A QUARTERLY MESSAGE ON LIBERTY

WINTER 2015VOLUME13NUMBER1

Why are people so pessimistic about thepresent? My own interest in this topicbegan when I became aware of histori-cal data on violence and compared

them with the conventional wisdom of respondents in aninternet survey. I found that people consistently estimatethat the present is more lethal than the past. Modernity hasbrought us terrible violence, the thinking goes, while the na-tive peoples of the past lived in a state of harmony, one wehave departed from to our peril. But the actual data showthat our ancestors were far more violent than we are andthat violence has been in decline for long stretches of time.In some comparisons, the past was 40 times more violentthan the present. Today, we are probably living in the mostpeaceful time in our species’ existence.

STEVEN P INKER

STEVEN PINKER IS THE JOHNSTONE

FAMILY PROFESSOR OF PSYCHOLOGY

AT HARVARD UNIVERSITY AND THE

AUTHOR OF MANY BOOKS, INCLUDING

THEBLANKSLATE. HE SPOKE AT A

CATO POLICY FORUM IN NOVEMBER.

The Psychology of Pessimism

2 • Cato’s Letter WINTER 2015

This insight led me to write The BetterAngels of Our Na-ture: Why ViolenceHas Declined. But it

was not the end of my encounterswith pessimism. After writing a bookon war, genocide, rape, torture, andsadism, I thought I would take onsome truly controversial issues—namely, split infinitives, dangling par-ticiples, prepositions at the end ofsentences, and other issues of styleand usage in writing. There, too, Ifound widespread pessimism. WhenI told people that I was writing abook on why writing is so bad andhow we might improve it, the univer-sal reaction was that writing is get-

ting worse and that the language is degenerating.There are a number of popular

explanations for this alleged fact:“Google is making us stoopid” (as afamous Atlantic cover story put it).Twitter is forcing us to write andthink in 140 characters. The digitalage has produced “the dumbest gen-eration.” When people offer theseexplanations to me, I ask them tostop and think. If this is really true, it

implies that it must have been betterbefore the digital age. And of coursethose of you who are old enough re-member the 1980s will recall that itwas an age when teenagers spoke inarticulate paragraphs, bureaucratswrote in plain English, and every aca-demic article was a masterpiece inthe art of the essay. (Or was it the1970s?)Above and beyond the psycholo-

gy of violence and the psychology oflanguage, these findings point towardan interesting question for a psychol-ogist such as myself. Why are peoplealways convinced that the world isgoing downhill? What is the psychol-ogy of pessimism? I’m going to sug-gest that it’s a combination of several

elements of human psychol-ogy interacting with the na-ture of news. Let’s start withthe psychology.There are a number of

emotional biases toward pes-simism that have been welldocumented by psycholo-gists and have been summa-rized by the slogan “Bad isstronger than good.” This isthe title of a review article by the psychologist Roy

Baumeister in which he reviewed awide variety of evidence that peopleare more sensitive to bad things thanto good things. If you lose $10, thatmakes you feel a lot worse than theamount by which you feel better ifyou gain $10. That is, losses are feltmore keenly than gains—as JimmyConnors once put it, “I hate to losemore than I like to win.” Bad eventsleave longer traces in mood andmemory than good ones. Criticism

Why are people always convinced that the world is goingdownhill? What is the psychology of pessimism?

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WINTER 2015 Cato’s Letter • 3

hurts more than praise en-courages. Bad information isprocessed more attentivelythan good information. Thisis the tip of an iceberg of lab-oratory phenomena showingthe bad outweighs the good. But why is bad stronger

than good? I suspect thatthere is a profound reason,ultimately related to the sec-ond law of thermodynamics,namely that entropy, or disorder,never decreases. By definition, thereare more ways in which the state ofthe world can be disordered than or-dered—or, in the more vernacularversion, “Shit happens.” Here’s aquestion once posed to me by mylate colleague Amos Tversky, a cog-nitive psychologist at Stanford Uni-versity. As you leave this conference,how many really good things couldhappen to you today? Let yourimagination run wild. And now:How many really bad things couldhappen to you today? I think you’llagree that the second list is longerthan the first. As another thoughtexperiment, think about how muchbetter you could feel than you’refeeling right now. Now consider howmuch worse you could feel. You don’teven have to do the experiment. Notsurprisingly, this has probably left a mark on the psychology of risk perception.The bad-dominates-good phe-

nomenon is multiplied by a secondsource of bias, sometimes called theillusion of the good old days. Peoplealways pine for a golden age. They’renostalgic about an era in which lifewas simpler and more predictable.

