Diminishing Returns: Applying Economics to Life

Arnold Kling:

[P]ay attention to the law of diminishing returns. For example, the number of authors who write two books that are worth reading is at least two orders of magnitude less than the number who write one book worth reading. Most of the time, you should assume that if you've read one book by a given author then you do not need to read another. Too many people follow the opposite strategy--reading more books by authors they like.

Staying in the same organization for more than few years also puts you on the wrong side of the point of diminishing returns. Working in an organization is a learning experience. But, as with going to college, there comes a time when you need to stop taking their courses and proceed to graduate.

The law of diminishing returns probably applies to blogging and to reading blogs, but I'd rather not think about that.

Kling then gives some refreshing advice for people (like me) who are interested in becoming an academic:

My tip on becoming a successful academic is to be careful how you define success. Any tenured professor has a great life by most standards. However, the default sentiment in academia is bitter jealousy. The folks at lower-tier schools think they belong at top-20 schools, the folks at other top-20 schools think they belong at Harvard, and the folks at Harvard think that they deserve more recognition than the other folks at Harvard.

Once you get on the ego treadmill, not only do you become bitter, but you have to start viewing others not for their intrinsic qualities but for their usefulness as stepping stones. If you can stay off of the ego treadmill, then success becomes more a matter of being near friends and living in an area with the type of amenities you prefer.

Megan McArdle responds by describing how academia is often a zero-sum game:

In my experience, this is true; relative to other professions, professors don't seem to be having much fun. I've never seen a group of people--including investment bankers--more obsessed with status. What's the explanation? I can think of several:

1) The money is so low relative to the professions they might have gone into. Journalists also suffer from this bitterness. Interestingly, the more lucrative their current options are, the less bitter the professors seem to be--economists and engineers seem relatively cheerful compared to English and History professors.

2) It's so easy to tell exactly where you rank in the academic hierarchy. Well, I don't find it easy, but they all seem to. Unless you're very near the top, your ranking is reinforced every time you attend any sort of professional event. If you are near the top, you promptly switch to wondering why you're paid less than an entry level investment banking analyst.

3) It's so hard to switch jobs. Job mobility is so low that you can't salve your ego by telling yourself that your current job is merely a waystop en route to something better.

4) Academics have few alternative status hierarchies. Getting tenure is an all consuming process that leaves very little time for developing other hobbies. And the job virtually definitionally does not attract the kind of people who will be happy putting their career on a back burner to family or lifestyle.

5) Academics have virtually no control over where they live. They usually seem to go where the best job is, regardless of whether or not the local area suits them. In many cases, this further focuses them inward on academia, because there aren't all that many other people around who share their interests.

...it's all terribly zero sum. Any article a colleague gets into a good journal is one less slot for your articles; any good tenure-track job secured by a friend is one less job you an apply to. All industries involve competition for market share, of course, but few have such a fixed supply of both jobs and customers.

Unfortunately, I agree -- which is why I find Kling's advice so refreshing. I quit my job as an engineer to come back to school in hopes of becoming a college professor and sometimes get disillusioned by what I see in academia. It seems to suffer from many of the same problems I see in the legal profession -- obsession with ranking/status, temptation to sacrifice your personal life for the sake of your career, and a constant comparison of yourself with others. (Only academics do so with less pay, a more flexible schedule, and not much of a dress code.) I have concerns about the effects the culture of both professions can have on a person's character if you're not careful.

Bottom line: Choose the margins you measure your life success by very carefully. The same goes for the trade-offs you're willing to make in order to get there.