Short And Long

Capitalism and Wall Street seem to encourage short-term thinking, rather than long-term thinking. Planned obsolescence may be good for the economy in the short-term, but is it a good strategy for the long-term? Our politicians, our news media, and most of us seem to be stuck in short-term thinking mode. Noise has replaced substance.

From the book Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb:

…my Monte Carlo toy taught me to favor distilled thinking, by which I mean the thinking based on information around us that is stripped of meaningless but diverting clutter. For the difference between noise and information, the topic of this book (noise has more randomness) has an analog: that between journalism and history. To be competent, a journalist should view matters like a historian, and play down the value of the information he is providing, such as by saying: "today the market went up, but this information is not too relevant as it emanates mostly from noise." He would certainly lose his job by trivializing the value of the information in his hands. Not only is it difficult for the journalist to think more like a historian, but it is alas the historian who is becoming more like the journalist.

I try to force myself to take the long-term view of things. One example of this is that I try to invest in stocks, rather than trade stocks. I’m not saying one is better than the other. Investing suits my temperament, however. I also think that if everyone is trading and no one is investing then we tend to have huge bubbles and huge bubbles bursting.

Short-term thinking tends to be more arrogant, in my view. George W. Bush is a short-term thinker, in spite of all his talk of history judging him after he is dead. He did not take into consideration all of the things that could go wrong when he invaded Iraq . Someone with a long-term view would be more likely to have considered the many ways that war goes wrong.

I used to think that I knew what long-term thinking was. That was before I came across The Long Now Foundation. Like nearly everyone, they also have a blog.