The psychologist Roger Eibach hasargued that this is because peopleconfuse changes in themselves withchanges in the times. As we get older,certain things inevitably happen tous. We take on more responsibilities,so we have a greater cognitive bur-den. We become more vigilant aboutthreats, especially as we become par-ents. We also become more sensitiveto more kinds of errors and lapses.This is clear enough in language: asyou become more literate, you be-come more sensitive to the finepoints of punctuation and spellingand grammar that went unnoticedwhen you had a shorter history of at-tending to the printed word. At thesame time, we see our own capacitiesdecline. As we get older, we becomestupider in terms of the sheer abilityto process and retain information.There’s a strong tendency to mis-

attribute these changes in ourselvesto changes in the world. A number ofexperimental manipulations bear thisout. If you have people try to makesome change in their lives—say, toeat less fat—often they become con-vinced that there are more and moreadvertisements for fatty foods.This ties into a third emotional

People always pine for a golden age. They’re nostalgic about an era in whichlife was simpler andmore predictable.

“ “

bias, the psychology of moralization.People compete for moral authori-ty—for who gets to be consideredmore noble—and critics are seen asmore morally engaged than thosewho are apathetic. This is particularlytrue of contested ideas in a local com-munity. People identify with moraltribes: what you think is worthy ofmoralization identifies which groupyou affiliate with. So the question athand today—is the world getting bet-

ter or worse?—has become a referen-dum on modernity, on the erosionover the centuries of family, tribe, tra-dition, and religion as they give wayto individualism, cosmopolitanism,reason, and science. Simply put: Yourfactual belief on whether the world isgetting better or worse advertisesyour moral beliefs on what kinds ofinstitutions and ideas make us better

or worse off.Those are three emotional biases

toward pessimism. We also have cog-nitive biases that incline us that way,foremost among them being the“availability heuristic.” This is a fea-ture of the psychology of probabilityalso documented by Tversky, in col-laboration with the Nobel Prize–winning economist Daniel Kahne-man. Forty years ago, Kahnemanmand Tversky argued that one of theways the human brain estimatesprobability is by using a simple ruleof thumb: the more easily you can re-call an example of something, themore likely you estimate it to be. Theresult is that anything that makes anincident more memorable will alsomake it seem more probable. Thequirks of the brain’s ability to retaininformation will bleed into our esti-mates of a risk’s likelihood. Eventsthat are more recent, or easier toimagine, or easier to retrieve—any-thing that forms a picture in themind’s eye—will be judged to comefrom more probable categories ofevents.Kahneman and Tversky offer a

simple example: Which are morecommon, words that begin with theletter r or words that have r in thethird position. People say that thereare more words that begin with r,even though it’s the other wayaround. The reason for this error isthat we retrieve words by their on-sets, not their third letter. You canask this of almost any letter in the alphabet and you’ll get the same re-sult, because we can’t call words tomind by any position than the first.We see the availability heuristic in

4 • Cato’s Letter WINTER 2015

WINTER 2015 Cato’s Letter • 5

action all the time. People aremore fearful of plane crashes,shark attacks, and terroristbombings—especially if onejust happened recently—than of accidental electrocu-tions, falls, and drownings.The latter are objectivelymuch riskier, but they tendnot to make headlines.I believe that each of

these psychological biases interacts with the nature ofnews to lead to an aura ofpessimism. What is news?News is, by definition, things thathappen. It’s not things that don’thappen. If a high school gets shot up,that’s news. If there’s another highschool that doesn’t, you don’t see areporter in front with a camera and anews truck saying, “There hasn’tbeen a rampage shooting in this highschool today”—or in the other thou-sands of high schools at which shoot-ings have not taken place. The newsis inherently biased toward violentevents because of the simple fact thatthey are events.This bias is then multiplied by the

programming policy “If it bleeds, itleads.” Consuming stories of violenceis pleasurable. We pay a substantialamount of our disposable income to watch Shakespearean tragedies,Westerns, mafia flicks, James Bondthrillers, shoot-em-ups, spatter films,pulp fiction, and other narratives inwhich people get shot, cut, or blownup. It’s not surprising that when itcomes to attracting eyeballs to newssites, the same kind of mayhem thatwe pay money to see fictionalized wealso pay money to see in reality. This

