Be Skeptical of Pervasive Pessimism About the World

“Skepticism and pessimism aren’t synonymous. Skepticism calls for pessimism when optimism is excessive. But it also calls for optimism when pessimism is excessive.” – Howard Marks.

The quote above is from the excellent book The Most Important Thing: Uncommon Sense for the Thoughtful Investor, and Marks said it in the context of investing. This is a great investing principle reminiscent of Warren Buffett’s famous advice to “be fearful when others are greedy and…greedy when others are fearful.” I have written previously about “5 Simple Ways to Make Money Being Fearful When Others are Greedy and Greedy When Others are Fearful”, and won’t write further about it here. In fact, this post isn’t about investing at all.

Instead, when I read Marks’ quote about skepticism, pessimism, and optimism, I wondered if it was true in areas other than investing. Are there other domains where it pays to be a contrarian?

Are You Smarter Than a Chimpanzee?

My answer wasn’t long in coming, for one of the next books I read was Factfulness: Ten Reason’s We’re Wrong About the World – And Why Things Are Better Than You Think by Hans Rosling. Bill Gates has called this book “one of the most important books I’ve ever read – an indispensable guide to thinking clearly about the world.” In fact, Gates liked the book so much that he has offered to buy an electronic version of it for everyone who graduates from college in 2018.

Prominent in the book is the results of a 12-Question multiple-choice quiz about conditions in the world that Rosling and his team gave to over 12,000 people in 14 countries in 2017. Since each question has three possible answers, by chance alone the average score should be 33 percent, or four correct answers. The quiz only takes about 5 minutes, and you can take it here.

So how did you do? If you answered more than two questions correctly you are above average. That’s right, the average score on this quiz, given to people from all walks of life the world over, was only two correct answers. Rosling humorously points out that a chimpanzee randomly selecting bananas marked A, B, or C for each question would be expected to answer four questions correctly. Furthermore, the wrong answers were universally more pessimistic than reality.

As an example, let’s look at a question from Rosling’s quiz:

3. In the last 20 years, the proportion of the world living in extreme poverty has…

1. Almost doubled
2. Remained more or less the same
3. Almost halved

The correct answer is “C” and only 7 percent of the people who took the quiz answered it correctly. Speaking of this Rosling stated:

“Over the past 20 years, the proportion of the global population living in extreme poverty has halved. This is absolutely revolutionary. I consider it to be the most important change that has happened in the world in my lifetime. But people don’t know it.”

What is happening here? Why do people do worse on this quiz than a chimpanzee? You might think that more highly educated people would do better, but you would be wrong. In many cases the highly educated actually did worse. In fact, Rosling reports that Nobel laureates and medical researchers posted some of the worst scores, and teachers and professors didn’t do much better.

Mark Twain once stated, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” The problem with our knowledge about the world is not simple ignorance. If that were the case you would expect an average score of about 33%. Instead, the problem is that we have been told a story that just isn’t true. While things have been rapidly improving in just about any way they can be measured, and are now better than they have ever been, we are constantly taught that things have never been worse.

What or who is to blame for this gaping chasm between perception and reality? Rosling places the blame on our brains. The way our brains work puts everyone at risk of falling into the pessimism trap. In the book Rosling describes ten ways our brains can fool us into a false perception that the world is falling apart around us. While this is undoubtedly true, I think there are also groups out there preying on this tendency.

The Media

The media undoubtedly contribute to our false impression that things are getting worse, but in some ways it’s difficult to blame them. They see their job as reporting the extraordinary, and extraordinary news is rarely good. As Rosling jokes, you are unlikely to see the following headline on the front page of a newspaper in bold type any time soon:

MALARIA CONTINUES TO GRADUALLY DECLINE

The problem is, we used to only hear about bad news if it happened in our town or state. Now we are constantly bombarded by bad news no matter where it happens in the world. In this environment, Rosling states, “If we are not extremely careful, we come to believe that the unusual is usual.”

While I wish the media would report more about all the wonderful things happening in the world, I don’t see big changes happening anytime soon. However, there are things we can do:

• Recognize the media’s negativity bias and the fact that bad news anywhere will reach us instantaneously, while we will rarely hear about the good happening in the world. Remember that the unusual things reported by the news are not usual.

• Actively seek out sources of good news. I recently found one called “The Good Newspaper”. This is a newspaper you can subscribe to that contains only good news. You can also sign up to have an email sent to you every Tuesday containing five good news stories.

