Investing principles applied to life: Curiosity. Humility.
Have you noticed how the present time feels stable, in contrast to the past, which was marked by rapid change? It’s an illusion, says Daniel Gilbert.
When we envision the future, we often underestimate the rate at which things will change. We view our own lives—with our careers, relationships, health, values, and beliefs—as having reached a stable state, with change and transformation belonging to the past.
Former times were changing drastically, but it seems that change has halted.
There's a term for this, and it's a bias called 'the end of history illusion.'
Background
“Human beings are works in progress who mistakenly think they’re finished,” Dan Gilbert stated in his 2014 TED Talk on 'The Psychology of Your Future Self.'
Daniel Gilbert is a renowned psychology professor known for his work on people’s ability to predict their future selves. One of his studies, conducted by himself and colleagues in 2013, known as the "End of History Illusion," provided evidence showing that individuals across all age groups tend to believe that they have already undergone the majority of their personal growth and change up to the present time, and that they will not experience significant growth or maturation in the future.
They conclude that people underestimate the extent of change they will experience in the years to come.
In his TED Talk, Gilbert speculates that this phenomenon stems from the challenge of anticipating how we will grow. Another factor could be contentment with one's current condition. The result is that we dismiss the possibility of change altogether.
Be aware of change
It’s only with the privilege of observing the past in hindsight, that we’re capable of noticing the changes. And no matter how many decades we’ve looked at in the rearview mirror, noticing change after change after change, we still fail to see that change should be the default prediction of the future, rather than constancy.
Being aware of this cognitive bias assists us in understanding individuals who frequently make short-term decisions or resist changes that could lead to positive growth. It also shows that our aversion to change may come from anxious thoughts about an unclear future. While we seek comfort, it can also cloud our judgment in important decisions, leading to passivity over action. Recognizing that assuming a static identity is a fallacy can empower individuals to embrace change.
Don't stand in the doorway
Don't block up the hall
Bob Dylan sings,
For he that gets hurt
Will be he who has stalled
Change will happen regardless, so we might as well take the wheel.
The change around us
Some of the greatest investors of all time have the ability to envision a different future. They bet that the status quo today will become the status change tomorrow. While the “End of History Illusion” study demonstrates how people underestimate personal change going forward, it's reasonable to believe that most people struggle to envision a future where our external surroundings are also quite different from what we experience today.
When we consider societies, including political and social movements, as well as technology and innovation, it’s hard to appreciate, let alone notice, significant changes in the current environment, even if we try.
Surely, the present time is still shifting. For instance, we witness technological advancements every month, but the times of Karl Benz building the automobile, the Wright brothers inventing the airplane, and the collaborative efforts to develop the computer and the internet must be things of the olden days, right?
And on a more negative note, the political pendulum is proceeding in its usual motion—one or two election cycles to the left before swinging back to the right. But revolution and civil war? Communism and fascism? Even the nature of these words has become antique and outdated…
Perhaps the majority of life-changing innovation really lies behind us (though I have my doubts), and maybe we have learned some lessons steering society away from complete disaster. But the tales of the rise and fall of empires, nations, and societies have been told for millennia. The signs of the past resembling the present have been there to guide our predictions and offer cautious warnings. Although history keeps repeating itself, we still believe that our time is different.
To end
"Time is a powerful force," Gilbert said—a force that drives change rather than taming it.
Unfortunately, we often get that one wrong.
Change is constant, and as Scorpions sang in their 1990 classic, “The wind of change blows straight into the face of time.”
The wind that blew then still blows today—both within us and around us.