Costs of Fallacy Mind to the Global Economics

Every day we make decisions that some are small, some are more important thus affect people’s lives. The average adult human brain weighs around 3 lbs. and every day the average person has around 50,000-70,000 thoughts that between 70% to 80% of those are negative so around 40,000 to 50,000. Negative thoughts in a day that need to be managing and filtering not a small task for any person. We should doubt our thoughts all the time. Our mind (thoughts) tricks us into that called fallacies (around 200 different fallacies listed). A fallacy can be defined as an incorrect argument in logic and rhetoric that undermines an argument’s logical validity. Biases are defined as the tendencies to think in certain ways that can lead to systematic deviations from a standard of rationality. Global economy losses trillions of dollars every year because of human-related (DUI) traffic accidents, obesity, crime, alcohol, drug addiction, and many forms of bad decisions by irrational individuals. Millions of people get themselves killed because they are not taken care of their lives properly. Hundred billions of dollars are consuming by the health sector also huge amounts go to prevent crimes by justice departments and military spendings but these scarce funds could be used to end poverty, increase GDP and well-being of billions of people all around the world. J. M. Keynes argued about “animal spirits” to describe the instincts and emotions that influence and guide human behavior. Keynes understood “in such an uncertain world, many decisions can only be taken as a result of animal spirits”. Conventional economic analysis encircles itself to rational, quantifiable facts. But in reality, economic decision-makers are frequently intuitive, emotional, and irrational. Bounded rationality is a concept proposed by H. Simon challenges the notion of human rationality. D. Kahneman & A. Tversky argued about how our minds play tricks on us. J. R. Shiller and G. Akerlof wrote the role played in our economy by animal spirits such as speculative fluctuations in asset prices, changes in investment levels reflect beliefs about changing prices and they believe people live by stories. R. H. Thaler and C. R. Sunstein show that we are all open to biases that can lead us to make bad decisions. The war in Vietnam cost the United States $843.63 billion (2019 dollars) in 1968 and 58,000 dead soldiers. Now, U.S. goods and services trade with Vietnam totaled an estimated $81.3 billion in 2019. U.S. foreign direct investment (FDI) in Vietnam was $2.6 billion in 2019. Iraq War spending (2019 dollars): $1.01 trillion, and U.S. military deaths: 4,410. US taxpayers have paid an average of $8,000 each. In Afghanistan, U.S. war spending (2019 dollars): $910.47 billion and 2,285 U.S. deaths. Around 100,000 Afghan civilians have been injured or killed. President Biden will withdraw all American troops from Afghanistan over the coming month of September 2021. The Stockholm International Peace Research Institute (SIPRI) estimated military expenditures in 2018 as $1822 billion globally. North Korea developed nuclear and ballistic missiles through 2020 on the other hand 60% of North Koreans live in absolute poverty making it one of the poorest countries on Earth, new research from Vienna University of Economics and Business make public. Obese people use healthcare services more frequently than most and need more specialty care visits. Providing medical services to deal with this problem can be a drain on healthcare budgets. Almost one in four people in OECD countries are obese. The U.S. spent $190 billion on obesity-related health care expenses in 2005. The United States spends $300 billion annually on police communities and incarcerates 2.2 million people. The societal costs of incarceration are estimated at up to three times the direct costs, bringing the total burden of the US criminal justice system to $1.2 trillion. The estimated cost of drug abuse in the United States—illegal drugs, alcohol, and tobacco—is more than $740 billion a year according to National Institute on Drug Abuse. The global gambling market is expected to grow from $465.76 billion in 2020 to $516.03 billion in 2021 at a compound annual growth rate (CAGR) of 10.8%. Around 1.6 billion people gamble throughout the year. 2 billion of the entire world population gambled at some point in their lives. Approximately 1.35 million people die in road crashes each year. An additional 20-50 million suffer non-fatal injuries, often resulting in long-term disabilities. According to a Stanford Law School report, around 90% of all motor vehicle car accidents are caused fully or in part by human error. Human error has an effect in 70% to 80% of industrial accidents, as well as in a substantial percentage of errors in healthcare. Institute of Medicine, part of the National Academy of Sciences, found that medical errors kill from 44000 to 98000 Americans annually. WHO reports that globally, hospital-acquired infections cause suffering to 10% of hospitalized patients. Medical errors hurt nearly 40% of patients in primary and outpatient care. Diagnostic and medication errors harm millions thus cost billions of dollars every year. Since the 1880s, the earth’s average temperature has increased around 1.2 degrees Celsius. Air pollution  is the fourth main risk factor of premature deaths globally and in 2013 cost the global economy $225 billion as lost labor. World Health Organization says air pollution kills 7 million people each year. OECD estimates that, by 2060, air pollution is expected to cost the global economy severely $2.6 trillion every year and air pollution will cause around 9 million premature deaths every year by 2060. Oceans soaked up most of the added CO2 from the atmosphere thus they’ve become 30% more acidic since Industrial Revolution causing a mass extinction of sea life around half of the world’s coral reefs have died in the last 30 years. Between 2008-2018, events related to climate or weather have displaced 22.5 million people annually and by 2050, climate change could be the cause of as many as 1 billion people emigrating. Deforestation has led to the loss of 46% of the world's tree. In developing countries, small farmers cut down trees and then burn them also Illegal logging is responsible for between 15% and 30% of all wood traded globally in the middle of $30 billion and $100 billion annually. Deforestation costs between $2 trillion and $4.5 trillion annually due to the loss of biodiversity. From politics to health and finances, humans can occasionally make decisions that irrational and we are eventually beginning to realize that irrationality is the actual invisible hand that guides human decision-making. All decision-makers around the world should take rational decisions as much as they can to decrease the harm to themselves and to society. The global costs of irrational decisions then could spend on poverty reduction, health, education, and UBI in order to reach a just society that Plato has written in his seminal book "Republic" nearly 2,400 years ago.