The Optimist Creed…Are You under Positivity Illusion?

Between April and September 2011, the National Federation of Independent Business (NFIB) reported that small businesses in the US became less optimistic about future prospects. This was visible in the Small Business Optimism Index that fell 1.8 points from 89.9.

positive illusionsThis lack of optimism was due to small businesses weakening expectations in the coming few months. The chief economist at NIFB, William Dunkelberg said that “with such a dim outlook, owners are not going to do a lot of hiring or expanding”. Not only the NFIB, the Grant Thornton Business Optimism Index also shows a similar result based on three criteria –US economy, business growth and employment.

If you are in the US and a small business entrepreneur, you are perhaps going through a similar situation yourself. With the US credit rating deflated and the debt situation equally worse, small businesses are finding it harder to sustain themselves.

In this situation, when people were asked whether you are optimistic about the future, I think they are primarily asking two questions:

  1. Is there a place for optimism in our present condition?
  1. Where do you stand in the optimism index?

Again, in conditions like this, people often become a victim of “positivity illusion” or “optimism bias”.

Optimism bias is a condition where people measure their chances of experiencing a good outcome or bad outcome against others. By a good outcome, one generally means getting a job, financial security, healthy kids and a successful marriage.

By a bad outcome, one generally means health problems, loss of jobs, marriages breaking apart and other things.

SO, when people ask what you think about the future, they are measuring their own chances of faring either good or bad against the other person’s chances. It is natural human behavior to think like this; however, in the long run, it will create problems.

Whenever there is any problem, a person first thinks of securing themselves and then thinks about the well being of other people.

In an economy that the US is facing now, it is necessary to give up this positivity illusion, that is, worry less about how you as an individual is faring and be more concerned about the community you live in… because if the community is prosperous, you are prosperous.

I know that it is difficult for small businesses to survive in a turbulent economy but one does have to make the best of what they have; however, one should never be overoptimistic. It is good to be optimistic, but you should never be under the illusion that everything is fine nor should you be overoptimistic – either way, you will have a false sense of well being.

Then, let me ask you —

Do you have reasons to be optimistic in the current economic downturn?

There are, according to me. Even though there are many empty glasses strewn around, there are glasses that are half-full, which should be inspiration enough for you. The glasses half-full teach a very important lesson – the possibility of improvement.

The present recession is a major indication of how human folly can be very dangerous for us. Economic projections of the last few years have done us more harm than good.

It is not that today’s economic conditions will have a cataclysmic effect on us and we will change for the better suddenly, but there is always a tiny light of hope. HOPE is what we humans survive on.

We can only learn from our follies and learn to change.

What can we change?

  • We can learn to be positively optimistic, without being under illusions.
  • We can learn to live frugally.
  • We can learn to save money.
  • We can learn to volunteer for the betterment of the community.
  • We can learn to use sustainable goods.
  • We can learn to use natural sources of energy.
  • We can learn to become more financially responsible.
  • We can learn to care for others.

If you think optimistically, it is good for you. Just make sure your optimism does not rub others the wrong way. Don’t be overoptimistic and optimistically illusioned. Keep your thoughts balanced and try to analyze your conditions intelligently.

Know what optimism is and how your perception defines you here.

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