In The Optimist’s Telescope, Bina Venkataraman writes, “The decisions we make today can define our experience of the future. This is true for individuals, and also for businesses, communities, and societies.” As obvious as this statement may be, our ability to deliver decisions today that will favor our future is difficult. Just like it is a struggle to take a strong step from a slippery, soft, or unstable surface, it’s tough to make a strong decision when confronted with a shifting and unstable landscape. Uncertainty is crippling.
Uncertainty is the bane of business. It’s debilitating. Researchers have been tracking “uncertainty” across countries and industries for forty years and publishing their data. Their approach is straightforward. They scan references to certainty and uncertainty in various news publications. For example, they’ve been tracking “uncertainty” in Canada studying five newspapers, The Gazette, The Vancouver Sun, The Toronto Star, The Ottawa Citizen, and The Globe and Mail. From their scan, a monthly index of “uncertainty” is produced. Higher values represent higher uncertainty. Whether the media stories instill uncertainty or reflect it may be debatable. Regardless of how it arises, this index shows the shift in the public sentiment (and business sentiment) related to uncertainty.
Looking at uncertainty over time, we can see that the credit crisis of 2007 to 2009 showed a marked increase in uncertainty which was then dwarfed by that in early 2020 when Covid arrived. Now, five years after Covid’s arrival, Canada is seeing uncertainty at the highest levels yet measured thanks to Trump’s tariff talk that’s triggered terror and alarm across the country. Uncertainty is spiking producing pessimism. As pessimism pervades, agency is assailed. Jeremy S. Adams notes writing in Lessons in Liberty, “So much of our modern misery can be traced to a fashionable catastrophism that convinces people they are utterly powerless to command the wheels of their own lives.” It’s hard to be optimistic in the face of uncertainty. Our brain bias to negativity fills in the gaps of our knowledge with fear and doubt. James Dale Davidson and Lord William Rees-Mogg capture our state of mind writing in The Sovereign Individual, “A sense of disquiet about the future has begun to color the optimism so characteristic of Western societies for the past 250 years. People everywhere are hesitant and worried.”
Worried we are. Should the future look bleak, our efforts are more likely to be meek. American author, John Green, has written that “Despair isn’t very productive. That’s the problem with it. Like a replicating virus, all despair can make is more of itself.” The self-fulfilling prophecy of pessimism is fed in an environment rich with uncertainty. Uncertainty generates the pain of pessimism. The bleak outlook pushes us to passivity. The most predictable approach when pessimistic is to pause. We stop in place. In a recent poll of Canadians 55% of respondents reported feeling “financially paralyzed.” In a separate financial post article, David Rosenberg writes, “Even without the tariffs having yet been imposed, a just-released Nanos survey shows economic optimism in Canada falling all the way back to where it was in the dark pandemic days of 2020. The uncertainty alone has created the conditions for a recession north of the border, and only the most myopic economic departments on Bay Street don’t see this unfolding in front of our very eyes.”
What’s the best performing asset class through February in 2025? Is it A.I., Bitcoin, Cannabis stocks? None of the above. Gold has been the market mover to date in 2025. It’s off to a more than 10% increase in the first six weeks of the year after a booming 2024. Gold isn’t the investment option of the bold, fearless entrepreneur. It’s the refuge of the fearful. In business, we stop investing. Our strategy becomes to survive not to thrive. Where a separate graph showing business investment is overlaid with the uncertainty line, the relationship becomes clear. Higher uncertainty results in lower business investment.
The self-fulfilling prophecy of pessimism spirals in a cloud of uncertainty. From stressed we become depressed. From depressed, demoralized. Steve Magness writes in Win the Inside Game, “If everything around us tells us we are lost, alone, and insignificant, what kind of information do you think our brain latches on to as reliable and vital? We’ve turned up the volume for threats and turned down the volume on anything that points otherwise.” Magness continues, “And too often, we solve this uncertainty by falling into a self-fulfilling prophecy. … we create actions that validate that fear. We avoid instead of approach, disappear instead of exhibit courage, and choke instead of coming through in the clutch. We’re setting ourselves up for a bad predictive rut.” We step back, lie down, and give up. Too much pain prompts us to pose what’s the point? Who am I to do anything about this? The problems are too large, too intractable. Why bother? Difficult becomes daunting. Daunting becomes depressing and we’re left demoralized, a puddle of passivity. There’s nothing more pathetic than those that are apathetic. If we’re lulled into giving up, things can’t help but get worse. Embracing entropy has never improved anything.
