The great thing about behavioural psychology and economics is that they help us to see that there are actually pretty good reasons why human beings swing from greed to fear, and why we're not really calculating machines or utility-maximisers.
Interpretation
This quote emphasizes that human behavior is influenced by underlying psychological and economic factors rather than purely rational calculations.
Niall Ferguson's quote highlights the complex nature of human decision-making, suggesting that our choices are often driven by emotions such as greed and fear rather than purely logical or rational thought. It points to the importance of behavioral psychology and economics in understanding these often irrational swings in human behavior, offering insight into why we do not always act as utility maximizers, but instead are shaped by deeper influences.
In practice
This quote can be used in a lecture on behavioral economics to illustrate human decision-making.
It's all very well for us to sit here in the west with our high incomes and cushy lives, and say it's immoral to violate the sovereignty of another state. But if the effect of that is to bring people in that country economic and political freedom, to raise their standard of living, to increase their life expectancy, then don't rule it out.
If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.
Civilisation is partly about restraining the male of the species from engaging in the violence of the hunter-gatherer period. But it doesn't take an awful lot to unleash it.
For 500 years the West patented six killer applications that set it apart. The first to download them was Japan. Over the last century, one Asian country after another has downloaded these killer apps- competition, modern science, the rule of law and private property rights, modern medicine, the consumer society and the work ethic. Those six things are the secret sauce of Western civilization.
The West may collapse very suddenly. Complex civilizations do that, because they operate, most of the time, on the edge of chaos.
Over time, the welfare state has become dysfunctional in a surprising way. But in a way it became a victim of its own success: It became so successful at prolonging life, that it becomes financially unsustainable, unless you make major changes to things like retirement ages.
We live in a world where most people still subscribe to the belief that shame is a good tool for keeping people in line. Not only is this wrong, but it’s dangerous. Shame is highly correlated with addiction, violence, aggression, depression, eating disorders, and bullying.
Psychotic hallucinations, whether they are visual or vocal, they address you. They accuse you. They seduce you. They humiliate you. They jeer at you. You interact with them.
Sometimes the personalities at the helm of the madness industry are, with their drives and obsessions, as mad in their own way as those they study. And that relatively ordinary people are, more and more, defined by their maddest edges.
Had I left those images hidden in the emotions, I might have been torn to pieces by them.
Both dreams and neurotic dream-states have as their function the avoidance of displeasure, but the dream-states also serve to provide a positive pleasure gain.
It used to be that whenever I introduced myself to people and told them I was a psychologist, they would shrink away from me. Because, quite rightly, the impression the American public has of psychologists is, 'You want to know what's wrong with me.'
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