Friday, 6 September 2013

What is the point of being frugal? The concept of opportunity cost. The benefits of expanding your range of vision. The rational approach to self-development

Defending poverty as virtue lacks credibility unless the preacher himself is destitute, healthy, and happy. That phenomenon is so rare that few men attempt to imitate it. Monks living in monasteries in Italy or France do live in relative poverty, although their situation cannot be compared to the extreme indigence of the population in some African countries.

What is the point of being frugal?

While poverty seems an unattractive lifestyle to most individuals, frugality is increasingly gaining ground. The idea of making more with less resources appeals to those concerned with ethical questions. The personal freedom that ensues from thoughtful consumption possesses the charms of a sound philosophy and the practicality of immediate benefits.

It is unfortunate that the issue of cost reduction does not cross the mind of most people when times are good. Frugality, as a lifestyle choice, generates its greatest advantages precisely during favourable periods when saving seems superfluous, worry unnecessary, and modesty redundant.

Indeed, one should ask, what is the point of being frugal? Why should you waste any opportunity to enjoy yourself to the maximum extent? A man only lives once. Does he not owe to himself to have as much fun as he can?

Should you not devote all your resources to pleasurable activities? As long as you can afford it, why should you not savour your days travelling around the world and staying at the best hotels? What is the purpose of making money if you cannot spend it on doing what you love?

The concept of opportunity cost

Those questions are, to an important extent, unfair and unrealistic. A man who complains about not being able to exhaust his possibilities lacks proper perspective. Every choice implies renunciation to an infinite number of alternatives. Every expenditure consumes resources that can be employed otherwise, a concept that is known in economics as "opportunity cost."

The cult of uncompromising and immediate pleasure rests on three mistaken beliefs. If you choose to think only short-term, these three convictions possess irresistible appeal.

The benefits of expanding your range of vision

However, if you expand your range of vision, you will easily discover the dark side of an easy life. Watch out, since the following three ideas may wipe out your career, health, and material resources:

  • The delusion of stability: the belief that the future will be similar to the present and that little change is to be expected.
  • The delusion of invulnerability: the conviction that a man can cover all his risks through insurance and social security.
  • The delusion of moral neutrality: the idea that all lifestyle choices are fundamentally equal, that there are no superior or inferior ethical values, and that anything you may decide is perfectly fine.

Those three deceptions have induced the exaggerated consumption that is burying thousands of men under heavy debts that could have easily been avoided. Those dangerous ideas permeate our culture and dominate our conversations. The time has come to face them with courage and assert the truth.

For more information about rational living and personal development, I refer you to my book The 10 Principles of Rational Living


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