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The Daily Wildcat

The Daily Wildcat

 

    Using confidence to master the marketplace

    Over the past few months the confidence in our economy and as a result, our futures, may seem uncertain and cast from our hands. With it, our dreams may seem more distant, our job prospects less sterling, and our bank accounts -ÿlet’s face it, we never had much money anyway – marginalized. It is easy to think we are in dire straits, that somehow the world we thought our parents promised us is no more. Yet despite how the capital markets are performing or how real and painful the job losses across this nation really are, eventually free markets will prevail, we will have families some day, and some of us will reach our highest dreams. When we realize confidence is a choice, the only question we have to ask is how do we turn things around, and how as students do we take the economic health of our country into our own hands? A pretty daunting task, considering that many of us are under-skilled, over-privileged, and tend to cram and procrastinate for 99 percent of life. Nonetheless, as the Nobel Prize-winning economist Thomas Shelling has discussed, how does micro-behavior lead to macro-results? How can the cumulative efforts of each student contribute to a revived economy? The following is a highly un-quantitative means:

    So this is the idea. Now that we empirically know happiness is contagious (according to Nicholas Christakis) and that behind the frozen credit markets is a lack of confidence, maybe our psychology has more business governing how we invest, save and lend than does any government stimulus. Maybe the little things we do each day, even as students, can multiply across the score of society and possibly save jobs, create GDP, and re-stimulate bank lending. I am not referring to some economic chaos theory, although for some, this seems a plausible description of the current situation.

    I am talking about incremental changes we can make every day that by our own efforts seem small but collectively could inspire one another, make us believe once again in “”market fundamentals”” and inspire the confidence we need to take action.

    It begins with the premise that we are defined as a society not when times are good, but when they are tough. And the little things we do each day, such as how we treat one another and the relationships we kindle, will ultimately be the catalyst necessary to restore confidence. This could be done by reaching out to someone you have never met and this in turn provides the right conversation to spark a new and innovative idea.

    Volunteer at a local non-profit or charity when many of these organizations are in need of help but have seen their funding grind to a halt. Call someone you know who has lost their job to see if you can help them get work once again. Essentially, we must have the courage to leave our micro-suffering behind us and the belief that macro-improvements are possible by a little action from everyone.

    When we realize we cannot insulate ourselves from the economic crisis, that saving pennies and cutting corners in an economy dominated by consumer demand will only push us further back, then we will understand we can get out of the crisis together. I am not advocating “”spend, spend, spend K-Mart shoppers,”” but what I am saying is to do things together because it is easy to isle oneself away when we feel psychologically maimed by the market.

    So no, these suggestions won’t be part of the typical economic recovery plans we hear about in the news each day. And yes, even an economy made entirely of hard working individuals with a collectivist agenda doesn’t amount to greater GDP. But just maybe an investment in our relationships and our communities now will prepare us for when opportunities do present themselves.

    If we are to embark on the world a little less certain, the little things we do now will pay large dividends in the future and the economic recovery we all desire will have been a decision when we thought we were powerless. If Adam Smith’s invisible hand is as Milton Friedman described, “”the possibility of cooperation with coercion,”” then maybe the restoration of confidence is the second hand that pushes us forward again.

    – Paul Cervantes is an accounting senior. He can be reached at letters@wildcat.arizona.edu.

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