We are in the midst of remarkable times, and our relationship to money is very different because of it. Appreciating this can open up possibilities for how you think, feel and act with your money.

We all see the world through the lens of the culture and the times in which we live. People living during the Renaissance didn’t know they were living during the Renaissance and didn’t call it that. It’s often only in hindsight that we can see the pattern.

Today it’s hard to fully appreciate the truly remarkable conditions in which we live. For us it’s just life. For our ancestors, it would be breathtaking.

Consider that for nearly all of mankind’s existence, our ancestors lived on the equivalent of about $1-$3 a day. Imagine paying for your home, your food, your clothing, your medical needs – everything – from a total of $1,095 for the entire year/$91 per month. For us that would be dire poverty, yet that’s what our ancestors have lived on – and, until recently, most of the population on earth.

Something changed all that, beginning in the later 1600’s in Holland, and spreading and growing in England in the 1700’s and moving gradually – and then recently more quickly – throughout the rest of the world.

That $3 a day grew by a very conservative factor of 16, and more realistically, when you include the vast improvement in the quality of goods and services, more like a factor of 100 (how do you compare an iPhone, or antibiotics, with anything in existence a few hundred years ago?).

This was the beginning of the Industrial Revolution, followed soon after by what Deirdre McCloskey calls “The Great Enrichment” – which we are very much still enjoying.

Throughout history there have been times and places of improved economic conditions. But for perspective, the best that you’ll find is maybe a raising of average income to $6 or maybe $8 a day, and that never lasted for very long; and it’s still dire poverty by our standards.

Today, worldwide average income is about $33 a day, and in the wealthier countries it’s more like $100 a day or more.

So if you’re reading this, it’s very likely that the average income among everybody in your country – not just a fortunate few – is more than 30 times what our ancestors could expect to live on. Adding the incalculable innovations and improvements (those iPhones and antibiotics again), we can conservatively more than triple that.

This isn’t the difference between having a clunky car or a nicer car; a small apartment or a large house; shopping at a discount store or a fancy store. This is the difference between a high probability of an early death by starvation or disease; or living a relatively good life until about 80.

In other words, this change since about the year 1800 is a phenomenal improvement in life for all people.

Read More

There’s a great misunderstanding about what it means to live a happy life, and it can be summed up in the popular symbol of the smiley face.

Now, I like to smile. I love feeling that kind of glowing, delighted state of emotional bliss. It’s wonderful to be full of joy and love and laughter. But feeling those things doesn’t in and of itself make for a happy life; and just because you don’t happen to feel them in the moment doesn’t mean you are unhappy.

In fact, if simply feeling those emotions all the time was what constituted happiness, then it would be a simple matter to find the right combination of drugs that would perpetually bathe our neurons with joyful chemicals, and we could all be perpetually happy.

But this smiley face view of happiness is not the whole story, at all. And we all know it.

A happy life is an engaged life, an active life, an ethical life, a life that you create; a life you can be happy about, a life you can be proud of.

It is not a perfect life.

If you have a view of happiness that tells you that to feel sad or angry or afraid is a sign of failure, or a moral shortcoming of some kind, you’re actually setting yourself up for a miserable bind. The “negative” emotions of life are just as important as the “positive” emotions, in their own way.

Nobody wants to walk around feeling afraid all the time… or angry, or sad. These feelings, in and of themselves, don’t make you happy either.

But they do provide you with important information about what is going on. Used well, they are responses to actual circumstances.

Read More

In a study by Jean Twenge of San Diego State University, she found that college kids today are more likely to call themselves gifted and driven to succeed, while their test scores and hours spent studying are decreasing. Their tendency toward narcissism has also increased over the last 30 years.

Today I want to look at what I consider one of the sources of this trend: the unearned self-esteem movement.

Many years ago, when I was young psychology graduate student studying with Nathaniel Branden, I remember him talking one day about how he had been invited to be part of The California Task Force to Promote Self-Esteem, lead by California State Assemblyman John Vasconcelos.

Nathaniel couldn’t see why he would be involved in that, since he did not see a role for government in the development of self-esteem. Nonetheless, the Task Force carried on, and created guidelines for building “self-esteem” in a way that Branden would never have advocated.

According to a New York Times article about the study group in October of 1986:

Mr. Vasconcellos, a 53-year-old Democrat, is described by an aide as “the most radical humanist in the Legislature.” Mr. Twombly said the study group was an attempt by the Assemblyman to translate into political action his 20 years of “personal emotional work” in various forms of psychological therapy at Esalen Institute near Big Sur and other places.

”I’ve explored a lot of alternative ways of being and relating,” Mr. Vasconcellos said. The bill that created the 25-member study group says its aim is to compile “the world’s most credible and contemporary research regarding whether healthy self-esteem relates to the development of personal responsibility and social problems” such as crime, drug abuse, teen-age pregnancy and welfare dependency.

Whether it was Vasconcelos’s intention or not, the model of self-esteem that the task force has effectively encouraged was the one that my favorite social psychologist Roy Baumeister showed did nothing to improve a person’s happiness, success, or character.

Read More

As this political season heats up, and all the arguments, indignation and accusations that go with it come to a rolling boil, I thought it would be worth having a look at some of the deeper biases that we all can get immersed in, regardless of ideology or political sentiments.

I write this, not because I think you should be apathetic about politics, or choose a particular side that I might like. I write this because the bombardment of manipulations we are subject to can cause us to lose focus on the meaningful details of our own lives; and the biases which politics are teeming with can throw off our judgment about what’s most important.

By politics, I mean the process by which we – politicians and media most strongly, but individuals as well – persuade, cajole, manipulate, trick, argue, deceive, and otherwise do everything we can to empower those we want to empower, and disempower those we want to disempower.

This is an equal opportunity inquiry. We all have our personal beliefs, and, regardless of what they are, every single one of us gets seduced by our biases.

Emotional Bias:

First of all, politics, and the media hype around it, creates an emphasis on emotion. From the regal music of the Sunday news shows, to the passionate oration of the politicians, to the choreographed sneers and eye rolls of the political commentators, politics feeds into our emotional system much more than our rational, intellectual assessments, no matter how much a given speaker may insist that they offer the “True Facts.”

Tribal Bias:

Human beings are by far the most caring, empathetic creatures on earth. We have unique wiring in our brain that makes this possible. If a chimpanzee in the wild is injured, he will not be taken care of by the troop – they will let him suffer and starve; but when current day members of human hunter gatherer bands were questioned, fully half of the members had been in just such a situation, and the band nursed them back to health.

This is significant, because the exceptions stand out in stark relief. When we see or hear about examples of people doing monstrous things to other people, it horrifies us – because this is not how almost all of us behave toward our fellow human beings. (There are examples of other animals, dogs, elephants, etc. showing deep caring; but these are moving because they seem so human – they are also, almost always, toward direct relations.)

But politics feeds into a tribal bias. That level of compassion and empathy mostly disappears when we think of people as outside of our group. These days, more than any time in history, the whole world is our group, which is a very good thing. But when we judge a politician from an opposing party, we lose that empathy and compassion. Our bias is strongly for our party, and against the other.

Which means we’ll tend to see only or mostly the good in members of our team, and only or mostly the bad in the other. Regardless of what the actual truth may be.

Immediacy Bias:

Read More