Of Pygmies and Auto Unions

I'm currently reading a book called Stumbling on Happiness, written by a Harvard psychology professor. It's a fascinating book that is part psychology, part philosophy, part cognitive neuroscience, part behavioural economics and all highly recommended. It aims to systematically and irrefutably answer the question, "Why do people so poorly imagine their ideal futures that they are rarely happy when they achieve them?"

To illustrate a piece of the puzzle, Gilbert relates an anecdote of a pygmy named Kenge who is led out of the dense, tropical forests of Africa by an anthropologist for the first time1. While out in the open plains, Kenge sees buffalo in the far distance as small, black specks and asks what they are. When told what they are he roars out in laughter telling the anthropologist not to tell him lies!

Having lived his entire life in a dense forest, Kenge had never learned that objects in the distance appear smaller and blurrier than objects that are close to us, something that we all take for granted.

The key leap that Gilbert then makes is that seeing in time is like seeing in space. When young couples are asked to describe getting married, those with a date in a few months use abstract, blurry phrases like "making a serious commitment" while those getting married the next day offer concrete details like "having pictures made" or "wearing a special outfit"2.

The key difference between spacial and temporal blurriness however, is that our minds are aware of the fact that the buffalo are blurry and ambiguous because they are far away, but they tend to believe that future events appear to be blurry and ambiguous because they are blurry and ambiguous. It explains why we frequently make future commitments that we dread fulfilling when the time comes.

Which leads us to the book While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis. This book was discussed in January on NPR's Planet Money Podcast, in the context of the current automaker crisis. Their discussion struck me as a grand-scale illustration of Gilbert's concept of temporal blurriness that now threatens to destroy the entire industry.

Throughout the last few decades, the automakers have had to regularly meet with the unions to negotiate their collective bargaining agreement. And they have exhibited remarkably consistent behaviour in their bargaining, favouring larger, longer-term concessions versus smaller, short-term ones. For example when faced with a 3% wage raise and 50% salary pension pay-out, the automakers would instead counter with a 2.5% wage raise and a 75% salary pension pay-out.

The automakers were essentially acting as if future payment did not exist at all! They were almost literally trading a dollar today for a hundred dollars twenty years from now. And now, in this economic climate, the time has come for the automakers to fulfill their commitments - and they are dreading it...

1. C. Turnbull, The Forest People (New York: Simon & Schuster, 1961), 222.
2. N. LIberman and Y. Trope, "The Role of Feasibility and Desirability Considerations in Near and Distant Future Decisions: A Test of Temporal Construal Theory," Journal of Personality and Social Psychology 75: 5-18 (1998)