16 Jan Balance in the asset market and romantic relationships: When to worry?
After a long time, I reunited with my university friends. I had a wonderful time, and a few things became evident. One, after much laughter and friendly teasing, is that time flies far too fast. Nothing surprising for nostalgic gatherings like these, though. Perhaps the only notable difference (for the better) was that we didn’t indulge in alcohol this time.
Now comes the interesting part (I hope). After exchanging stories and thoughts, I reflected on how different professions could explain why a 90-year-old man might marry a 20-year-old woman. Psychologists, anthropologists, and sociologists would surely have diverse and intriguing insights. But, as an economist, I believe we also have something valuable to contribute. Since this space remains free and “sovereign” (for now), I’ll take the liberty of setting aside my fondness for fossil fuels for a moment.
When you work eight hours a day and can buy whatever you desire, you probably feel you’re living a fair life. In economic terms (the complicated version), you sell your labor, receive a salary, and then purchase goods and services that bring you happiness. It’s a fair exchange of assets.
Life can be viewed similarly. When an elderly man marries a young woman, he often exchanges his material assets (house, car, jewelry, etc.) for “human” assets (beauty, youth, etc.). Markets balance themselves as people trade the assets they possess: intelligence, kindness, humor, youth, homes, cars, jewelry. At the end of the day, we all exchange assets in pursuit of happiness.
But when does this balance break? When one party, like in any contract, feels they’re “giving more than they’re receiving.” That’s when you, sir, madam, young man, or young lady, should start to worry. Filial love may be infinite, but romantic love? It’s fundamentally transactional. Or tell me, when have you received more than you gave?
When you sense that the assets you contribute to the “company” called “relationship” outweigh those offered by the other party, the partnership runs into trouble. That’s when equity needs to be renegotiated. Put simply, when you feel you’re not getting back what you put in, it may be time to walk away.
If that happens, should you worry? Not too much. There will always be markets where you can exchange your assets or trade them for others of equal value. The wise (and perhaps prudent) thing is to ensure you receive fair compensation. Otherwise, your life could become a nightmare because: You won’t receive what you gave, or your partner won’t feel satisfied.
A romantic relationship, like any market transaction, is an indefinite cycle of give and take. When that balance breaks, prepare for a market adjustment.
S. Mauricio Medinaceli Monrroy
La Paz
January 26, 2011.
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