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5 economic myths that just won't die
Started:February 28th, 2014 (09:35 PM) by kbit Views / Replies:135 / 0
Last Reply:February 28th, 2014 (09:35 PM) Attachments:0

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5 economic myths that just won't die

Old February 28th, 2014, 09:35 PM   #1 (permalink)
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5 economic myths that just won't die

Sometimes it seems like the world is collapsing around us: young people have no work ethic, there's a leadership vacuum in corporate America, schools are in crisis. But all of this has happened before, and it will happen again.

FORTUNE -- Sometimes it seems like the world is collapsing around us: young people have no work ethic, there's a leadership vacuum in corporate America, schools are in crisis, technology is destroying the way we communicate, and our country's prosperity is under attack.

But when you look closely at each of these new and pressing dangers, you begin to realize that they've all been cited before. As far back as the fourth century B.C., Plato complained about the lack of respect and discipline among youth. Our so-called educational crisis and dissolute business leaders have made headlines from the 19th century on, from the savings and loan debacle, the Enron scandal, and the most recent financial collapse in 2008.

New technologies have long seemed harbingers of disaster, from the locomotive, telegraph, radio, and television, to today's Internet and mobile devices. And before China threatened to destroy the American way of life, it was Japan buying Rockefeller Center that struck fear into the hearts of corporate and political leaders.

"The same rumors, the same story, the same fact gets recycled as new every few years. If you look at these things, it's not random or luck," says Jonah Berger, a marketing professor at the Wharton School of the University of Pennsylvania and author of Contagious: Why Things Catch On. "It's almost the same story with new parts being played."

So why do these five story lines continue to haunt our public discourse, raising alarm and making headlines over and over again? Moreover, why don't we recognize that they're the same tales, merely recycled and freshened up with current-day facts? The answer can be found in the common elements of these alarmist notions, and our own psyches.

All five themes appeal to our anxieties and fears over the future, whether it's our own prosperity or the financial security of the world our children will inherit.

Anything that appeals to our emotions is more powerful than something that appeals to our intellect because of the way human beings are wired. Anxiety in particular is an emotion that prompts us to take action -- such as sharing an alarming news story -- as opposed to sadness, which is a more passive emotion. An analysis of 7,000 New York Times articles found that the ones that make the most emailed list are more likely to trip our anxiety alarm, Berger says.

These narrative threads tap into our core drive to survive, says Sally Hogshead, author of the forthcoming book How the World Sees You. "These are age-old themes. If we go back 2,000 years, we'd have them," she says.

Moreover, these five story lines are broad enough to touch on topics that surface frequently in the news, public policy, and even conversation; issues like the job market, business and political leaders, our children, technological advances, and the global economy.

"These are topics that come up often, so they trigger these related memes," Berger says. "One thing can remind us of other things."

Our brain finds comfort in those reminders. It's a mental shortcut known as a heuristic, which we use to make sense of the environment efficiently, says Kevin Fleming, founder of Grey Matters International, a neuroscience-based consulting firm.

"There are a finite number of experiences as a human being, so when we tell stories about those experiences, that's how we connect," notes Annette Simmons, author of The Story Factor, who calls the five ideas "teddy bear stories" because of how loyally we cling to them. "You try to tug someone's teddy bear away and they might just bite your arm off."

Indeed, if we are given evidence that contradicts the story lines -- such as productivity data that shows young people can rival older workers -- we are more likely to discount the new information than to change our perspective. Psychologists call this a confirmation bias: we give greater weight to data that confirms our already-held beliefs.

"The brain is a sense maker; it wants to come up with patterns and come up with a model that will allow it to snap judge," Fleming says.

As for why we don't realize that these ideas are recycled stories, the answer is simple: we are different, even if the stories are the same. The environment is different this year, and we are older, in different roles, with different perspectives.

So if you were entering the workforce in the mid-90s, when Baby Boomers complained bitterly about slacker Generation Xers, you may have ignored those criticisms or discounted them as untrue. But now that you're seeing Millennials tromp through offices, wearing flip-flops, and glued to mobile devices, it seems like a fresh observation to decry the lack of work ethic among today's youth.

"You didn't listen to the story the first time around, but now it's relevant," Berger says. "Now you pay more attention."

The same goes for parents who worry that schools today are crumbling. They may have not cared as much about education before procreating. Or middle-aged workers look at their measly 401(k) fund and worry about China's growing prosperity because they're now closer to retirement than they were a decade ago.

A psychological phenomenon known as attribution bias also comes into play here. When we try to make sense of behaviors or the world around us, we give ourselves too much credit and we discount others' contributions or worth. That's why everyone is likely to rate their intelligence as above average.

"We will minimize our own sense of fallibility, inflate our own positives, and do the opposite for others," Fleming says. "You see this generationally."

So, the next time you see a headline about the latest crisis in leadership or threat from the East, take a moment to check your own biases. And try to discern the universal themes in the story. We've likely heard it all before.

5 economic myths that just won't die - Fortune Management

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