…and so do you
By Alexandros Sainidis
Self-help largely relies on marginal (small) changes you implement in your lifestyle. There is little benefit in eating healthy for a day. Doing so for months, however, has an immense effect on increasing positive effects and decreasing negative effects at the same time. At first this logic seems as a purely personal journey. In reality, this incremental logic applies on a global scale and has the power to turn the tides in every domain.
Staying within this topic, health is highly responsive to small changes, which explains why it is a core object in behavioral economics. While it is a very personal problem, there is also public health. Bottom-up: contagious behavior is seen as an object of regulation during pandemics, such as COVID-19. Increasing the mandatory distances to keep between individuals is an example of a marginal change. Top-down: WHO spreading word that there is a poor sleep quality epidemic is a relatively insignificant action. If the media, however, start echoing WHO, suddenly large populations are more aware and take small actions to calibrate their sleeping patterns.
Economics are flooded with instances of marginal changes with enormous outcomes. If one family is unable to pay the mortgage, there is no issue – it happens. When too many families can’t, however, suddenly a 2008 housing crisis is born. On the flipside, the FED makes marginal adjustments of interest rates creating waves of consequences in finance, banking and beyond. If the price of oil reaches the stratosphere, it’s marginal – because it is just one commodity. However, since electricity is produced because of it, and practically everything runs on electricity, its effects are huge. Time, not just scale, is also essential – most often proven by compound interest in debt and investments
The key aspect to note is that marginal changes can apply even in the most unconventional settings. It even applies to the Israel – Palestine war as its identity becomes increasingly religious. Why is it marginal? Because in our common, probably false, view their national identities are more or less indistinguishable from their faith already. However, the effects are enormous as this can easily attract myriads of foreign fighters, consequently drawing in more external agents. More extreme ones too.
To see how marginal changes work, look at the design of the system at hand
During a country’s elections, a winner-take-all system allows a handful of votes to determine the final outcome. If one plays poker betting all-in from the first round, that’s a game style that favors luck. If, however, the game is dragged, more decisions are based on strategy. Blame the game – not the player. If, however, a player can alter the system they are operating in, they may mobilize (or neutralize) small elements outside our collective attention as they sit dormant. It is like dropping breadcrumbs on the ground – the formerly unseen ants will appear all over them. They did not appear from nowhere – they were already there.
From Black Ants to Black Swans
Essentially, the accumulation of small events and elements are what compoundly add up to a large category of Black Swans. The so-called Black Swans are highly improbable events that are beyond the capacity of graphs, models and minds to predict. Once they happen, however, it’s much easier to trace them back to their source. It is easy to be judgemental post mortem. However, it is crucial to acknowledge “present bias”: people take into account payoffs closer to their present more seriously than future circumstances.
So what happens when a Global Catastrophe hits?
When we are living through good times we are hardly thinking of marginal actions and processes that would bring doom. During bad times, however, people and enterprises must live through conducting painful actions. These same actions are positive marginal changes that, when accumulated, will bring back normality. Of course not everything is reversible; environmental damage is most likely in this category.
Certainly, this does not justify controversial measures such as overly strict lockdowns and unproductive austerity measures, either. However, this is a message to keep up the good work, individually or collectively – just as some good-willed players designed the phrase “hope dies last”.
References
de Gruyter, C. (2024, March 7). Israel and Palestine are now in a religious war. Foreign Policy. https://foreignpolicy.com/2024/03/07/israel-palestine-hamas-gaza-religious-war/
O’Donoghue, T., & Rabin, M. (1999). Doing it now or later. American Economic Review, 89(1), 103-124.
Rice T. The behavioral economics of health and health care. Annu Rev Public Health. 2013;34:431-47. doi: 10.1146/annurev-publhealth-031912-114353
WΗΟ (2012). Sleep Problems: An Emerging Global Epidemic? 35:8, 1173-1181
