The Seduction Of Pessimism
“Pessimism isn’t just more common than optimism. It also sounds smarter. It’s intellectually captivating, and it’s paid more attention than optimism, which is often viewed as being oblivious to risk.”
“Tell someone that everything will be great and they’re likely to either shrug you off or offer a skeptical eye. Tell someone they’re in danger and you have their undivided attention.”
Daniel Kahneman: “This asymmetry between the power of positive and negative expectations or experiences has an evolutionary history. Organisms treat threats as more urgent than opportunities have a better chance to survive and reproduce.”
“Pessimists often extrapolate present trends without accounting for how markets adapt.”
Remember the story from chapter 10 about the 1970s oil crisis: pundits failed to account for innovation in fuel efficiency and cheaper, more efficient oil extraction.
Similarly, in the 2000s, as oil prices increased, certain types of oil extraction became economically feasible such as fracking.
Necessity is the mother of all invention and humanity is endlessly innovative. People respond to adversity and problems with new and novel solutions.
“Threats incentivize solutions in equal magnitude. That’s a common plot of economic history that is too easily forgotten by pessimists who forecast in straight lines.”
Progress is slow, but setbacks and disasters happen quickly and impact fully. “There are lots of overnight tragedies. There are rarely overnight miracles.”
“Growth is driven by compounding, which always takes time. Destruction is driven by single points of failure, which can happen in seconds, and loss of confidence, which can happen in an instance.”