Home » Financial, Psychology, Success, The Business of Life, Wisdom & Insights

Hedonic Calculus

4 January 2011

The topic of happiness is eagerly pursued by many journalists, columnists, authors, and media pundits.  There is a tremendous amount of revenue available for people that can convince others that they possess the proverbial ‘secret’ to happiness.  In any event, it is worthwhile to examine the taxonomy of personal happiness.

One curious quirk of the human emotional state is that we react more favorably to a consistent string of good news than to an infrequent occurrence of GREAT news.  This means that most people will find themselves with a much better feeling about their life, finances, or career if a consistent stream of small achievements are accomplished as opposed to waiting for one big thing to happen.

The other side of this equation presents an opportunity for people with the intellectual fortitude to withstand sustained disappointment while working toward a large payoff.  Many of the more lucrative opportunities in life are nonlinear in nature.  This means that there is not a direct correlation between the work that is invested and the rewards that are received.

With a traditional or ‘linear’ type of activity, rewards immediately follow the work.  The most typical iteration of this phenomenon is working in a job.  Employees are frequently paid every two weeks in exchange for their work.  This is a very comforting arrangement, but is not necessarily where the greatest rewards can be found.  Most people unconsciously seek to live within the land of linear activity, because it feels much more fair than the extreme inequality of nonlinear outcomes.  However, the price that is paid for this feeling of fairness is the missed opportunity for nonlinear achievement.

The proverbial “Big Money” exists primarily in the nonlinear marketplace.  This land creates vast chasms of inequality as the rewards for winners are immense, and the numbers of apparent losers are enormous.  Furthermore, the advent of winners can appear to be random with many skilled people staying permanently overlooked by the marketplace while another people realize fantastic success through a combination of luck and skill.

In this environment, years upon years of effort can be expended with no tangible result, then suddenly produce fantastic returns . . . or continue to show no progress indefinitely.  There is no telling when the shoe will drop.  This makes activities such as entrepreneurship, writing books, and investing very difficult for most people to handle.  It is extremely difficult to maintain faith in the future prospects of success when tangible results have not yet materialized.

In the end, there is a critical choice for most people to make.  The choice involves the pursuit of consistent happy feelings, but minimal prospects for big achievements versus the pursuit of great achievements at the expense of consistent happy feelings.  The former is much easier for most people to undertake, while the latter requires a great degree of discipline and determination.

The Business of Life Newsletter

Print Friendly
 

Leave your response!

You must be logged in to post a comment.