Class and optimism

One thing that attracts people to Boris Johnson is his cheerfulness about Britain’s prospects. Liam Halligan and Owen Patterson both praise his “sunny optimism”, whilst Matthew Leeming writes – I kid ye not – that “we need a cheerleader to remind us we are an erect and manly people.” But I wonder: is there a class aspect here?

I ask because of recent paper by Erin McGuire. She shows that:

Individuals who begin their lives by observing an economic downturn remain pessimistic and risk averse with respect to investments over the course of their lifetimes.

This corroborates work (pdf) by Ulrike Malmendier and Stefan Nagel and by (pdf) Miguel Ampudia and Michael Ehrmann. And it’s consistent with research by Henrik Cronqvist and colleagues. They show that people who grew up in poorer homes or who entered the labour market in recession tend to avoid growth stocks even years later.

Much the same might also be true for attitudes to unemployment. Memories of the Great Depression suppressed wage militancy in the 1950s, just as memories of the financial crisis might have caused millennials to be timid today. Wolfgang Maennig and Markus Wilhelm have shown that spells of unemployment depress well-being even after people return to work, perhaps by inducing the fear that it could happen again.

All this suggests that hard times in our formative years make us pessimistic long after those times have passed.

Which is where class comes in. Being posh insulates you somewhat from hard times, thus making you more optimistic than the rest of us. Johnson and I are both of an age to have spent our formative years during a time of soaring unemployment. But whereas I saw it close up, Mr J did so from a safer distance. It is perhaps therefore no accident that he has a “sunny optimism” and I, well, don’t.

The mechanism here was described by David Hume. Our lived experience creates impressions which enter our minds “with most force and violence”, whereas reports are only “faint impressions” of these. Those who have experienced poverty or unemployment, or seen them close up, have therefore a greater fear of it than those who only saw them from a distance, if that.

What I’m describing here is a little different from the tendency for posh people to be more confident than the rest of us, but perhaps connected. My point is that posh folk are more optimistic than others not just about their personal prospects, but about prospects for the economy generally. Of course, you can think of counter-examples to this – of posh but melancholic people (Townes van Zandt?) – but I suspect there is a tendency here. This fits with the fact that leading Brexiters such as Rees-Mogg and Farage as well as Johnson come disproportionately from comfortable backgrounds.

Of course, optimism is sometimes justified. But this isn’t my point. My point is merely that our attitudes and preferences are not “given” as simplistic neoclassical economics often pretends. They are instead endogenous (pdf), shaped by among other things culture, gender, history, peer pressure and – yes – class.  

Comments

[pablopatito]

I dunno, Rees-Mogg, Farage and Johnson didn't come across as very optimistic about the EU.

[Mark]

Perhaps so, though polling suggests Boris Johnson's anointment would result in the Tory Party gaining popular support, particularly among non-traditional Tory voters outside the south east. So plenty of working class and younger people buy into his optimism.

[Phil]

Cf. Rees-Mogg being described, by people who really ought to know better, as 'gracious' and a thoroughly nice chap on a personal level. If you've gone through life being - not to put too fine a point on it - obeyed by everyone around you, why wouldn't you be nice? If "I say, would you mind awfully letting me through?" gets the same results as "out of my way, plebs!" - every time - it's the first one you're going to use; it's less effort, apart from anything else.

There's also a more basic, material reason for Johnson to think everything's going to be pretty much all right. Everything *will*, not only for him but for just about everyone he knows in the world. Human sympathies will only stretch so far.

As for why people buy into it, there's a regrettably deep-rooted tendency to confuse education with wisdom, and in particular to think that somebody who's clever with language must have spent a great deal of time thinking about how the world works. If you spell it out like that it's obviously false, but it seems to meet a need - perhaps people want the reassurance of feeling that *somebody* knows how things work. (Cf. the assumption that anyone who's made a lot of money in business must have spent a lot of time finding out how the world works.)

[billb]

The leaders of Extinction Rebellion come from much the same background as Rees-Mogg, Farage and Johnson. But they don't sound the least bit optimistic.

[georgesdelatour]

“Individuals who begin their lives by observing an economic downturn remain pessimistic and risk averse with respect to investments over the course of their lifetimes.”

I don’t think this is true. But if it was, wouldn’t it be an argument against allowing a lot of Third World immigration? After Idi Amin had confiscated all the wealth of the Ugandan Asians, the theory would predict that they and their children wouldn’t make a success of life in the UK. My understanding is that they mostly thrived.

The current generation of Chinese billionaires - people like Jack Ma - would have all experienced the national psychosis of the Cultural Revolution in their youth. The theory suggests they’d be constantly expecting Cultural Revolution Mk II to kick off real soon now, and this would kill off entrepreneurialism.

George Soros experienced the kind of youth which the theory predicts ought to be fatal to business success.

[Blissex]

«The theory suggests they’d be constantly expecting Cultural Revolution Mk II to kick off real soon now, and this would kill off entrepreneurialism»

Rich chinese people are exporting wealth and family from China as fast as they can, and most of their businesses are short termist. Same in the UK in the 30s, and in Italy and Greece for a long time.