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Behavioral economics is a hot area of psychological research. What economics explores about supply and demand for money and resources, behavioral economics explores about supply and demand for intangible psychological currencies – experiences we want but which are in finite supply. I’ve been interested in a few such currencies. For example:
Listenomics: Supply of, and demand for, people’s finite attention. We can’t listen to everything with equal receptivity. Listenomics explores how we allocate our finite capacity to listen.
Affirmationomics (Egonomics): Supply and demand for personal affirmation, evidence that confirms that we’re of value.
Will-onomics: Supply and demand for will power, the ability to do the harder, better thing.
What physical laws are to physics and chemistry, economics is to matters of value. Physical law doesn’t tell nature what it ought to do. It explains what is likely to happen under different physical circumstances. It inventories factors that come into play in physical dynamics.
Economics does the same with value dynamics. It inventories the kinds of factors that influence what is likely to happen when lots of humans value this or that. Economics is our best system yet for modeling the dynamics of values and preferences, and its exciting to see it applied to more than just money and resources, serving up new psychological insights and in the process, waking economists up to the fact that it isn’t all about money and resources.
With physical laws, there are no values involved. Stuff just happens according to natural laws. With economics, the relationship to value is a little more complicated. Economic theorists aim to provide a value-neutral interpretation of the dynamics of value. So, for example, economists assume that all people have values, things that they prefer, but it doesn’t speak to what they should prefer.
Recently I’ve gotten interested in a new, perhaps fundamental topic in behavioral economics, inspired by a revelation about myself: Reflecting on my six decades, I notice just how much of my attention and effort has been motivated by my need to keep anxiety at bay. I avoid anxiety. I try to stay calm.
I doubt I'm alone in this. Life is a fundamentally anxious affair. It always has been, but is especially so for us humans. With our unprecedented capacity for language we humans have an ability to imagine in detail all manner of anxious possibilities.
This has been a central theme in the work of Stanford’s Robert Sapolsky, captured nicely by the title of his most famous book: “Why Zebra’s Don’t Get Ulcers”
Zebras freak out temporarily when a lion comes prowling. When the lion is gone, the Zebras forget about it and calm back down. We humans freak out when danger comes prowling, but we don’t forget about it.
In a way, we humans are all suffering from pre- and post-traumatic stress syndrome. Our language-laced imaginings enable us to foresee our own failures, losses, and deaths, and to ruminate about them, stirring chronic stress. Our past traumas can reverberate for decades.
Anxiety is a problem for many a species, but it’s a defining problem for us humans. There’s a high cost to our persistent anxiety (Sapolsky inventories the physiological costs) and therefore a high value on ways to alleviate it – a high demand for ways to get and stay calm.
That’s why I think calmonomics may be the rightful cornerstone of behavioral economics. Why do we seek affirmation? Because it calms us. What are we most likely to listen to? Things that calm us down rather than disturb us. What depletes will power? Anxiety.
Here are a few speculations from my initial exploration of parallels between economics and calmonomics:
Whatever floats your boat (and keeps it from sinking into anxiety): Theoretical economists are agnostic about what you should value. Whether you want world peace or a mansion, it’s all the same to them. They measure preference with “utility curves” which model relative value – how much of one good you would trade for another. Preferences are different for different economic agents. We don’t all value the same thing. Likewise, in calmonomics, people have different demand for different ways to stay calm. Some people stay calm relatively easily. Others are higher in “neuroticism,” the personality trait that measures reactivity. And to stay calm, people have different preferences – exercise, drugs, shopping, meditation, prayer, relationships – and many options, and for different people, different preferences among the options. Calmonomics would be neutrally interested in the diverse demand for ways to stay calm, and the variety of factors that drive such preferences.
Calming’s negative externalities: In economics, a negative externality is a cost we impose on others. For example, when we buy gasoline these days we’re not paying for the negative climate change costs we impose on society by burning that fuel. Climate change is a negative externality of buying gasoline. Some techniques for calming ourselves impose costs on others that we don’t pay. For example, whenever we calm ourselves by putting other people down, we cause them more anxiety in ways we don’t necessarily pay for. Ideally, in economics, people pay the true cost for what they use. In other words, in order to be fair, we internalize negative externalities. Applying that logic, we would be more careful not to calm ourselves at other people’s expense. The watchword for calmonomics would be, “Whatever floats your boat without making the water choppy for others.”
