Friday, November 12, 2010

That Econ Freak

Today, my lesson for my co-op economics class was about the Law of Diminishing Marginal Utility.  I freakin' love this concept.  For two reasons.  One, it's completely awesome to have this concept as a rule.  Eating one donut is fabulous...eating a dozen makes me ill.  One peanut butter cup?  Fabulous.  A whole bag of them?  Not so much. 

That this can be charted is what keeps me in love with economics.

But also, I love how it illustrates that so many Super Cool concepts are hidden behind complicated economic terms.  I think it unnecessarily scares people away from the subject.

Today I was also thinking about it in terms of our family quest for minimalism.  Before our move last spring, we knew our old house was too big.  We had too much stuff.  We had diminished marginal utility of stuff and space.

But then we moved into our Tuna Can temporary place, and that was too small. Our children didn't really like sleeping on the floor every night.  And we didn't have enough bowls. 

We have now found our point of maximum marginal utility, in terms of space.  This place is the perfect size. 

I love having two bathrooms.  Three was too many.  Things I needed were always in the wrong bathroom.  Too many toilets to clean.  Unnecessary surplus of bathrooms, if you ask me.

But one bathroom wasn't enough, either.  Two is the perfect amount.

I'm starting to feel like That Econ Freak, because I'm becoming more and more alarmed at why we don't teach these concepts.  They're completely awesome.  My students were absolutely connected to the concept of Too Much leading to decreased satisfaction.  Thanksgiving dinner, Halloween candy, eating Hot Pockets. :)

Contemplating this in terms of wealth helps clarify my previous confusion as to why coming to America didn't solve the Sudanese refugees' situation.  It just replaced the old issues with new ones...because they came from "not enough" into "too much."  Finding that balance between lacking basic needs and having an overstimulation of Stuff seems to be where we will find our greatest peace.

Great article on this same topic:

http://financialphilosopher.typepad.com/thefinancialphilosopher/2008/08/the-diminishing-marginal-utility-of-wealth.html