The shocking consequences of living in the here and now

Does what you do right now change how you see the future or plan for it? In Europe, we come back to work today after a long Easter weekend. Many of us have had a good time with family and friends or even went on vacation. Now imagine you had a medical examination on a growth in your body just before the Easter weekend and the doctor tells you: “I will have the result if it is cancer in a couple of days. Would you like me to give you a call over the Easter weekend or next week?” What would you choose?

A group of researchers from Claremont Graduate University created a series of lab experiments to test if our current actions influence how much we care about the future. Obviously, they couldn’t stake out GP practices and ask people waiting for a cancer test to participate in their experiments. That would be unethical. Instead, they asked people to have ice cream and electric shocks.

To be precise, in their first experiment, the volunteers were told that they would get a slice of bread or a large plate of ice cream to eat. After ten minutes the experiment would end with them being exposed to the result of a coin toss made before the experiment began. If the coin came up heads, they would get a 100V electric shock (painful, but not dangerous), otherwise, they wouldn’t get shocked. The question was if the volunteers would choose to know the result of the coin toss right away before they got their food or later after they had their food.

Personally, I would like to have such potentially bad news right away rather than later, no matter whether I am about to get a slice of bread or a large portion of ice cream. But it seems I am not like the average person. On average, if people were given ice cream, they were more than twice as likely to wait to be told the result of the coin toss after they had their food. Why ruin the pleasure of eating ice cream with the knowledge that you are going to pay for it later?

In another experiment, they asked volunteers a series of questions, one of which was pretty much the scenario I gave you at the start of this article. The result was similar. If people had planned something enjoyable, they were more than twice as likely to avoid getting possibly bad news on the weekend. But if all they had planned for the weekend was a boring social engagement, they were happy to get the potentially bad news (possibly because receiving the bad medical news might at least get them out of the boring social engagement).

In the end, what these experiments show is something that we observe in personal finance and politics alike. If people are happy today and busy consuming stuff, they stop worrying about and planning for the future.

In personal finance, we know that young people should think about their retirement or saving for a house, yet they are busy going to parties and hanging out with friends all the time. Living in the here and now makes them less concerned about their future and ignore planning for it.

In politics, as long as people are happy with their lives and can easily afford to go on vacations, have a beer with friends at their local, or have a relatively easy time getting on the property ladder, they are not too worried about politicians screwing the country with their ineptitude. But let houses become unaffordable or let there be a recession and people suddenly become much more engaged in politics.

It all goes back to what the Romans knew: Panem et circenses. As long as you can keep your people fed and happy, they won’t revolt. It’s just a shame that economic growth is declining both in the West as well as in countries like China, so keeping them fed and happy will become harder and harder in the future…