Hi Readers! I got this essay from Prof. Steven Horwitz, the Charles A. Dana Professor of Economics at St. Lawrence University, Canton, NY. (La di dah!) Thought it made a lot of sense, even if it’s a little academic. Enjoy! And if you want to drop him a note, his email firstname.lastname@example.org. — Lenore
To Be A More Confident Parent, Think Like An Economist by Steven Horwitz
In Lenore’s book, she has a chapter urging parents, “Don’t Think Like A Lawyer: Some Risks are Worth It.” I’d like to propose its corollary: “DO Think Like an Economist.” (And not just because I am one.)
When economists make decisions they compare the costs of one choice versus the cost of another. That leads us to the idea of “trade-offs.” Sometimes, reducing one kind of cost to zero — say, “zero chance of abduction” — means forgoing some other valuable benefit. Say, “learning independence,” or, “becoming street-smart” or even, “walking to school every day and not getting fat.” The trick is to find the happy medium.
When economists show this idea visually, we can’t help ourselves. We draw a graph. The two axes represent the trade-off as a curve from one axis to another. The point where one cost is reduced to zero while the cost of the other is maximized is called a “corner solution” because it appears at the corner of one of the axes. Generally, economists see “corner solutions” as bad because they don’t recognize any trade-offs as worthwhile. They represent a consumer willing to forgo ANY and ALL benefits of budging, even a little bit.
For example, dwelling on worst-case scenarios about childhood risks puts parents in the corner. Trying to protect our children from any and all forms of potential danger makes us willing to sacrifice other things that are valuable, such as the self-reliance that comes from exploring the woods, or the neighborhood. When we focus only on the bad things that could happen on an overnight camping trip, for example, we keep the kids home. They don’t get to learn how to respond to the unexpected (like rain). They don’t get to hear ghost stories that they’ll tell THEIR kids. They don’t even get to roast a weiner.
Likewise, when we drive our kids to the bus stop, we put them at greater risk of a car accident in the name of preventing the very remote danger of abduction. At the same time, we’re stifling their independence. So we’ve made them MORE likely to suffer a car accident and LESS self-confident. That’s a big trade-off, considering how remote the chance of abduction is to begin with.
If you think like an economist, you can get out of these “corners” by doing two things. First: Try to make a truly accurate assessment of the risk involved in your choice (I recommend reading some solid statistics). Second: Ask yourself, “What are the benefits that go with taking this (often tiny) risk?”
Remember: Risk can never be reduced to zero. Moreover, the goal of parenting is not solely to “minimize risk,” but to help our kids grow up and embrace the world. Remember, too, that risk also means the possibility of failure – and that’s great! Failure is part of the learning process. Let your kids be responsible for remembering their lunch and you run the risk that one day they’ll leave it at home and get really hungry. But that also carries the huge benefit of them learning, perhaps by forgetting, how to organize themselves for the school day.
Thinking like an economist beats thinking like a lawyer, hands down. But even thinking like a lawyer beats the very worst: Thinking like a politician — and continually bailing them out when they fail!