For those of you entering 2017 with dread at the prospect of Brexit and a Trump presidency, here’s some comfort: things rarely turn out as bad as they seem. This is not just a sentimental cliché. It’s supported by social science.
Back in 2008, Christoph Merkle asked stock market investors how they’d feel if they lost money. After the crisis he asked them how they felt about the losses they had actually suffered. He found that their actual pain was significantly less than they’d feared. “Investors are able to cope with their losses much better than they expected” he concluded. Experienced utility was higher than anticipated utility.
This is consistent with a finding by Andrew Clark and Yannis Georgellis – that people adapt to most adverse events such as divorce or bereavement. We are psychologically more resilient than we think.
I suspect the same is true in politics. This is partly because the language of politics is hyperbole: each side overstates the extent to which victory for the other would be a catastrophe. Also, developed economies tend to be resilient to shocks; neither good policies nor bad have dramatic effects. There is, as Adam Smith said, “a great deal of ruin in a nation.”
Modest adverse effects, allied to our tendencies to over-estimate the harm of losses and under-estimate our ability to adapt to them, suggest a cheerful possibility: that Brexit and a Trump presidency might not be as bad as feared.
In truth, though, I suspect a lot of the pain we felt about last year’s political developments was not so much a fear about their likely effects as disappointment about what they symbolized. Victory for Trump and Brexit represented a victory for liars, racists and the closed-minded.
But perhaps there’s a solution to this, which we’ve known since the Stoics – to simply pay less attention to the corrupt and fallen world, to cultivate our own garden. Or as the greatest of those who left us in 2016 put it: “Forget your mind and you'll be free.”
Of course, there are massive objections to this advice. One is that it’s horribly complacent. It’s easy for us older, richer white people to ignore politics because we won’t bear its costs. The victims of Trump and Brexit will be the poor and ethnic minorities, not people like me. And in retreating from politics, we are in effect tolerating lies, injustice and economic inefficiency. If the best people become idiots in the original sense of the word politics will be dominated by the worst.
But this would be no change at all. Politics today is largely feudal: it is what rich people do to the poor. The challenge for we leftists is how to resist this without falling into despair. This is, psychologically, a tricky balancing act. But not an impossible one.
Happy new year.