The Rule of Diminishing Marginal Return

There is a well-known law in economics called the ‘Law of Diminishing Marginal Utility’, which states that as consumption of a good or service increases per unit, the satisfaction derived from consuming an additional unit or more will lead to a subsequent decline in its overall utility. In other words, the more you consume, the less satisfied you will be with each additional product or service you purchase. The first thing you buy, use, or consume will be the most satisfying but the 2nd, 3rd, or 4th unit of the same item you utilize will not be as useful and could even not satisfy you at all.

This fundamental law in basic economics is one that is worth memorizing because it makes total sense. The first chocolate bar you consume will be delicious and fulfilling. You may not be satisfied with just one chocolate bar so you may end up eating another one since the first one was so tasty. However, anyone will tell you that the 2nd chocolate bar will not be as tasty or satisfying as the 1st one and you may even end up with a stomachache from eating too much chocolate if you are not careful.

The ‘Law of Diminishing Marginal Utility’ does not just apply to economic principles but goes far beyond that in terms of being applied to human psychology. The act of consumption, I would argue, is not just an economic one but also applies to the psychology of choice and how we live our lives. Everybody is a consumer in one way or another whether it’s the air we breathe, the water we drink, or the food we eat each day. Without any consumption, we would not survive but it is our choices that define our consumption habits and how we behave not just as economic actors but as human beings.

In a psychological context, instead of calling it the ‘Law of Diminishing Marginal Utility’, I would refer to it as the ‘Rule of Diminishing Marginal Return’, which is similar but discussing more how it’s a rule of life that the more we buy of something, the less return on that investment we will get out of it. The first of something whether that’s the purchase of a new car, a first trip to a new country, or the first time you try a new cuisine. These experiences will captivate you and do its job of putting your happiness level to a 9 or 10, but it’s a rule of life that it won’t stay there. While the memory of that experience will provide you with satisfaction and joy in its remembrance, your psychological state will revert to the norm of being level in terms of happiness or satisfaction with life. You may try to buy or consume more of something to recapture that feeling of happiness but that would actually be counterproductive in the long run and actually create false expectations compared to the first time you purchased or consumed that activity, experience, food, or drink.

How do you avoid the marginal returns of consuming, buying, or eating too much? Well, that is not easy to do but that is part of being a mature and responsible adult. You must have enough willpower and be able to reason with yourself that one more plate of food, one more drink, or one more car will not do the trick in giving you happiness. You must realize that your base level of happiness as a person won’t change as a result of consuming more and it may end up backfiring by causing your satisfaction to be lower because you consumed too much in the first place.
Being able to limit your consumption and controlling your vices will make you better off. If you can master your desires or your urges, then you can focus on bettering yourself or making you happier through more sustainable means. If you are working on personal projects, devoting yourself to a volunteer cause, or working on improving yourself mentally and/or physically, that kind of satisfaction will have a higher return on investment than just mindless consumption.

Consumption of goods and services may spike your happiness and satisfaction levels in the short run, but that kind of joy is short-lived and can often feel isolating if you are not sharing in that joy with others. That is why a meal with friends or family is often much better than eating by yourself. It’s why travelling with a close friend will generate more memories than a trip by yourself. It is not wrong to sometimes treat yourself to a nice meal, a nice trip, or a new gadget but shared experiences will make you happier and create more memories than those times that you were on your own in consuming.

One should carefully watch what they consume and monitor how much per day, per week, per month, and even per month they are consuming whether that’s food, drink, goods, etc. Everything in moderation is a good way to be as an adult and if you want to abstain entirely from consuming something, then that is an admirable thing to do as well. The worst thing you would want to do is to become overindulgent or overly reliant on a consumable good to make you happy or give you long-term satisfaction in life. You know better than anyone else the limits of your consumption and that true happiness is derived through shared experiences in life and of challenging yourself to be a better and more developed person.

In the long-term, I believe you get increased rather than diminished return through producing instead of consuming, by challenging yourself mentally and physically, and sharing yourself with others whether that’s through a good meal, a volunteer experience, or a worthwhile group project. All the chocolate and ice cream in the world won’t add to your happiness but would rather detract from it. A bowl of ice cream or a chocolate bar will satisfy you for a few hours, but you eventually will be back to that same level of happiness homeostasis that you had previously.

Instead of looking to keep yourself content or happy all of the time, know that happiness is not everything in life and that you benefit more from the hard work and the struggle that you put yourself on a daily basis than of just sitting on the couch and eating ice cream until the end of time.

When you get to that 2nd or 3rd bowl of ice cream, you should realize that you’re starting to get a stomachache and that you should stop yourself before you get sick. The diminishing marginal return of trying to seek out happiness through ice cream should be counteracted by getting off the couch and into the gym to start working out those extra calories you just gained.

