I think you meant "diminishing marginal utility". The law of diminishing marginal returns concerns employees not goods consumed.

Though not specifically relevant to your post, this "law" doesn't always hold. Some goods have a utility threshold that must be crossed before they become valuable or increase in utility (e.g., various medicines and antibiotics). Money operates similarly, i.e., its utility does not necessarily diminish, much less in monotonic fashion. Assume that if I make N dollars, I may be able to afford popcorn or I may be able to afford butter, but not both. Let's also assume that I derive little satisfaction from popcorn or butter alone. However, if I make N+1 dollars, I can afford both popcorn and butter from which I derive a great deal of satisfaction. The addition $1 has greater utility than the Nth dollar I had previously.

That is extremely flawed logic. You picked an arbitrary example to make your point, but your point requires excluding other possible uses of the Nth dollar to make any sense.

"Oh, with 15k I could buy a compact car that I wouldn't like much, but with 30k I could buy an entry level sports car that I would enjoy a lot. So the second 15k has greater utility than the first 15k."

Does this make sense? Of course not. The first 15k can buy you reliable transportation which is more valuable than the fun from a sports car. 15k can also pay for a year of housing and food in many places, which has way greater utility than the ability to drive like a jackass on the highway.

With your N dollars, you might not enjoy the popcorn without butter, but you could also buy something else to eat, or some fuel, or any number of other things that have more utility than butter on your popcorn.

Every dollar adds additional things that you could purchase. But each dollar comes with declining utility. First you get necessities, then wants, then luxuries. If you have insufficient dollars to buy popcorn with butter, you probably need to spend your money on something now useful than popcorn anyway. Popcorn is a want and you probably haven't met your necessities.

The dollar that pays of my payday loan, or gets me a security security deposit at an apartment, has huge marginal value.

Growing from subsistence to investment has near infinite. Marginal utility.

You could just as well say that the cent that buys you a soda has a bigger marginal utility than the previous one. Sure, maybe in the context of that one transaction, but not in any general way.

Except that paying off your proximate debt and securing a place to live is far more important, from a Maslow sense, than buying a soda?

Doesn't matter, the principle is the same.

Depends, are you thirsty?

Even in a (totally unrealistic) scenario where N dollars are "useless" to you, but N+1 get you something of great value, it's not true that the (N+1)th dollar has greater marginal utility than any of the other N dollars, because you need all those other dollars to buy the thing. In other words, the previous N dollars weren't actually useless: they enabled you to obtain the (N+1)th dollar. Without them, that (N+1)th dollar is just your first dollar.

Sometimes there's a psychological difference though. Say you have $8 in your pocket, and there's a movie you like to see in the cinema nearby. The ticket costs $10. You know you won't get that $2 in a reasonable timeframe - maybe it's your only evening off, so even if you get some more cash tomorrow you won't have a chance to see the movie. Maybe you also don't feel like begging strangers for change. In this situation, you may find yourself wishing for those $2 very much, and after realizing you can't get them, you'll say "fuck it, I may as well spend my $8 on some pizza or beer" and then do so.

Maybe that last $2 don't have greater marginal value than the $8 in your pocket, but that $8 loses its perceived value the moment you realize you won't get additional $2 in time.

It's not a hypothetical situation, by the way. I've been in those several times in the past, and followed exactly the same pattern of emotional reasoning.

Probably OT, but all things being equal the person that saves the $8 until next week's night off will probably end up in a better place in life than the person that gets a slice of pizza and a beer.

Yeah you're right, thanks for catching that.

Yup.

If you look at table 3, which is a study of the museum going group, you can actually see that SWB (subjective well being) is mostly correlated with household income and material affluence. However in table 3a, we can see that SWB is negatively correlated with material striving.

In other words, people who are concentrated on making money are the people who don't have money and are also unhappy.

People who value time are the people who already have money and don't have to worry about it.

The conclusion I would make from this is that the more money, and implicitly more time freedom you have, the happier you are. If you are trying to make money but don't have any, you're not happy.

Which happens to correspond with an old saying:

"Money doesn't make you happy, but lack of money does make you unhappy."

> Mr Micawber's famous, and oft-quoted, recipe for happiness:

>

> "Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

- Charles Dickens, David Copperfield

The trick is to stay at nineteen nineteen and six once you start making twenty five pounds :)

Yep.

Check out 4:06 from this scene from "The Aviator": https://www.youtube.com/watch?v=1Z1pPyarKhA

Lady: "We don't care about money here, Mr. Hughes"

Howard Hughes: "That's because you have it"

There is one particular restaurant scene (S2E05) in FRIENDS dealing on the same subject.

It isn't at all groundbreaking, but we haven't figured out how to apply the concept to society very well. Bertrand Russell's 1932 essay on the topic has been discussed here before: https://news.ycombinator.com/item?id=6513765

What we need is an inversion of the "diminishing marginal returns" concept to permeate economic theory. Maybe some people just call that Keynesian theory?

