what is life exactly?


The Great Depression

[A guy is drinking alcohol in a bar. Suddenly, an economist stepped in the bar and sits beside the guy.]

ECONOMIST: what seems to be the problem?
GUY: Leave me alone!
ECONOMIST: I can help you.
GUY: what do you know?!
ECONOMIST: I’m an economist.
GUY: I don’t need an economist right now. All I need is my alcohol.
ECONOMIST: but why?
GUY: you can’t understand
ECONOMIST: I can’t, if you won’t explain.
GUY: can’t you see I’m depressed? There’s nothing you can do.
ECONOMIST: in case you didn’t know, a well known economist named John Maynard Keynes provided an explanation and a solution for the great depression during the 1930’s
GUY: it’s a different story. Besides, this is not about money and the economy. It’s about love, my love.
ECONOMIST: economists study social phenomenons and it is undeniably true that love is a social phenomenon. I believe that I can give you an economic explanation about love.
GUY: ok then. If I don’t get satisfied with your answer you owe me a bucket of beer!
ECONOMIST: deal. But if I win, you have to follow my condition.
GUY: what is that?

[the economist whispers something to the guy]

GUY: ok. It’s settled then.


ECONOMIST: let’s start. Why are you depressed?
GUY: because I’m torn. I don’t know what to do.
ECONOMIST: torn to do what?
GUY: I think I’m falling in love with a new girl…
GUY: but.. I think I’m still in love with my old friend.
ECONOMIST: so, you can’t decide who to pursue?
GUY: absolutely.
ECONOMIST: how long have you been in love with this old friend?
GUY: about 3 years already. Since the first time we met.
ECONOMIST: did she become your girlfriend?
GUY: sadly, no.
ECONOMIST: but you courted her right?
GUY: yeah.
ECONOMIST: she rejected you?
GUY: no. I didn’t have the guts to tell her.
ECONOMIST: never, even once, did you ask the “question”?
GUY: yes. I was too afraid then I found out that she already had a boyfriend. And I never bothered telling her how much I loved her.
ECONOMIST: what a disgrace.
GUY: now, I’m afraid to have the same painful experience with the new girl if ever I start courting her.

[guy drinks alcohol]

ECONOMIST: love is an investment.
GUY: what?
ECONOMIST: I said love is an investment.
GUY: what does that suppose to mean?
ECONOMIST: just imagine yourself as a wealthy investor.
GUY: ok, so I’m an investor with lots of money
ECONOMIST: and you invested your money in a company… company TJ.
GUY: how much did I invest?
ECONOMIST: let’s say, you invested almost all your money.
GUY: ok. Then what?
ECONOMIST: as an investor and stakeholder of company TJ, you are concerned with the business’ operations and decisions to know whether your money is in good hands or not.
GUY: yes.
ECONOMIST: being concerned means you would simply update yourself with the company and be with good relations with it or you could simply ask “questions” to know if you’re money is going somewhere. Right?
GUY: definitely.
ECONOMIST: however, let’s say that you forgot or you are afraid to ask questions about the company’s operations. As a result, you were not aware that the company was on the decline. Now, it doesn’t take an economist to know the implication of this.
GUY: of course.
ECONOMIST: what will you do now? and why?
GUY: obviously, I would get my money back simply because the money I invested in that company is not generating as I expected it to be.
ECONOMIST: true. but, why did you continue to pursue her given the same horrible conditions?
GUY: ….. I don’t know. Wishful thinking.
ECONOMIST: as I said earlier, love is an investment. Just like any economist, you should take care of your own investment. Investments should be taken seriously and deliberately. It’s not something passive wherein you hopefully wait for something good to happen. You have to make sure that the love you invested in a girl is not on the decline. If that’s the case then you should do something before it’s too late.

[guy finishes a bottle of alcohol and orders another.]

ECONOMIST: do you know the spending hypothesis?
GUY: no, what about?
ECONOMIST: it is used to explain the some of the causes of the great depression. Economists say that there was a contractionary shift in the IS curve which led to the decline of income in the early 1930s coincided with falling interest rates.
GUY: what are you trying to say?
ECONOMIST: your situation is comparable to this. One of the reasons in the decline of income is the large drop in investment in housing. During the 1920s, there was an excessive residential investment boom and, when it became apparent, the demand for residential investment declined radically.
GUY: maybe you’re right that I should not have invested excessively up to the point where the demand for my investment declined or was not needed by her anymore.
ECONOMIST: this is just an example that investments should not be taken for granted.

[guy drinks more beer]

GUY: so, maybe it’s better to have not invested at all than to have invested and lost everything I have.
ECONOMIST: not really.
GUY: but it’s better to have money than to have none right?
ECONOMIST: true enough. But it will only lead to regrets. Regrets of knowing that you could have done something better with that money.
GUY: but but…
ECONOMIST: money is created for a reason. It is used in many different ways. It is not something that should be kept all the time. Imagine a businessman, he invests or spends money for his business to grow or have more money. Just like love, it should be used or should be given to someone as a gift than just to keep it on your own because through that action it is where one person grows and, at the same time, the loved one also grows.
GUY: but we should save money right?
ECONOMIST: correct. That’s one thing that most lovers forget. Some lovers think that the most painful thing about loving someone is losing the one they love but it is not.
GUY: then what is the most painful?
ECONOMIST: it is in losing yourself in loving someone too much to the extent that you forget or purposely disregard yourself of saving some love for your own.