By embracing the struggle of a gym workout and burning off all that ice cream, you’ll be sacrificing that short-term happiness for that long-term struggle but eventual satisfaction of improving yourself physically as a person and making yourself happier and healthier in the long-run as a direct result of your choices and decision-making. You should not be afraid to indulge a little bit every now and then but remember that life is better experienced in moderation and you should always watch what choices you are making as you go through your life as both a consumer and a producer.

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What can the creative process give us?

Anything that is done in the creative process takes effort and hard work. Any work of art, any piece of music, any lengthy novel took days, weeks, months, and even years to create. The creative process allows any person to express oneself in any way they see fit. The idea to keep in mind is that it is best for somebody to discover what he or she would like to create based on what his or her interests are. They then must discover for themselves what exactly they are good at creating and what they have a passion for doing. Being creative cannot be forced on someone.

The person in question has to decide what they enjoy doing and how far their talent can take them. Sometimes, the person can discover his creative vocation on his or her own but other times, it’s often the recommendation of a close friend or family member who gives the person inspiration to continue on with their craft. The key to remember about the creative process is that it can add value to people’s lives and also provide substantive meaning for any human being.

Being creative allows you to step outside of yourself and observe the external world in some way to shape it in a way that you see fit. Whether it is painting, writing, sculpting, etc., you’re putting yourself out there to see how you can do it differently and how can you create something truly unique. The creative possibilities out there are infinite and it’s important to choose a hobby or interest that appeals to you and which you can devote serious time to.

Some other traits that you can develop besides being observant and aware of the world around you are to become more collaborative and open to learning from others. A creative person will learn from others who have come before him or her in order to develop themselves as an artist, writer, builder, etc. Without copying them directly or replicating their kind of work, a creator will take what they have learned and studied to develop their own style or add value to their field. You don’t have to become the next Mozart or Rembrandt but you should try to innovate or change up the creative field so as to do something that will be remembered in the future.

Collaborating with other creative people and working alongside them or just to learn from them can make you more skilled in your work. You can learn a lot of valuable lessons from other creative people and they can mentor you based on their years of experience if you’re just starting out. Even if you suffer setbacks or false starts, knowing that you have a network of people similar to you in your creative world who can give you advice or a new perspective will give you the extra motivation to continue forward and learn from your mistakes. Through collaboration, you’ll learn to be less defensive and tame your ego so that you can learn and become better at your creative vocation.

Harnessing your creative energies can make you more outgoing, more connected to the world and can make you more humble. In a world that seems to be moving faster and faster, being able to slow down, observe your surroundings, and collect your thoughts is a great way to fuel your creative impulses. While we cannot control much outside of our own choices and decisions, harness your creative abilities will give you a sense of control over the external world. You can also gain a lot of satisfaction from putting something out into the world even if it never gains popular recognition. To keep it as a healthy endeavor, exercising your creative abilities should never be done for the possible fame, fortune, or notoriety of it but rather for your own benefit.

Without any kind of creative outlet, humans can stagnate both mentally and physically. People can often be placed into two categories: producers and consumers. We have the capacity to do both but we are often told by the larger society and culture to consume, consume, and consume some more. While there’s nothing wrong with consumption within reason, being able to channel our energies into a productive endeavor can be good for both the mind and the body. This is especially the case when you’re working to solve a problem or to make life better for people. You don’t know what your own potential or capacity for creativity is until you begin to do it. Everybody has the ability to be creative but they have to figure out where they can contribute the most to an idea, a project, or a work of art.

There has never been a better time in human history to be a creative individual. The advent of the Internet and global social networking has allowed people of all backgrounds to express themselves in various ways. More than ever, the average person is a website, a YouTube channel, an eCommerce shop away from sharing their creativity with the world at the click of a button. While the creative process is long, challenging, and comes with no certain reward, the benefits to a person’s mental and physical health cannot be overstated. The Einsteins, Beethovens, and Rembrandts of the world knew that their creative contributions would change the world in one way or another. They did it not just for the world though but their own sense of fulfillment and purpose. Instead of asking themselves what they could receive from the world, they thought instead of what they could contribute to the world with their individual talents.

Being creative, innovative, and experimental comes with risks but also a number of rewards. Even if you fail or don’t reach your goals, you will still learn a lot about yourself as well as what you are capable of. The key is to keep working at it to find out what you are skilled at whether that’s being an artist, a writer, an architect, an engineer, etc. Everybody has a creative flame within them that can be harnessed and molded. You just have to figure out for yourself how to develop, practice, and become proficient in your craft throughout the creative process.