is multiplied by the fact that theworld now has 1.75 billion smart-phones, which means the world nowhas 1.75 billion news reporters. Goryevents that as recently as a decadeago would have been trees falling inthe forest with no one to hear themcan now be filmed in real time andinstantly broadcast on the Internet.All of these features of the newsmedia stoke the availability heuris-tic. They give us vivid, memorable,recent events, exactly the kind ofmaterial that tilts our probabilityestimates. In sum, there are many reasons to

think that people tend to be morepessimistic about the world than theevidence warrants. I have suggestedthat this can be attributed to threeemotional biases that are baked intoour psychology: bad dominates good,the illusion of the good old days, andmoralistic competition. These feedinto a single cognitive bias—theavailability heuristic—which in turninteracts with the nature of news,thereby generating an inclination to-ward pessimism.n

“When it comes to attracting eyeballs to news sites, the samekind of mayhem thatwe pay money to seefictionalized we alsopay money to see in reality.

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6 • Cato’s Letter WINTER 2015

GEORGE SELGIN is a senior fellow at the Cato Institute. Herecently retired from the University of Georgia, where he isnow professor emeritus of economics, to serve as director ofCato’s new Center for Monetary and Financial Alternatives.His research covers a broad range of topics within the field ofmonetary economics, including monetary history, macro-economic theory, and the history of monetary thought. Sel-gin is the author of several books, including Good Money:Birmingham Button Makers, the Royal Mint, and the Begin-nings of Modern Coinage and The Theory of Free Banking, aswell as numerous academic and popular articles.

cato scholar profile

George Selgin

WHAT IS THE MISSION FOR THE CENTERFOR MONETARY AND FINANCIALALTERNATIVES?For some years I’ve hoped to start a center de-voted to monetary reform, so as to be able tocontribute more to the cause than I could just byteaching classes and writing journal articles. Atlast Cato gave me the opening I needed. Peoplewonder how I could quit a tenured faculty posi-tion, but in this case doing so was a no-brainer.The new Center’s mission is, in brief, to

make way for substantive monetary and finan-cial reform by giving both the general public andexperts a better understanding of market-basedmonetary reform alternatives. Too often suchalternatives are overlooked in favor of othersthat consist of mere tinkering with fundamen-tally flawed arrangements or, worse, of placingyet another layer of ill-designed regulations ontop of previous, equally faulty layers. Like an oldand leaky roof, our flawed system doesn’t needpatching: it needs to have its bad componentsstripped away and replaced with sound ones.

WHAT EXACTLY IS FREE BANKING?Well, it doesn’t just mean that there aren’t anyfees! It refers to a banking system that’s notsubject to any special regulations—that is, reg-ulations beyond those required for the enforce-ment of contracts. A free bank can even issuecirculating currency, such as the notes banks is-sued in past times, or their modern digital

counterparts. Although it may be tempting toassume that free banking must lead to all sortsof problems, both theory and historical experi-ence suggest otherwise. The more you learnabout free banking, the more evident it be-comes that the true cause of most monetaryand banking disorders has more to do withfaulty government regulation than with inade-quate regulation.

IS THERE A HISTORICAL EXAMPLE OF AFREE BANKING SYSTEM THAT WORKS?There are some excellent examples of free bank-ing systems that worked in the past, though nosuch systems survive today. The best past exam-ples were the Scottish system that flourishedroughly from Adam Smith’s time until the mid-19th century and the Canadian system of 1867(the year of Canada’s Confederation) until 1914.Although neither system was pristine or pure,both were very free compared to most past andall present banking systems. In particular, theylacked central banks and deposit insurance, whileallowing nationwide branch banking. Thoughscholars may bicker about details today, bothwere notoriously more stable than the neighbor-ing English and U.S. arrangements. These exam-ples give lie to the conventional wisdom thattreats banking systems as being inherently crisisprone, suggesting instead that unregulated bank-ing systems can be stronger and more resilientthan more heavily regulated ones have been. n

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WINTER 2015 Cato’s Letter • 7

A Big Thank You to the Cato Legacy Society!

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— JONATHAN RAUCHAuthor ofKindly Inquisitors: The New Attacks

on Free Thought

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