What if the era of short-termism is ending? 

A good friend of mine recently passed along an article that I’ve been rolling over in my head for the last couple of weeks: It’s about our collective relationship to time—and the urgency with which we need to encourage more long-term thinking in our social and economic structures. 

Specifically, the essay first contextualizes the current era of short-term behavior, perhaps made worse by a convergence of new technologies (i.e. smartphones, 24/7 news, social media, etc.). But the piece then goes further to make a compelling case that, throughout modern history, the human relationship with time has—and will always be—variable. “Periodically, perspectives would shorten, often through crises such as the French Revolution,” author Richard Fisher writes. “Hölscher argues that you can see this transformation in writing from the late 1700s into the dawn of the 1800s: optimistic, far-­reaching predictions about the world gave way to more circumspect descriptions of the future, focused on next steps and nearer-term improvements in standards of living.”

Fisher then goes on to make a provocative suggestion: Perhaps we’re nearing an inflection point. A moment when the pendulum could swing back the other way, and we could once again be nearing a phase of human progression that begins to think, act, and behave with a more long-term bias. That’s the hope, at least. The stakes are perhaps higher than ever.

“Unlike other animals, we have minds capable of imagining a deep future,” Fisher writes. “Yet while we may have this ability, it is rarely deployed in daily life. If our descendants were to diagnose the ills of 21st-century civilization, they would observe a dangerous short-termism: a collective failure to escape the present moment and look further ahead.” He continues:

“Some suggest we may be living at the ‘hinge of history,’ a time uniquely influential for the future of humanity. We have never had so many ways to destroy ourselves through self-made dangers, from nuclear weapons to bio-terror pathogens. But if we can plot a way through this period by embracing the long term, goes the argument, then our species—like other mammals—has the potential to survive for millions of years. If humanity’s evolving time perception does mirror that of a child like my daughter, then our temporal maturity as a species could be yet to come. Perhaps we are merely in a tumultuous period of adolescence, and age will bring a sense of a deeper future. Like teenagers confronted suddenly with the consequences of their actions, we are facing a crisis brought on by our short-termism. Let’s hope it turns out to be merely the shock we need in order to grow up.”


“Nature tends to be resilient to crisis in a way that human-created things aren’t.”

Tom Morgan, who writes the The Attention Span newsletter, makes a compelling argument in his recent essay regarding the concept of survivability in business, particularly during tumult. I won’t do it justice in a single paragraph, but the basic concept is this: Rather than focus on direct, top-down action, businesses need to be built with more slack—i.e. adaptability, resilience, etc.—to thrive over the long-term. “It may seem like a contradiction,” he writes, “but slack becomes exponentially more important during a crisis.” His ant analogy in the key quote below is a great mental framework for this idea.

“Nature tends to be resilient to crisis in a way that human-created things aren’t. Your laptop won’t fix itself when it breaks, but your finger will. This requires slack and flexibility. For example, at any one time, only about half of an ant colony is out foraging, and the other half are just sitting around in the nest. A management consultant would fire them. But if a flash flood wipes away the ants outside, the whole colony survives because of redundancy.”


Seeing waves of human perception as an investment strategy

“There’s all these ways to analyze markets, but what do any of us really want to know?” asks Denise Shull in a recent and thought-provoking podcast conversation. “We want to know what everybody else will pay for this thing next year or the year after that. That’s all we want to know.” Shull is an executive coach who employs neuro-economics and modern psychoanalysis in her work with investors, and I found her framing of investing as a sort of multi-modal behavioral economic sport particularly prescient. Long-term investing is, of course, about identifying mis-priced assets in the marketplace—but being successful at it over the long-term involves much, much more than the ability to calculate a simple DCF (and likely a lot more on the social sciences around narrative, cognition, group dynamics, and so on). (H/T Cam Tierney)

“Some people are really good at seeing the waves of human perception and the factors in the market that drive that [behavior] for different groups of market participants… There’s actually research at CalTech that show that short-term traders, the more they were using Theory of Mind, the parts of their brain associated with people prediction, the better they were. And by the way, in that experiment they weren’t using math at all.”


A few more links I enjoyed: 

“This pullback happened fast and is still ongoing. The speed was clarifying — in many cases our businesses had pullbacks without reporting any new information on business performance. That’s helpful. We had little-to-no new information to update our long-term perspective on these businesses. Sentiment, fear, and a healthy reduction in excessive optimism were the primary drivers.”
“When trying to think of how construction might be improved, I’ve often reached for a car manufacturing analogy. Cars are large, complex objects that improvements in production methods made vastly cheaper, and most folks start with a lot of preexisting knowledge about them, making them a useful point of comparison. (It’s not just me who does this – car analogies were a basic talking point at Katerra, for instance.) I’ve occasionally used other manufacturing analogies, but car manufacturing has generally been the default.”

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