To whatever extent you have or will engage the study of economics in your life, I would be remiss if I did not stress the power and relevance of economics to improve your decision making and thinking in all aspects of life. There is no better way to understand human behavior.

So what is economics? It’s the study of purposeful human action. When humans acts, what do they do and why? What patterns emerge and why? Economics begins with the assumption of rational self-interest (everyone who acts does so because they believe acting is preferable to inaction given the knowledge they have at the time). This approach is called “rational choice theory,” and it is the most powerful lens through which to see and navigate the world.

Once you internalize and understand it, you no longer grasp for childish explanations for odd behavior. When a seat-belt mandate passes and accidents increase, economic helps you see why, rather than simply saying “people are dumb.” It forces you to do real thinking rather than let yourself off the hook calling people stupid or evil, even when they do the most apparently awful or irrational things – from terrorist acts to bizarre pricing schemes to wearing lots of bling. Rational choice theory doesn’t make anyone good or evil, but acknowledges that, regardless of their righteousness or lack thereof, they are rationally self-interested, and therefore their behavior communicates something of importance about them and the incentive structures they face.

Dig deep into this discipline and learn to think like an economist. I assure you, it will provide so many insights that break through superstition and dogma and make you better at what you do. You’ll recognize the incentives baked into the institutions around you – from governments to workplaces to social circles – and understand why people within those institutions behave as they do, and it can help determine whether it’s worth your while to change the incentives in those institutions, play the game as written, or opt out altogether. Be rigorous when you analyze the world.

Watch TEDxNewSt – Rory Sutherland – What is Value?

Watch Rory Sutherland: Life Lessons from an Ad Man

Watch Rory Sutherland: Perspective is Everything

Watch Subjective Value

Watch Opportunity Cost

Watch Profit, Loss, and Discovery

Read Money… Does It Have A Corrupting Influence?

Read 8 Lessons About Money I Learned From My Family

Read The Truth About Money

• Pick one of the pieces of content from above and publish a blog post explaining what you learned and how you intend to apply that lesson in your life.

1. Why does economic thinking matter for entrepreneurs?
2. What does economics have to do with human action?
3. What makes a thing valuable?
4. How are prices determined?
5. What do profits and losses tell us?
6. What is the relationship between value-creation and profit?
7. What is money? Is money good, bad, or neutral? Why?
8. How does the market process improve the human condition?
9. Is it a bad or unfair thing that most professional baseball players make more money than most school teachers? Why or why not?
10. What is opportunity cost and why is it important to every decision you make?