[Guy drinks more beer]

GUY: but how would you know which business or company to invest?
ECONOMIST: a very good question. Investments are susceptible to default on the return of investment. It is not a guarantee that when you love someone you would be loved the same way.
GUY: how would you know if the return on investment would be rewarding?
ECONOMIST: you must analyze the business economically to make sure but it is not an assurance. It is more of a risk because there are some uncertain events that greatly vary the situation.
GUY: then I should only invest a little portion of my money to be safe.
ECONOMIST: remember, the higher the risk the higher the return. If you invest a lot, the return on investment would be high, if otherwise, the return would be low.
GUY: but if I invest a high amount and then fail then I would have nothing.
ECONOMIST: that’s why it’s called a risk. You have to deal with it. One of the most painful things in life is regretting things in the past because of letting the risks pass by. It’s better to have risked the chances between the two of you being together, even if the probability is low, than not to have tried at all.


ECONOMIST: are you familiar with the stock market crash of 1929?
GUY: no.
ECONOMIST: it is also responsible for the contractionary shift in the IS curve. The crash in the stock market reduced wealth and increased uncertainty in the US economy. Given this circumstance, what do you think is the effect on the consumers like you?
GUY: well, I would save more of my income rather than spend it.
ECONOMIST: correct. It’s hard to spend love on someone if you know there are many uncertainties but if you let it hinder you like the people during the 1929 incident then there would be a contractionary shift in the IS curve which will lead to another great depression. Sometimes you just have to take the risks in life.


GUY: how I wish I was like the others who cannot invest so that I don’t have to go through this.
ECONOMIST: some say that but…
GUY: but what?
ECONOMIST: those people don’t exist.
GUY: why is that?
ECONOMIST: because we are born to love. It is in our nature to love. It is what keeps us alive. It is what makes us know we are still breathing in this earth.

[guy drinks.]

GUY: so everyone also invests?
ECONOMIST: sadly, no. because there are some who don’t want to take the risk. They live a life of regret.
GUY: so, have you ever invested in a business?

[the economist orders an alcohol and drinks]

ECONOMIST: yes, I did.
GUY: how did it go?
ECONOMIST: there was also a contractionary shift in the IS curve.
GUY: so all your efforts were wasted?
ECONOMIST: somehow. It depends.
GUY: depends on what way?
ECONOMIST: wasted in the point of view of the sunk cost.
GUY: what’s a sunk cost?
ECONOMIST: things that you spent which cannot be recovered.
GUY: so what’s the other part?
ECONOMIST: not wasted because I know I did it for my love for her.
GUY: I don’t get it.
ECONOMIST: let’s say that I’m courting a girl. All the things I gave to her like chocolates, roses, sweet poems also my efforts including the time I spent with her like walking in the park, giving her a ride home, watching the sunset together are all known to be sunk costs. It is because no matter what I do, I cannot recover or ask her to give it all back to me. There is no reimbursement to that.
GUY: but how come, the way you describe it, you’re not treating it as a sunk cost?
ECONOMIST: yes, you’re correct about that. Though it is a sunk cost, I consider it more of an asset.
GUY: why?
ECONOMIST: for me, when you love or loved someone, you don’t consider everything you do or did for her as a cost or a liability if you don’t get anything in return. You do simple things for her out of love. Love should be a gift for someone while not asking anything in return. Even if I can’t recover it and had nothing in return, it’s all worth it because I did it all for her.
GUY: but how would your money grow if the business you invested in failed to give the return on investment, just like your situation?
ECONOMIST: in my situation, I took the risk. Though I failed at my investment, I do not consider it as a total liability on my part because through it I learned and grew.
GUY: but how would you able to invest if you have nothing more to invest?
ECONOMIST: love is not scarce. It is a never ending resource. However, true love is scarce.
GUY: what’s the difference?
ECONOMIST: even if you fail at the first time or even the nth time. It doesn’t disable you to love others. No one or nothing can stop you from loving other people. Even if you get rejected numerous times in your whole love life, you will continue to love and love and love another until you find your one true love. That one true love is unique and when that person comes into your life, just like any other scarce resources, it should be allocated or used properly to maximize its use. So when she comes, treat her well and never let her go.
GUY: …

[the economist drinks.]

GUY: is it possible for the great depression to happen again?
ECONOMIST: yes, it is possible.
GUY: but why?
ECONOMIST: economists studied many different events that led to the great depression but there are still some that have not yet been analyzed or discovered. The complete causes of the great depression are not yet fully available for us.
GUY: then what can I do to avoid the great depression?
ECONOMIST: though it can happen again economists believe that the mistakes that have been studied will not be repeated. Just like your case, you’re not exempted from getting your heart broken but you can avoid it by not repeating the same mistakes you’ve done.

[both of them drink]

ECONOMIST: have you decided what to do already?
GUY: I do but something’s bothering me
GUY: it’s about our bet.
ECONOMIST: what about?
GUY: why did you bet something like that?
ECONOMIST: just imagine the world if John Maynard Keynes decided not to share his theory on economics. There is a big possibility that the world may still be suffering from the great depression or the time span of the great depression would have been longer.

[guy smiles and drinks]

GUY: it’s amazing how you managed to get me out of this depression through sharing what you know and what you experienced and now I’m obligated to write a blog about this to let others know.
ECONOMIST: whether you like it or not, you have to follow our deal.
GUY: yep. I think I’ll enjoy making that blog. It would be a sign and a confession to her that I’m ready to invest to a new company.
ECONOMIST: may I ask what the company’s name is?
GUY: SM… I’m ready to take the risk because I don’t want to have regrets.
ECONOMIST: always remember that the only regrets in life are the risks you didn’t take.

[both drink alcohol]

GUY: who would have thought you’d win.
ECONOMIST: I may have won the bet, but what you’ve learned during our conversation makes you more than a winner of this bet.
GUY: yes. We all know it’s more than just a bucket of beer.




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