Read this nice, short piece by one Mr. Robert Frank in ‘The Atlantic’ magazine on how he was lucky to be saved by the unlikely presence of an ambulance in the neighbourhood, after a sudden cardiac arrest on a Tennis Court. He is a professor of economics at Cornell University.
The piece goes on to argue that humans seldom give credit to ‘luck’ for their successes while ‘bad luck’ is somewhat easily blamed for failures. He is right. But, many other behavioural scientists have made this point repeatedly in recent years. That is why it is often said that success has many parents while failure is an orphan. Our eagerness to associate ourselves with success is driven by ego which is also needed to sustain self-belief, which is a positive thing. But, as with everything else, it is important not to confuse between pride and delusion.
What struck me in his piece was his reference to this asymmetry in human behaviour:
When you’re running or bicycling into the wind, you’re very aware of it. You just can’t wait till the course turns around and you’ve got the wind at your back. When that happens, you feel great. But then you forget about it very quickly—you’re just not aware of the wind at your back. And that’s just a fundamental feature of how our minds, and how the world, works. We’re just going to be more aware of those barriers than of the things that boost us along.
The asymmetry again: headwind is blamed for failure to make progress but tailwind is ignored or forgotten. Life is full of asymmetries and our response to most things is asymmetric.
That is why I found fault with economists who were trying to look for a symmetrical relationship between interest rates and inflation. It is becoming clear now to many that, due to the behavioural messaging of pessimism embedded in ultra-low (zero or negative) interest rates, it induces excess saving and hence, disinflationary or deflationary tendencies. Quite the opposite of what the policy intends to achieve.
However, that does not mean that higher interest rates would induce inflation. That is what some economists like John Cochrane are trying to establish theoretically. That strikes me as somewhat silly for it fails to acknowledge the essential asymmetry that is all pervasive in human lives.
I had referred to this in my column in MINT recently.
(Of course, on a different note, religious scholars could and would have something to say on why and how ‘luck’ finds some and does not find some others)