• Make your own good news. Limit your consumption of media and focus on your own life and what you can do to make things better.

Academia  

Professors and teachers performed abysmally on Rosling’s quiz. Rosling took this as good news, in the sense that they are not consciously teaching false information. In other words, at least they really believe the propaganda they are spewing.

This is faint praise indeed, but I think there is more going on than this. Many professors subconsciously want the news to be bad. After all, it would be difficult to recruit young people to the Socialist Revolution if the truth got out that things are better now than they have ever been, and improving rapidly. This leads to “confirmation bias” in which they discount good news and magnify bad news – which has already been magnified by the media.

I realize that I am painting professors with a broad brush, and that this is not true of most professors, but there is no doubt that universities have contributed to an overly negative view of the world that is not supported by the facts. Furthermore, the statistics Rosling uses are not obscure or controversial. Most come from the United Nations and the World Bank. It should not be asking too much for our universities to at least present an accurate picture of the world before trying to indoctrinate us into their left-wing ideology.    

Activists

I should be an environmentalist. I love the outdoors and want to see the beautiful places on our planet preserved. However, environmental groups have lost all credibility with me. Everything is a crisis and they never seem to acknowledge the progress we have made or the false alarms they have issued in the past. They believe – falsely according to Rosling – that the only way to get us to take action is to scare us to death by making everything a crisis and presenting only worst-case scenarios. As a result I discount everything they say.  

Rosling tells a great story about Al Gore trying to get him to create one of his famous bubble graphs using only the worst-case scenario about global warning. Rosling refused because it would be intellectually dishonest to do so.

It is not just environmental activists that use this tactic. Activists in all areas do this. The question is, does it work? While it might be useful in raising some quick cash, Rosling doesn’t believe it helps their causes in the long run. The reason is that it leads to despair, and despair does not motivate us.  

Hope, on the other hand, is the most powerful motivator of all. Many poverty activists feel it would be dangerous to acknowledge the progress we have made in the last two decades in fighting extreme poverty. They think the truth would cause us to lose interest in the fight. I don’t think anything could be further from the truth. I believe that progress and hope are powerful motivators, and presenting an accurate picture of how far we have come would do more than anything else to recruit people to the cause.    

I Always Thought I Was an Optimist

It is vital for us to have an accurate picture of the world, and Factfulness presents powerful evidence that most of us don’t. Our false impressions of the world represent a massive failure of our education systems, media organizations, and general culture. Rosling has done more than anyone to correct this, but it has been an uphill battle. Unfortunately, Rosling died in 2017. Hopefully others will pick up where he left off.

Not only is it vital to have an accurate picture of where we are now, but also of where we have been. Two or three hundred years ago almost everyone in the world lived in extreme poverty. It was a battle just to survive and it took almost all of our resources just to keep a roof over our heads and food in our stomachs.

Now most people in the world are living lives our not-too-distant ancestors couldn’t even have dreamed of. Extreme poverty is shrinking and income is increasing in most of the developing world. Health is better, life expectancy is higher, violence of all types has shrunk to a small fraction of what it was previously, and technological wonders allow us to do things that would have seemed magical 100 years ago. Is it too much to ask that this incredible story be accurately told?     

One of my favorite sections of the book is when Rosling states that he was born in Egypt. Of course, he wasn’t. He was born in Sweden. But the Sweden of 1948 is remarkably similar in many ways to the Egypt of today, and Egypt is progressing much faster now than Sweden was in 1948. Rosling’s point is obvious: not only has the world made remarkable progress, but the future is bright.

We don’t need a fundamental transformation or a revolution. Instead, we need to promote the conditions that allow reasonably competent government to spread and economic freedom to grow. Most of us would gladly choose hope over despair if given a good reason. The best news of all is that the facts support the case for hope.

I always thought I was an optimist, but maybe I am just a skeptic that has learned that the facts don’t support the excessive pessimism that surrounds us. It’s time for all of us to learn the facts, dismiss despair, embrace hope, and use this hope as motivation to do what we can to keep the progress going.

 

Additional Resources:

Abundance: The Future Is Better Than You Think by Peter H. Diamandis and Steven Kotler

The Rational Optimist by Matt Ridley

The Better Angels of Our Nature by Steven Pinker

“50 Ways the World is Getting Better” by Ben Carlson

The Best Stats You’ve Ever Seen a TED Talk by Hans Rosling