The world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.
Charlie MungerRead
How could economics not be behavioral? If it isn't behavioral, what the hell is it?
Interpretation
What this quote means
Economics inherently involves human behavior and decision-making processes.
Charlie Munger emphasizes that economics cannot be separate from behavioral aspects, as economic actions are fundamentally driven by human choices and psychological factors. Without considering the behavior of individuals, economics loses its relevance and understanding of real-world applications.
Themes
EconomicsBehaviorHumanDecisionPsychology
In practice
Example use cases
In a discussion about market trends, one might say, 'As Munger pointed out, how could economics not be behavioral when our consumer choices define market demand?'
More from Charlie Munger
All quotes βI believe in the discipline of mastering the best that other people have ever figured out. I don't believe in just sitting down and trying to dream it all up yourself. Nobody's that smart.
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Economics is in many respects the queen of the soft sciences. It's expected to be better than the rest. It's my view that economics is better at the multi-disciplinary stuff than the rest of the soft science. And it's also my view that it's still lousy.
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Look at this generation, with all of its electronic devices and multitasking. I will confidently predict less success than Warren, who just focused on reading.
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Economics profession, they've been - they've been confident in various formulas, but economics is not physics. The same formula that works in one decade doesn't work in the next. Economics is a difficult subject.
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As I talk about strengths and weaknesses in academic economics, one interesting fact you are entitled to know is that I never took a course in economics. And with this striking lack of credentials, you may wonder why I have the chutzpah to be up here giving this talk. The answer is I have a black belt in chutzpah. I was born with it.
Charlie MungerRead
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