Pessimism is pathological?

Published: Sat 21 January 2023
Updated: Tue 24 January 2023
By steve

In Markets.

Optimism is us

Eric Blair (better known as George Orwell) said “Any life, when viewed from the inside, is simply a series of defeats.” An old friend of mine, somewhat given to pessimism, always used to argue that only people who were clinically depressed had a realistic view of the world around them. Ten percent of all adults in developed nations are prescribed anti-depressants.

Most of us are not going to grow up to be Nobel Prize winners. We may get a few gold stars as kids, but these hardly prepare us for the realities of life. However good we are, we end up in the company of people who are at least as good as us, something which is harder to bear the more talented one is. At least the school duffer has his delusions of competent rudely shattered at a stage when his self-image has not ossified.

Genes have a lot to do with unhappiness. They are, famously, selfish. They drive us in various ways, but for their benefit, not ours. Heartache invariably results from following our instincts.

From a practical point of view, we need to be optimistic. Our ancestors had to believe that if they went out hunting they would come back with something worth eating. Even if hunts had failed for a fortnight, how could they do otherwise if their survival depended on it. Probably, the huge problems we have with a correct intuition about conditional probabilities is a result of the survival of our ancestors depending on our not understanding them. When we bet, we want to guess the winner and bet the farm on our guess. It took until the 1950s, when Kelly derived his famous criterion, that we understood, properly, why that’s a bad idea.

Politicians are duty bound to be optimistic. Nobody gets elected by saying that some new policy has only a 55% probability of making people better off. To sell it, the politician has to convince voters that it will be a sure-fire success. To convince voters, politicians first have to convince themselves: Corbyn’s failure was the failure of a man who had campaigned all his life against membership of the EU but was elected to lead a Labour Party that had to support remaining in it at the 2016 Referendum. I don’t even think that people like Boris have to lie about their support for these policies. They just have a facility to not understand the arguments against a policy when success in their career depends on doing so.

Sorry, I almost typed the “B-word.”

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