I think the real takeaway isn't about upper middle class versus regular middle class. Rather there is quite a lot of negative value / lost opportunities by drawing the poverty line so low.

>"diminishing marginal returns"

I came to a different conclusion. The wealth of time (total man-hours or aggregated lifespans) is more evenly distributed across a population than is the wealth of money. Therefore, to the extent that happiness is influenced by comparing how well-off you are vs others, a person picked at random will be pretty damn close to the same standing as whoever is the Time-Richest Person in the World. But they are FAR less likely to be anywhere near the Money-Richest Person in the World.

The Money-Richest Persons in the World don't have to trade nearly as much of their time to complete maintenance tasks that few people enjoy doing.

I think it's even more dramatic than that. Wealth conveys the ability to explore alternate experiences with more efficiency.

What I mean by that is the ability to either fund "vicarious" experiences. ("If I worked on this project, I'd do about the same thing as that person, so I'll hire them to do it.") As well as the more conventional kinds of acceleration like finding it easier to more frequently have more peak and different experiences like travel.

But many of them work all the time to ammas their money

A wealthy person is much more likely to be time-rich than a poor person, though.

I'm sure I've read that this has changed in recent decades, the poor are now time rich whilst the rich are working much longer hours.

That's a funny shaped curve. Sam Walton (Walmart) was time poor. His kids are time rich. Similar for kardashians.

Well, when you're running a company or are an executive, obviously you will be time-poor and money-rich. But in general, having more assets means you'll have more free time. And arguably, the time a company owner spends may be be being spent exactly how they want to spend it, in which case they aren't time-poor at all.

Remembering my high school economics, from too many years ago, we used the term backward bending supply curve of labour - https://en.wikipedia.org/wiki/Backward_bending_supply_curve_...

The corresponding colloquialism is "Variety is the spice of life."

That's why I refuse to do a single minute of overtime even if it is paid. I've told employers to fire me if they feel like I should be staying longer and none of them have yet. If I ever need to make up time or do extra work, it's usually because of mismanagement and crappy deadlines as 8 hours of solid work a day is a lot, nothing should be "late".

Free time is absolutely the most valuable currency. If you can practice an instigative hobby and augment that hobby with the good money you make, then you've got it made. I have a bloody ton of hobbies and I can't wait to get out of work to work on my own stuff.

Seeing my days/life in two parts as stability (day job) being fuel for my hobby has helped me deal with my identity crisis when I got completely turned off from coding. It was also my hobby so I was always coding, but once I lost that I didn't know what to do and I hated my job. Once I saw it as fuel, no matter what day job I have, is now in context of a hobby.

What is the definition of an "instigative hobby"?

Something where you create tangible value. Video games, movies, collecting, etc are all consumer hobbies. Leather making, coding, music, knitting, etc, are instigative. The main difference is it's difficult to relate to other people about consumer hobbies unless you consume the same things. With instigative hobbies you can teach people and talk about them to others who know nothing about it. I'm not saying either is better than the other, it's just harder to relate to people when all you do is consume.

I take it that you coined this term all by yourself? This is the only use of "instigative hobby" that google knows about. I think you need a better adjective than instigative. Nothing about instigative makes me think the distinction is between the consumption/creation of goods. I don't agree with your conclusion but at the very least "creative hobby" seems like the obvious choice. I am not sure why I can more easily teach and talk about woodworking to someone than I could if the subject was video games or wine. This certainly does not match up with my experience with my hobby of book consumption or the experiences of my friend who is a wine sommelier. But most importantly I am not sure why I would prefer the creation of relationships where the dynamic is based on a knowledge asymmetry in my favor.

>This certainly does not match up with my experience with my hobby of book consumption or the experiences of my friend who is a wine sommelier

I could not think of someone I'd get along with less. You must be much older than me. This is exactly what I'm talking about. I'd never want to listen to someone tell me about the history of something, that's boring, that's regurgitation, I can google that. If you've made wine before though, that's definitely interesting.

I kind of agree about the wine sommelier, I don't want to go into that much detail about the history of wines. The movie "Somm" was enough for me. But I do like history, especially if it's directly related to the person I'm talking to, or the place I'm in.

This Reddit thread was one of the most interesting things I've read recently: https://www.reddit.com/r/history/comments/3zgffa/what_is_the...

And I'm in Phnom Penh now, having done the tour of the Killing Fields and S-21 prison. Learning about Khmer Rouge, Pol Pot, and even refreshing my memory about communism, the Soviet Union, Joseph Stalin, etc. I'm finding it all very interesting now.

But also I agree with the commenter above you, "creative hobbies" would make more sense than "instigative".

Where do you see me talk about the "history of something"? Or do you think that "history of something" is the only genre of books?

The normally used term is "creative hobbies".