2013/06/25

Optimism

A few months ago, I stumbled across a business card left behind on a table. Under the name of the company, it had three words, each followed by a period,  representing, I guess, the three pillars of their "corporate values".  One word struck me: Optimism.   I must have snickered,  because someone asked what was up. I instinctively thought "optimism" was a silly value, but it dawned on me that I had never thought about it explicitly. IMG_5158

Is optimism good?

The question sounds strange because Optimism, today, in American culture, is automatically assumed to be A Good Thing. Like "pro-active". People use that word as if it's synonymous with "good".  E.g. Person A: "Don't do this bad thing." Person B: "It's not bad, it's pro-active!"  Noooo....  Just like sometimes, being pro-active is evil, being optimistic is not automatically good.

Let's define optimism as follows: Having high expectations for a positive outcome. That is to say, compared to most "normal" people's probability distribution of outcomes, yours has more weight on the positive side. Say we both bet on the same horse, and one of us thinks we'll lose and one thinks we'll win.  So when is it good to be the optimist?  I would slice it on three levels:
  1. Of course if you turn out to be right, then great... But that just means you got lucky.
  2. What if you had to make the same choice over and over again, and on average the optimistic view is more accurate? Great, but that's not really optimism, it's having a better probabilistic model, better foresight.
  3. Now what if you believe the same probabilities as everyone else, but you are more willing to take the risky choices and eventually you're better off? You are good at taking the right amount of risk for reward, and if in the long run you are better off (technically i.e. if you are on the efficiency frontier in the risk, reward plane),  then ... well that's good judgement. 
But in all these forms, the optimism is situational! The are plenty of situations where the wise person would take the "pessimistic" position.   Thus, as a fundamental value to live by, "optimism" is actually orthogonal to the things we consider good, truthful etc.

People (including Corporations!) of the world, listen to me: Value luck, foresight or judgement.  Not optimism.  That's just silly.

 

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