Peter Ossorio put it succinctly and exactly: “A person takes the world to be as he has found it to be.”

But sometimes, suddenly and without warning, we find the world to be radically different than we had previously found it. Something happens that had been  unthinkable to us – the events in Newtown, an economic collapse that wipes out our hard-earned wealth, the events of 9/11 – and we find ourselves living in an unknown world. What now? What do we do when the unthinkable becomes possible, or even real? Continue reading Aftermath: Living in a Radically Changed World

What Actually Happened in Newtown

The events in Newtown are well established by now: 20 young children shot to death, seven adults murdered, the shooter dead by his own hand. A young man struggling and failing to find his place in life; rapid fire weapons at hand in his home; he shot his mother and then went to the school to find and kill children. These are the bare facts.

But the bare facts explain nothing. We ask, Why? What are we to make of this inexplicable horror: Was it a manifestation of pure evil, as some say, or the tragic result of untreated mental illness? How could this happen? Who is to blame, and how can we prevent it from happening again? These are important questions with many answers, few of them essentially satisfying.

But one thing we can be certain of: what actually happened in Newtown is, our  world changed. And it will not soon be changing back. Continue reading What Actually Happened in Newtown

Panic, Contagion and Mass Market Movements

Sixteen years ago I wrote down the above title on my “Work in Process” list, thought about it for a few minutes, and put it at the bottom priority. Granted, it was a complex and poorly understood topic for which I intended to offer a new  formulation – but it was hardly a burning issue. To find familiar examples I would have had to reach back to the Great Depression of the 1930’s, or the post-war hyper-inflationary periods in Germany and Hungary – historical curiosities that had no perceivable relevance to our world in 1996. Common wisdom and expert opinion agreed: We were beyond all that.

But here we are in 2012 and all that has changed. We have seen the unthinkable occur, again and again: a major investment bank going bankrupt, housing prices plunging across the board and staying down, a global near financial meltdown, people actually paying serious attention to Nassim Taleb – and now we face the  imminent possibility of default on sovereign debt by major European nations, and perhaps even the collapse of the Euro.

The topic now seems, if anything, too timely. Every second article in the financial press seems to be about when the next break in the global economy will come, how far it will spread and how rapidly. Rest assured, this is not yet another Chicken Little post. The economic sky may in fact fall, but that’s for others to predict.

What I’m interested in here is: What actually happens with individual investors that results in panic, contagion and mass market movements, and how can we spot it before it comes crashing down around us? Continue reading Panic, Contagion and Mass Market Movements

What’s Really Going on With “Sunk Cost”

“Sunk cost” is tricky stuff.

It is a standard accounting term, referring to the investment already made in an asset or project. When deciding how to value the asset currently, or whether to invest further in the project, we are firmly admonished to ignore “sunk cost”, and to make our evaluations based on its current market value (or expected future value). This is sound advice, rational to the core, and is perfectly in accord with classic economic theory.

So what’s the rub? To the consternation of accountants, economists and financial advisors everywhere, when we look at actual investment decisions, people routinely do NOT ignore sunk costs. What they have already invested is typically a factor – sometimes a determining factor – in what they decide to invest now. Talk about “irrational”! And since behavioral economists do talk about “irrational” they account for this and many other common deviations from rational practice by invoking the “Endowment Effect.”

In the first post of this series, “Take the Cash and Let the Credit Go”, we saw how “loss aversion” is an ad-hoc account of research data that merely labels the phenomenon but in no way explains it, and gave an alternative formulation that actually predicts the research findings. In this post we will subject the “Endowment Effect” to the same treatment, with an interesting twist: exactly the same conceptual structure that predicts loss aversion also predicts the Endowment Effect! This is our first solid clue that we are on to something really different and powerful here. (And there’s a good deal more where these come from, as we shall see as this series unfolds.) Continue reading What’s Really Going on With “Sunk Cost”

What people really do instead of maximizing utility

A recent research study turned up some delightful results that are both not intuitively obvious to a five-year-old, and absolutely at odds with the predicted rational utility-maximizing behavior of homo economicus.

As reported in the January 14, 2010 edition of The Economist, Tanjim Hossain of the University of Toronto and John List of the University of Chicago “… worked with the managers of a Chinese electronics factory, who were interested in exploring ways to make their employee-bonus scheme more effective … At the beginning of the week, some groups of workers were told that they would receive a bonus of 80 yuan ($12) at the end of the week if they met a given production target. Other groups were told that they had “provisionally” been awarded the same bonus, also due at the end of the week, but that they would “lose” it if their productivity fell short of the same threshold.

“Objectively these are two ways of describing the same scheme.” But as it turned out, “The fear of loss was a better motivator than the prospect of gain (which worked too, but less well). And the difference persisted over time: the results were not simply a consequence of workers’ misunderstanding of the system.” Continue reading What people really do instead of maximizing utility