Economics, as the science of human action, can be applied to self-improvement. Perhaps the essence of self-improvement is that if one sacrifices for the future, the sacrifice pays dividends. Whether one’s focus is on working out, eating healthy, or building better habits- delayed gratification wins out against the pleasures of the here and now. This idea is so significant that Tyler Cowen, in his book, Stubborn Attachments, argues that opportunities for compound growth should be the primary focus of society.
Saving for the future is important as a society because money that is not spent on consumption is instead able to be invested in enterprises that increase productivity, allowing subsequent generations to take advantage of compound interest. This compound interest is valuable because it allows humanity to have significant gains if society can take advantage of it. At 8% interest, over 9 years, the initial investment doubles. Failing to take advantage of the gains from higher savings is, in effect, deadweight loss. The limitation of social willpower to delay spending acts as a price control on high return-on-investment behavior.
This is even more true when relating the principle of deadweight loss to failing to invest in oneself. The limitations on one’s willpower to delay gratification acts as a price control on high impact behavior that will increase one’s overall well-being. If someone has fourteen waking hours each day, earns 25 dollars an hour for 8 hours, and spends the rest of the day engaging in leisure, their wealth and skills will be eclipsed by someone who spends two hours of their leisure time learning skills that will result in higher hourly pay in the future. Years down the line, the person who sacrifices in the present in pursuit of a brighter future will likely have a better financial situation than someone who chooses to remain stagnant. The same can be said for other realms of human experience.
When individuals look not just to immediate pleasure, but instead to longer term satisfaction, they become better off, both in terms of their skills and attitudes. Albert Bandura, a prominent psychologist, pioneered the concept of self-efficacy. Self-efficacy, more commonly known as self-confidence, is built by confidence about one’s acquired skills. Working hard and achieving things makes people feel good about themselves.
Mastery, the progenitor of self-confidence, is the result of deliberate practice, according to Angela Duckworth. Having specific goals, monitoring progress, taking feedback, and improving all deal with the uncomfortable, with the threat of failure. Getting into the flow state; the high impact state where one can recognize one’s mastery; requires putting in the often-uncomfortable work to get to that point.
One’s habits create feedback loops. For instance, if someone takes on debt, they must pay off the interest in addition to the principal. By contrast, when people get into the habit of delaying gratification and looking for improvement, they can commit more of their time focusing on the future and are able to reap the benefits of looking forward. Working on oneself begets being able to get farther ahead.
Isadore Johnson is a campus free speech advocate, an economics and philosophy student, and regional coordinator for Students for Liberty.