Stop talking about overconfidence – it doesn't really exist


Comment: We consider confidence a virtue, but from Trump to the financial crisis we have seen the downsides of too much of it. We need a whole new approach, says Rowland Manthorpe

14th September 2016

Amid all the debate surrounding Donald Trump, one of the more peculiar concerns his confidence. To his supporters – and, naturally, to the man himself – he is a model of self-esteem. To his opponents, he is narcissistic, arrogant and recklessly overconfident.

What's odd is the way the debate is framed. No one says that Trump is dangerous because he is confident. In order to undermine him, his attackers feel they need to prove that he is overconfident; that, in some way, his confidence is not what it appears.

As a way of thinking, this is not especially helpful. To understand what is unsafe about Trump – or about any confident man, from Berlusconi to Boris – we need to go beyond the crude dichotomy of confidence and overconfidence.

We think of confidence as a state, when in fact it is a process of boom and bust

As everyone knows, overconfidence is too much confidence. The way we use it, however, tends to portray it as a separate state, something qualitatively different from regular confidence. As soon as confidence becomes undeserved, or nasty, or tips over into recklessness, it has turned into something else: overconfidence.

But if overconfidence is what happens when confidence goes bad, then what is bad confidence? By definition, it doesn’t exist. Like the idea that the market is always right – because, if the market was wrong, that can only mean it wasn't functioning efficiently enough – the anomaly serves as confirmation of the theory. The simple presence of overconfidence helps keep confidence pure and faultless.

You can see this circular reasoning in the way overconfidence is only ever defined retrospectively. Think of any parable of overconfidence: Lance Armstrong, the Iraq War, the financial crisis. It’s only after everything has gone wrong that it suddenly becomes obvious to everyone that we were dealing with a raging case of hubris. Beforehand, when things seem to be fine… well, we may have our suspicions, but as long as the enterprise is succeeding, any accusation of overconfidence is just that, an accusation.

By contrast, imagine that, by some miracle, things work out – Lance never gets caught, the Iraq War creates a stable Middle Eastern democracy, the banks catch their mistakes and dump the evidence in the river. In that case, what transpired wasn't overconfidence at all, but something else, something admirable and impressive. There would still be a plaque in Nike headquarters praising Armstrong’s "fearlessness and confidence". George W Bush would be known by his self-appointed nickname, The Decider.

You might say, what’s the problem? Bush and Armstrong were overconfident. True; but the insistent separation of confidence and overconfidence prevents us seeing the connections between the two conditions. In particular, it blinds us to the way confidence leads inexorably to overconfidence.

We think of confidence as a state, when in fact it is a process of boom and bust. There is no escaping it – in fact, our belief that we can escape it is precisely what causes it in the first place.

Nothing can stop confidence overreaching, so we need to create structures that allow it to be creative without doing too much damage

At this point, it is helpful to picture an economic cycle. In the beginning, the economy grows in tandem with confidence. They boost each other, the physical and mental sides of the growth equation. Economic growth makes us feel better about the economy, and because we feel better, we borrow, and so the economy grows. (In financial terms, confidence is debt, which is why every financial crisis is also a crisis of debt.) For a while, growth is real, and it is good.

But on it goes, until at some point – and it is impossible to know when – our belief in the economy starts to exceed its fundamental strengths and weaknesses. Genuine growth has turned into a bubble. Confidence has soared – pop! – out of the atmosphere of reality. And it takes a painful crash to bring the whole thing down to earth.

What can prevent these collapses? Nothing can stop confidence overreaching itself, so the best way to handle it is to create structures that allow it be creative without doing too much damage. In personal life, this means friends, family, a job, lasting commitments. In economics and politics, it means secure, stable institutions trusted across society.

The trouble for politics is that these institutions have increasingly been weakened, not least by the emergence of new technology. Social media – ironically the place where daily anxiety about confidence is most heightened – allows Trump to showcase his confidence, safe in the knowledge that opposing voices can be scorned or disregarded. The space for measured debate has grown small indeed.

Building new institutions will be the work of a generation. But in the meantime, we can at least be wiser about confidence. Yes, it can be dazzling, but it is not in itself an admirable quality. The absence of true virtue – what previous generations might have called moral fibre – it is bound to lead us places we do not want to go.

Rowland Manthorpe's novel on the philosophy of confidence, co-written with Kirstin Smith, is out now, published by Bloomsbury, £12.99

Rowland and Kirstin will be discussing the book at FutureFest. Long + Short readers get 20% off tickets with the code LONGSHORT_FF16


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