Use Consequence As Your Guide

There is an old idea that has always intrigued me. “A distinction without a difference.” The fundamental behind it is consequence.

Why would I care about a distinction unless it had different consequences?

Emerson described it differently and more eloquently, “A foolish consistency is the hobgoblin of little minds adored by little statesmen and philosophers and divines.”  It is from his essay, “Self-Reliance.”

Self Reliance is not the easiest read, but for free, you can have a copy. Self Reliance by Emerson

An extension.

Should I act on events that have no consequence for me, my community, or my country even? They are inconsistent with my needs yet consume time, energy, and maybe money. Those resources are not infinite.

Think about in terms of economics. As you know, economics is the study of how people adapt to scarcity. In my case, scarcity includes, interest, energy, time, and money. I know that I cannot devote a full complement of resources to everything that comes along.

I must adapt a tool from economics.

Tradeoffs

Life decisions invariably involve tradeoffs in favour of the decision that optimizes well-being. You can’t have your cake and eat it too, is an aphorism that we each have heard. You must choose.

It follows that decisions should be made based on expected consequence. Choose A over B because the outcome is more suited to my wants given the scarcity of my resources.

B, in fact,  might be a better solution and if this problem or opportunity was the only one I had to consider I would always choose it. No problem or opportunity in our lives is the only one. We must develop priorities so we can allocate resources better.

I must allocate my scarce resources such that the overall solution of all problems is optimal. Systemic optimization as opposed to specific.

Systemic optimization

The idea of optimizing systems is not new. In manufacturing it has existed for at least a century. One thing that has come out of it that relates to personal optimization is if you optimize one step, you tend to sub-optimize the whole. Optimized steps easily conflict with other steps. For example, if step 3 in your manufacturing process is optimized for speed, it may create a bottleneck somewhere else. The pieces build up because the other step cannot process the pieces at the speed they appear. You will have invested in a machine and now must invest in a way to store excess capacity., neither adding value to the whole. No gain so wasted resource.

While step 3 had been less than it could be, the overall system worked as well and with fewer resources.

Application to daily life.

There are many things to be interested in and concerned about. Unless you have a vast resource inventory, you cannot act on everything. Use consequence as you guide. be cautious of becoming attached to other people’s needs and consequences.

That Bill and Melinda Gates have divorced may be interesting, emotionally satisfying or not, possibly even instructive. Does it have consequence in your life or mine. No, it does not. Accordingly we should devote few of our resources to the story.

There are a great many things that fall between no consequence and immediate and serious consequence. We must allocate resources to them and ideally in proportion to their effect. We can’t tell for sure what the ultimate effect will be and so must monitor the allocations. We evolve an appropriate tradeoff.

The takeaway

Know your resources and their limits.

Know your priorities

Use consequence as the allocation guide.

Know how to improve your resource inventory. Both size and capability.

Understand that some problems change, and some are treatable but not curable.

Money is often the primary resource because it is measurable. More often, time and energy are the ones that limit the solution.

You can minimize your allocation problem by choosing to ignore things with no consequence.

Planning will help with priorities and allocation questions.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

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