(Excerpt from Same As It Ever Was by Morgan Housel)
We tell ourselves stories about our potential for progress because if we’re realistic about how common failure and pain is, we’d never get off the couch.
Few would start a business if they were honest with themselves about their chances of success or how difficult the road to success will be.
Few would be as optimistic about the American dream if they took a cold look at the statistics around income mobility and wealth disparity.
Few would try to beat the stock market averages.
No one would buy lottery tickets.
But they do all of those things. I do some of them, too.
The idea that most people are overly optimistic about their own future – even if they’re pessimistic about others’ – shows up all over history.
In his book Fantasyland, Kurt Andersen argues that a founding virtue of America is its willingness, even desire, to believe things that aren’t true.
It started with the whole idea of the New World, when 16th century Europeans were told of a magical land across the Atlantic filled with abundance, only to find a malarial swamp when they arrived.
It continued with things like P.T. Barnum and Hollywood. Day trading, advertising, and political rallies.
“From the start, our ultra-individualism was attached to epic dreams and epic fantasies—every citizen was free to believe absolutely anything, or to pretend to be absolutely anybody,” Andersen wrote.
People believe things that aren’t true, are only loosely true, true but improbable, or true but lacking important context. To do otherwise hurts too much. They tell themselves stories, find statistics, and surround themselves with incentives to make their beliefs seem as real as possible.