Even the usual Whatsapp greetings that you got this year at the turn of the year had something gloomy about them. “Happy new things, in spite of everything!” One of them wished. “Hopefully this nightmare is over this year,” wrote the other. Maybe a few firecrackers would have done this New Year’s Eve to drive away the evil spirits. Above all, an evil spirit: pessimism.
John Maynard Keynes has over Animal Spirits written, animal spirits. It is human emotions or instincts that drag down or fuel the economy, despite having little to do with reality. This year, collective pessimism is not entirely inexplicable. It comes from new Corona variants, stubbornly low vaccination rates, general exhaustion and so on. Even so, it is important that people do not give in to pessimism. Because it is a self-fulfilling prophecy.
For example, if too many people believe that inflation is going up, it is actually going up. People are demanding higher wages so they can continue to afford food and gas that they expect will become more expensive. The companies anticipate this and raise the prices of their products in order to be able to pay the rising wages. A vicious circle. Anyone who thinks the fight against climate change has already been lost is not inventing great technology to stop it. Pessimism makes people fearful, angry and marginalized and drives them into the arms of populists.
Optimism, on the other hand, has the opposite effect. Happy people spend more money. And when people spend more money, the economy will pick up. A study by the University of Miami shows that in US states where people are more optimistic, partly because the weather is better there, the recession was also less deep and the recovery was faster. “Business is 50 percent psychology,” said Ludwig Erhard.
Our brain is programmed for pessimism
It is so that the human brain is naturally predisposed to negative thinking. The columnist Andreas Kluth was just writing about this Negativity biasthat is due to our ancestors, who simply survived in their caves and steppes if they paid disproportionately much attention to risks. Our perception is distorted, which means, for example, that we remember negative criticism much more clearly than praise. That costs the individual a lot of happiness in life and the general public part of the upswing.
The future gives cause for hope, after all, artificial intelligence will increasingly relieve people of prognoses. The robo-advisor has no place for Animal Spiritswhen he suggests putting the money in the ETF. If artificial intelligence has not been fed incorrectly with information, it should simply derive decisions from the past.
However, this does not release people from working on themselves. Of course, an optimism switch cannot be flipped in the brain. But you can practice positive thinking. A first step would be to become aware of the neural predisposition to pessimism and to try to analyze reality in a more neutral way. What crises mankind has already overcome! How much better life has gotten almost everywhere for almost everyone! It is also a task for politicians: if they want to make life and the economy better, they have to convey in a credible way that they believe in it.
Perhaps a slogan that many people sent via Whatsapp at New Year’s and that is now even printed on T-shirts and face masks will help: think positive, test negative!