The economics of expectations
By Benjamin Balke
I have always wondered why two people can be exposed to nearly identical disappointments or have the same types of trauma and one becomes bitter and resentful while the other actually grows as a result. In the past I attributed it to mental toughness, but recently I have started to think of this a little differently.
Recently, I saw a video from my friend Benjamin Faust about something called the Laffer curve. PregerU also has a good one. In case you did not watch the videos, the Laffer curve is the point where increasing the tax rate actually yields less tax revenue. Of course, people disagree as to where that spot is but the idea is this: there is a point at which people just will not work if they do not see the financial results they expect. When people keep more of what they earn it gives them incentive to keep going in that direction. The flip-side is also true.
I thought about this for a long time, but not in terms of taxes. I thought about this in my own life and behavior. At what point do I need to see rewards for my efforts in order to continue to work in a particular direction? Are there times that I have been so frustrated that my efforts are not yielding what I believe is the correct amount of reward, and in those times have I given up?
There is a very famous story in the Bible that illustrates this. That is the story of Cain and Abel. It is just a few short paragraphs but it contains a lot of truth. The story is found in Genesis 4:2-8. Let’s read it.
“Now Abel kept flocks, and Cain worked the soil. 3 In the course of time Cain brought some of the fruits of the soil as an offering to the Lord.4 And Abel also brought an offering—fat portions from some of the firstborn of his flock. The Lord looked with favor on Abel and his offering, 5 but on Cain and his offering he did not look with favor. So Cain was very angry, and his face was downcast.
6 Then the Lord said to Cain, “Why are you angry? Why is your face downcast? 7 If you do what is right, will you not be accepted? But if you do not do what is right, sin is crouching at your door; it desires to have you, but you must rule over it.”
8 Now Cain said to his brother Abel, “Let’s go out to the field.” While they were in the field, Cain attacked his brother Abel and killed him.”
We do not know why Abel’s offering was pleasing to God and Cain’s was not. Hidden in the story is the idea of sacrifice. How did they understand the idea of sacrifice? This is far before any culture had conceived of that idea, and yet somehow they just knew. There are parts to sacrifice here. The first is that relationships require sacrifice, plain and simple. The second is more abstract; give up something you have now, for something you want in the future. So you’re saying if I will work hard on my education now, I will have more marketable skills when I am finished? Well, something like that.
We all know people who seem to have everything going right for them and we wonder why we are not having the same results when we are giving 100% and making all of the right sacrifices. In a sense, their sacrifice is pleasing to God and ours is not. The important part is what comes next. Cain let that destroy him, and his brother. Now think of that Laffer Curve again. At some point Cain’s sacrifices were not yielding the results (rewards) he wanted. So, he just stopped caring, which started a rapid downward spiral that resulted in murder. Of course, my response has never been so extreme but I have thought, “Why bother?” when my efforts are not getting the results I had anticipated.
What are some of the expectations you might have? What things have you given up on because they were not yielding the expected results?
More recently I have tried to dial back my expectations, as well as look at the other, not- so-obvious results. Maybe others are benefiting from this sacrifice or maybe the benefits are not in the ways I had expected. I would encourage everyone to think through this concept before you reach the point where you start to question if it’s all worth it.
As we continue into the new year, our expectation will shape how we interact with those around us. I hope and pray that they will do so in a way that is good for us now and our future self.