As Morgan Housel writes in The Psychology of Money about how much of the reality of economic affairs is the result of expectations of those participating in the economy. Expectations are little other than a narrative, a story we tell ourselves. If enough of us tell ourselves a story that the future is dicey we reign in our personal spending, redirect savings to cash instead of the stock market due to pessimism which creates the economic future we fear. The stories we tell ourselves influence the actions we take which impact our futures. Or, as Wayne Dyer put it, “If you change the way you look at things, the things you look at change.”
The good news is that we can create a virtuous, self-fulfilling cycle fueled by optimism. The biblical verse from Proverbs 17:22 offers, “A joyful heart is good medicine, but a crushed spirit dries up the bones.” This verse captures the two paths we’re contemplating. Optimism is our best option. It’s a medicine that motivates whereas pessimism crushes our spirit. “Fetishizing doom and valorizing gloom are not just actions based on factually incorrect premises; they are a stain on the human spirit that yearns to be productive and free,” writes Jeremy S. Adams’s in Lessons in Liberty.
We need to believe there will be a future and that things can improve to be motivated to move. Hope is the rope upon which we grope. Venkataraman notes, “The more control and certainty you have that your choices will make a difference, moreover, the more likely you are to act for the future.” Where we have confidence in the lay of the land, we’re more confident making decisions. This is why optimism is preferred. It’s actionable and creates a constructive cycle of contribution. Nobel Prize winner Daniel Kahneman writes of the value of optimism in his book Thinking, Fast and Slow, “If you are allowed one wish for your child, seriously consider wishing him or her optimism. Optimists are normally cheerful and happy, and therefore popular; they are resilient in adapting to failures and hardships, their chances of clinical depression are reduced, their immune system is stronger, they take better care of their health, they feel healthier than others and are in fact likely to live longer.”
In a separate article touting health benefits associated with optimism Makai Allbert notes, “Optimism is like stepping on the gas, prompting you to move forward. Pessimism is like having the hand brake on.” Optimism is an accelerant, an additive, whereas pessimism is the opposite. Both feed on themselves either lifting you up or dragging you down.
A professor, Suzanne Segerstrom, quoted in the article notes that “Optimism is a feed-forward loop.” An optimistic mindset sees opportunities where others see threats. The optimistic act on the opportunities which draws the interest and resources of others seeking to support them. The cycle cascades constructively. In The Self-Discipline Manual Peter Hollins writes of Psychologist Charles Richard Snyder’s “Theory of Hope.” Optimists are “high-hope” folk that both set goals and develop plans to achieve them. Moreover, they reflect resilience and find ways around encountered obstacles enroute to their goals. Optimists are both focused and motivated resulting in persistent striving. It’s the exact opposite with pessimists.
Kahneman further extols the virtue of optimists writing, “Optimistic individuals play a disproportionate role in shaping our lives. Their decisions make a difference; they are the inventors, the entrepreneurs, the political and military leaders—not average people. They got to where they are by seeking challenges and taking risks. They are talented and they have been lucky, almost certainly luckier than they acknowledge… the people who have the greatest influence on the lives of others are likely to be optimistic and overconfident, and to take more risks than they realize.” Optimism opens doors. In Positivity, Barbara Fredrickson writes, “Positivity opens us. The first core truth about positive emotions is that they open our hearts and our minds, making us more receptive and creative.” Optimism and a sense of high-agency go hand in hand. Those that believe the future will be positive are more likely to believe that their actions matter always. Additionally, optimism breeds resourcefulness or a belief in the Law of TAAW where there’s always a way.
We must beat back the bleakness. It’s not to deny or ignore reality. It’s that our perspective shapes our future. Optimism is the antidote to apathy. We must both care about the future and believe we can get there before we’re willing to dare. Ralph Waldo Emerson offered, “This time, like all times, is a very good one, if we but know what to do with it. Whether challenging or comfortable, every day offers an opportunity for someone. Picking this perspective of optimism is about telling yourself a better story. It’s about desirable difficulties. Optimism isn’t rose-colored glasses seeing everything as perfect. It recognizes difficulty but acts in the face of it as we discussed in The Stockdale Paradox. Optimism is about Spe Melioris or to hope for better. It’s fostering a belief that tomorrow will be better than today and it’s our job, our responsibility, to make it so.
“There is no greater folly in the world than for a man to despair.” Cervantes writing in Don Quixote
