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HOPE and FEAR

HOPE and FEAR. The future tenses of “pleasure” and “pain.”. Pleasure and pain in the planning stage. Definitions from an Irish potato farmer. Qsub. QM. Probability. HOPE. Next year’s production. FEAR. Subsistence. If you have less than this, something very bad will happen to you. Qsub’.

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HOPE and FEAR

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  1. HOPE and FEAR The future tenses of “pleasure” and “pain.” Pleasure and pain in the planning stage. Definitions from an Irish potato farmer

  2. Qsub QM Probability HOPE Next year’s production FEAR Subsistence. If you have less than this, something very bad will happen to you.

  3. Qsub’ Qsub QM Saving reduces fear Probability THE ROLE OF SAVINGS Next year’s production

  4. Qsub QM QM’ Probability THE ROLE OF INVESTMENT Next year’s production FEAR LESS FEAR MORE HOPE HOPE

  5. BUT … Yeah, I know … Just play along Income (Y) = C + S + I or pretend for a moment that you’re not an economist If you must be an economist we could say Y = C + Sp + Ss, dividing Saving into precautionary and speculative motives Setting aside the economics definitions, the usual use of the words “savings” and “investment” are derived from separate psychological impulses

  6. We Save from Fear We Invest from Hope We Invest to get ahead We Save to keep from falling behind But … Holding Consumption constant, increases of Saving require deceases of Investment and vice versa At some point, Investing more will increase fear by reducing Savings.

  7. The farmer’s problem is to maximize a utility function whose arguments are Consumption, Fear and Hope, subject to Y = C + S + I I’m ready to sing now

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