Elasticity of demand: In economics, elasticity of demand measures how much demand goes down when the price goes up. Gasoline demand is highly inelastic. The price can go way up and people don’t demand much less. They need gas and are slow to accept substitutes. Demand for calm in general may be highly inelastic too. Staying calm is a big priority for most of us, which makes it an inelastic good, something we need no matter what the price.
Proprietary vs. Commodity Goods: A proprietary good is one you can get only from exclusive sources. Mac products are good examples. Mac loyalists accept no substitutes. Commodities are goods you can get from any source and buy without regard for quality, just price. Ways to stay calm can either be propriety or commodity goods; proprietary, for example, if you believe that your particular brand of spirituality is “the only way,” or commodity if it’s as generic as exercising or taking walks. Religions that claim there is only one path to heaven (the promised source of guaranteed eternal calm) are promoting their faith as a proprietary good and in the process gaining personal calm at other people’s expense (a negative externality).
Opportunity costs: The cost of staying calm includes actual outlays, for example, the price of vacations, meditation retreats, or shopping sprees, but it’s also measured in what we forego in order to stay calm. In economics, whatever we forego is called the “opportunity cost,” the cost in missed opportunity to do something else. When I say that I now notice how alleviating anxiety has been a major driver in my life, I’m turning my attention to the things I might have done had I not devoted so much attention to staying calm. Calmonomic’s opportunity costs can be very high, without us noticing. For example, think of all the things you might have done if you had felt more confident, calmer in the face of challenges. An opportunity cost of staying calm may be a failure to face the truth. As the psychologist Stephen Kull said, “the instinct to survive is strong; the instinct to alleviate anxiety is stronger.”
Core products: When you’re selling ¼ inch drill bits, you’re not really selling the bits. You’re selling ¼ inch holes. The holes are the “core product,” the ultimate demand met by what’s supplied. Since the mid-20th-century advertisers have known how to cultivate demand for and supply of psychological core products – cigarettes that make you look cool; beer that makes you popular. Sure they’re selling beer, but beer is mostly a commodity. It only becomes proprietary if you can persuade people that it’s the exclusive way to get what they crave psychologically, which is why so many advertising dollars go into showing their beer being drunk by calm, cool, popular people. More than we notice, the core product for a lot of goods and services is calm, the alleviation of anxiety. “Buy this, believe this, do this and you will feel calmer.”
Black market: Paradoxically, admitting to our demand for calm makes us anxious. Calmonomics is therefore a bit of a black market, a taboo subject. Sure, we might delight in gossiping about how “needy” other people are. But it’s hard to admit that staying calm is a universal need or a need we personally feel. This is changing a little. For example, there’s a growing market for stress-reduction techniques. Still, a lot of goods and services whose core product are ways to stay calm don’t get marketed as such. Mindfulness, spirituality or religion for example – their promoters don’t say, “Hey, we’re all inherently anxious. Here’s a way to keep ourselves calm.” That would just make people anxious. To get a sense of it, imagine how you would feel reading on the subway a book with the cover blaring “50 ways to stop feeling so incredibly anxious.” Instead, suppliers of ways to stay calm tend to say, “We offer the highest path to the highest truths. Commit yourself to our path and you will reach heights superior to those reached by others.”
To name it is to tame it: For anyone who cares about what’s true, the promotion of calming techniques as truths backfires a bit. Think of the reputation new agers have earned. They seem so anxious that they’ll mistake whatever calms them down for the deepest truths. If you haven’t seen the Stuart Smalley send up of new age anxiety, it’s worth checking out. Paradoxically, we can become more tolerant of other people’s calming delusions if they would just admit that that’s what they’re buying. For example, if someone said “I don’t know whether my spiritual beliefs are true or not, but really I practice them because they help me keep it together. True or not, they keep me calm and that’s worth a lot.” You’d be less likely to pick apart their beliefs as untrue. At least I would. Admitting that we all need ways to stay calm, me included, makes me much more tolerant of other people’s ways of floating their boats regardless of how accurately they represent the scientific truth. Knowing that we too have our illusions and cravings to stay calm makes us less likely to begrudge other people theirs.
Exposing the black market for calm might make us all a bit more tolerant of each other’s calming strategies – especially in tough times like these when calm seems to be in higher demand and shorter supply. In tough times like ours, there’s a tendency toward calm-hoarding, doing whatever we can at anyone’s expense to keep our anxiety at bay. Perhaps the best way to increase the supply of calm is for all of us to admit that we demand it.
