The Loss of Innocence

I cannot help notice the difference, between when I was in elementary school and now.

Obviously, you say.

Yes, it is. But I do like to think about obvious things, as from "a grain of sand", we can see the world.

When I was young, I was care free. I eat what I like--no veggies, tons of butter, all sweet things. I could sit in front of TV for hours never feeling guilty.

Now, before I pick up the cookie this afternoon, words like diabetes flash through my mind. I still sit in front of TV (actually computers) for hours, but full of guilt. I make decisions carefully, painstakingly evaluating the links between cancer, high blood pressure, heart disease and all the things I love to do, and on top of that, I factor in model risks, statistical errors, publication bias....

So from no rules, I began to realize there are rules. And from there, I realize it is not enough to follow some simple rules, but rather a network of complicated rules, and finally, I am not even sure if those rules were accurate.

What a messed-up life! I confess it is, in some sense. You can probably tell, loss of innocence does not stop here. Career, family, love, social, and other aspects do not evade a similar fate.

Knowledge is power. I do not deny that, but it is seldom a power we can control nicely. More often than not, it is a burden.

When we talk about decision making in economics, we often speak of the kind of person as I was in elementary school as "naive agent", and we talk about them with contempt---we believe it is undesirable. Our mission is to inform those naive agent, let them come to grip with the reality, eliminate their irrational exuberance, push down their excessive optimism, and make them "educated". I was an advocate. I believed in the centrality of being informed.

But now I wonder. If a person can be free of worry for decades and the cost is a decade of low consumption, is it necessarily worse off? I would totally be up for that. I am aware some people do lots of welfare analysis for this kind of things, and show that it is not desirable. I think these people have a poor understanding of economic theory. Utility functions are used to model how people make decisions, and their values cannot be compared when it is a different person, or that same person's perspective changes. If we remember how utility function is constructed, it is so constructed that a person with a certain perspective, would act as if he is maximizing the utility function.