With apologies to Joan Didion for borrowing at least a part of the title of her fabulous book of essays (unrelated to today's post).
I was reading Nassim Taleb's The Black Swan today while I was outside waiting for the grill to warm up and watching our lunch cook, and it struck me how much time and energy we humans spend, as a species, telling ourselves stories, simplifying data to make it intelligible, and interpreting what we see in the world in a way that makes some sort of sense that we can see ourselves through. I don't believe that this is unique to me. Perhaps not everyone has a running commentary going on in their head, but everyone interprets what they see and forms it into some kind of narrative by which they live their lives. And I increasingly believe most of us are not even conscious of doing so.
This is why it is so difficult to perform any kind of truly unbiased judgment or interpretation of facts.
An example of this can be seen in can be seen in Nick Paumgarten's new article in the New Yorker, "The Death of Kings". Paumgarten scatters many anecdotes throughout his tale of the crises in the financial market including a comment by a private-equity executive who said he knew the gig was up when his cleaning woman took out a sub-prime loan to buy a house in Virginia. And yet he kept his money in the market.
Paumgartner also talks about how someone was advised to take a job, even though they were offering him too much money, because either they were "stupid or have so much money it doesn't matter", and the rational thing to do would be take the money while the taking was good.
Even we see danger we tell ourselves stories that it is okay. That we are doing the right thing. If your pay is based on how much revenue you generate it makes sense to do whatever possible to make more money, regardless of the long term effects, regardless of any small interior voice that is telling you it is all folly. You see that people who shouldn't be getting loans are getting loans, and you know that the end is near, but you also see everyone you know making money so you rationalize your actions, thinking you can just make a little more and you have plenty of time to get out.
We all believe these stories in some form or another. The fact is the stories we tell ourselves are far to simple to accommodate an increasingly complicated world, a world of our own making. We tell ourselves if we work hard and save money everything will be alright and when things fall apart we tell ourselves we were too lazy or too greedy. Or we tell ourselves that good things happen to good people, and we search our souls to see where we went wrong when things go wrong.
We tell ourselves that everyone deserves to own a home and we forget that home-ownership opens one up to all kinds of unexpected expenses and risks. We tell ourselves that if we eat right and exercise we will live to a ripe, healthy old age. We tell ourselves that the markets will rebound because they always have in the past. We tell ourselves things will always get better. We tell ourselves that lightening won't strike twice in the same spot. We tell ourselves that if we live in gated communities and send our children to good schools nothing bad can ever happen.
I tell myself that if I can just have everything organized I can meet every challenge in life.
We tell ourselves stories in order to live.