Delusions in Good Times and Bad

Posted by on Sep 13, 2010 in Emotion & cognition, News & commentary | 0 comments

With gloom descending on the global economy, it seems clear that we in IT will not be spared from the suffering of the financial meltdown. If history is any guide, we’ll be in the vanguard of corporate cuts. When things get tough, businesses rarely invest in efficiency, expansion or strategic change. Instead, they cut contractors, projects and employees willy-nilly to husband cash and shore up short-term balance sheets.

While these times can be disturbing and scary, they also offer a good opportunity for reflection, and a chance to review our assumptions about our world, our work and how they all fit together. So while the storm is howling outside, maybe we should take a pipe cleaner to our brains.

Good times may lead us to some delusional thinking that leaves us vulnerable to mental and financial pain when the party’s over. The first fallacy that many of us buy into during good times is that we’re all geniuses. We become convinced that because things are going well, we actually know what we’re doing. The world looks great, so we must be smart, right? And if we’re intelligent and effective, then we deserve credit for all the success. We are masters of the universe. We are the Promethean creators of technology, which begets value and wealth. If the stock of our company goes up, it must be the result of our beneficial actions.

And during good times, this is all fine. But it is delusional.

As soon as things begin to go badly, we’re not as eager to accept the blame as we were to take the credit. We look for extenuating circumstances, constraints beyond our control, systemic failures or any other excuses that might shield us from the harsh judgment of reality.

The truth is that none of us is in complete control of either our successes or our failures. We live in an interdependent world and work in interdependent offices. Few of us are either geniuses or idiots. Most of us are ordinary mortals trying to do our best in the organizations in which we’ve landed. Likewise, stock prices are not the omniscient wisdom of the universe expressed in numeric form. They are the result of the machinations of millions of global gamblers.

The problem with believing in our own power is that when it’s revealed to be an illusion, we suffer shame and humiliation. Worse, we can succumb to the opposite delusion: that we are completely powerless.

While the first myth leads to mental anguish, the second can lead to financial ruin. When our salaries go up, we tend to believe that personal income is a function of our value to the company. We believe that our incomes are somehow a measure of our moral or financial virtue. And then we build a lifestyle that assumes that our virtue will never fail us. We take out mortgages, grow accustomed to luxuries. We think our companies pay us more because we’re loved and respected.

Of course, there’s nothing wrong with being loved and respected. And having a reasonable degree of self esteem is no vice. But to believe that money is an accurate measure of one’s value is a dangerous idea. We live in a market economy, and what we’re paid is largely the result of supply, demand and regulation.

If in this downturn many of us are forced out of good-paying jobs and into jobs that pay less, does that mean that we’re personal failures? Or does it just mean that the forces of supply and demand for our labors have changed? How many of us are now hostage to mortgage debt, car loans and credit cards that we took on in the belief that incomes and value would only rise?

Through the ups and downs of a career, it’s best to stay firmly in touch with hard reality, even if it means giving up some of our pleasant illusions conjured during times of good fortune.

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