Article published by José Miguel González Hernández in the September issue of La Gaveta Económica.
If you could look back on life, what would you change? The first premise to be able to do this exercise at no cost, we will assume that nothing else would be affected. It would be a surgical action by removing the undesirable. It is true that it is a very demanding premise at the same time that it makes things very easy for us. In fact, we would only remove the bad decisions, assuming that the good ones would have exactly the same effect. But we know that it doesn't work like that. In fact, when you have angels, it is because you also contain demons.
When you make decisions, you leave others to be made. That happens in all areas of life. But what is the secret to always getting it right? Well, (in)form yourself enough, make prospective scenarios, calibrate the measures along with all their effects and considerations, make a perpetual cost-benefit analysis and, above all, do not regret what could have been and was not. Now well. If you have made a mistake, correction is the best of the alternatives because stubbornness about circumstances that you know will only cause more damage is the worst of the choices. Another maxim to keep in mind is that universal decisions do not always work. What served in a specific moment in time and space does not have to generate the same effects under any other scenario. In this sense, in economics we talk about opportunity cost. Or what is the same, it is the cost of renunciation, including the benefits that we would potentially lose. In short, it is the value of the best unrealized option.
Given this concept, let us imagine, then, the field of action and influence that economic policy has. When should the tax structure of a region be modified? How will the collection and subsequent supply of public goods and services be influenced? How will the elasticity of the different parts of the market be altered in relation to the new decisions that have been adopted? Are they immune? No. They are affected and, in fact, readjust the expectations of action and results to be obtained, so the initial decision scenario changes as soon as it is made.
This is why, in addition to calibrating the different prospective scenarios of occurrence, the opportunity must also be incorporated into the equation when carrying out certain determinations. Those people and institutions that think that economic policy is like a mere change of parts of a motorized system, where everything continues to work exactly the same as before, must correct this belief because things do not work like clockwork.
Beginning to modify a fiscal policy without consensus will make part of the fabric, both productive and social, decide to mobilize their preferences. Furthermore, establishing uncertainty is giving greater complexity to a society that, in fact, already is. It is not about changing a part of the whole, a piece of the gear, no matter how minuscule it may seem, thinking that the rest would work in the same way. People and organizations are not mechanical parts that behave identically, not even with the same environment, whatever the pressure and temperature conditions. We are normally rational beings, but with peaks of high doses of irrationality (exuberant, many times). So, as a final part, a recommendation: Once the facts are recognized, it is not worth thinking that society was the one that was wrong. If all the vehicles are going against you, it is possible that you are the one who has taken the wrong road. In fact, providing oneself with opportunity is often more effective than the knowledge incorporated into decision-making.
