Lost Illusions (contains a biography of the author and an active table of contents)


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Introduction

At the same time Camus argues against the specific philosophical current with which Nietzsche is often linked as a precursor, and to which he himself is closest—existentialism. The Myth of Sisyphus is explicitly written against existentialists such as Shestov, Kierkegaard, Jaspers, and Heidegger, as well as against the phenomenology of Husserl.

Camus shares their starting point, which he regards as the fact that they all somehow testify to the absurdity of the human condition. In the process, the absurdity of Nausea becomes the contingency of Being and Nothingness , the fact that humans and things are simply there with no explanation or reason. Having rooted human existence in such contingency, Sartre goes on to describe other fundamental structures of existence, core human projects, and characteristic patterns of behavior, including freedom and bad faith, all of which arise on this basis.

For Sartre absurdity is obviously a fundamental ontological property of existence itself, frustrating us but not restricting our understanding. For Camus, on the other hand, absurdity is not a property of existence as such, but is an essential feature of our relationship with the world.

Camus, on the contrary, builds an entire worldview on his central assumption that absurdity is an unsurpassable relationship between humans and their world Aronson As discussed above, Camus views the world as irrational, which means that it is not understandable through reason. According to Camus, each existentialist writer betrayed his initial insight by seeking to appeal to something beyond the limits of the human condition, by turning to the transcendent. And yet even if we avoid what Camus describes as such escapist efforts and continue to live without irrational appeals, the desire to do so is built into our consciousness and thus our humanity.

But it is urgent to not succumb to these impulses and to instead accept absurdity. These philosophers, he insists, refuse to accept the conclusions that follow from their own premises. Kierkegaard, for example, strongly senses the absurd. But rather than respecting it as the inevitable human ailment, he seeks to be cured of it by making it an attribute of a God who he then embraces. Along with Sartre, Camus praises the early Husserlian notion of intentionality. The Myth of Sisyphus finds the answer by abandoning the terrain of philosophy altogether.

After the dense and highly self-conscious earlier chapters, these pages condense the entire line of thought into a vivid image. For Camus, Sisyphus reminds us that we cannot help seeking to understand the reality that transcends our intelligence, striving to grasp more than our limited and practical scientific understanding allows, and wishing to live without dying.

Like Sisyphus, we are our fate, and our frustration is our very life: we can never escape it. But there is more. After the rock comes tumbling down, confirming the ultimate futility of his project, Sisyphus trudges after it once again. At each of those moments when he leaves the heights and gradually sinks towards the lairs of the gods, he is superior to his fate.

This is how a life without ultimate meaning can be made worth living. Sisyphus accepts and embraces living with death without the possibility of appealing to God. His fate belongs to him. He has lived his existence from one moment to the next and without much awareness, but at his trial and while awaiting execution he becomes like Sisyphus, fully conscious of himself and his terrible fate.

He will die triumphant as the absurd man. The Myth of Sisyphus is far from having a skeptical conclusion. In response to the lure of suicide, Camus counsels an intensely conscious and active non-resolution. Rejecting any hope of resolving the strain is also to reject despair. Indeed, it is possible, within and against these limits, to speak of happiness. It is not that discovering the absurd leads necessarily to happiness, but rather that acknowledging the absurd means also accepting human frailty, an awareness of our limitations, and the fact that we cannot help wishing to go beyond what is possible.

These are all tokens of being fully alive. First of all, like Pyrrho, Camus has solved his pressing existential issue, namely, avoiding despair, by a kind of resolution entailed in accepting our mortality and ultimate ignorance. But there are two critical differences with Pyrrho: for Camus we never can abandon the desire to know, and realizing this leads to a quickening of our life-impulses.

This last point was already contained in Nuptials , but here is expanded to link consciousness with happiness. But how is it possible that, by the end of The Myth of Sisyphus , Camus has moved from skepticism about finding the truth and nihilism about whether life has meaning to advocating an approach to life that is clearly judged to be better than others? How does he justify embracing a normative stance, affirming specific values?

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This contradiction reveals a certain sleight of hand, as the philosopher gives way to the artist. It is as an artist that Camus now makes his case for acceptance of tragedy, the consciousness of absurdity, and a life of sensuous vitality. He advocates this with the image of Sisyphus straining, fully alive, and happy. And it is often forgotten that this absurdist novelist and philosopher was also a political activist—he had been a member of the Algerian branch of the French Communist Party in the mids and was organizer of an Algiers theater company that performed avant-garde and political plays—as well as a crusading journalist.

In June he wrote a series of reports on famine and poverty in the mountainous coastal region of Kabylie, among the first detailed articles ever written by a European Algerian describing the wretched living conditions of the native population. The spectacle of Camus and his mentor Pascal Pia running their left-wing daily into the ground because they rejected the urgency of fighting Nazism is one of the most striking but least commented-on periods of his life. Misunderstanding Nazism at the beginning of the war, he advocated negotiations with Hitler that would in part reverse the humiliations of the Treaty of Versailles.

His pacifism was in keeping with a time-honored French tradition, and Camus reported for military service out of solidarity with those young men, like his brother, who had become soldiers. Intending to serve loyally and to advocate a negotiated peace in the barracks, he was angered that his tuberculosis disqualified him Lottman, —31; Aronson , 25— However, after the Liberation the question of violence continued to occupy him both politically and philosophically.

His allegory of the war years, The Plague , depicts a nonviolent resistance to an unexplained pestilence, and in his was one of the few voices raised in protest against the American use of nuclear weapons to defeat Japan Aronson , After the Liberation he opposed the death penalty for collaborators, turned against Marxism and Communism for embracing revolution, rejected the looming cold war and its threatening violence, and then in The Rebel began to spell out his deeper understanding of violence.

Writing as a philosopher again, he returns to the terrain of argument by explaining what absurdist reasoning entails. Since to conclude otherwise would negate its very premise, namely the existence of the questioner, absurdism must logically accept life as the one necessary good. As in his criticism of the existentialists, Camus advocates a single standpoint from which to argue for objective validity, that of consistency.

One might think that a period which, in a space of fifty years, uproots, enslaves, or kills seventy million human beings should be condemned out of hand. Do such questions represent an entirely new philosophy or are they continuous with The Myth of Sisyphus?. The issue is not resolved by the explanations that Camus gives for his shift in the first pages of The Rebel —by referring to the mass murders of the middle third of the twentieth century. In so doing Camus applies the philosophy of the absurd in new, social directions, and seeks to answer new, historical questions.

But as we see him setting this up at the beginning of The Rebel the continuity with a philosophical reading of The Stranger is also strikingly clear. At the beginning of The Rebel Camus explains:. Having ruled out suicide, what is there to say about murder? Starting from the absence of God, the key theme of Nuptials , and the inevitability of absurdity, the key theme of The Myth of Sisyphus , Camus incorporates both of these into The Rebel , but alongside them he now stresses revolt. The act of rebellion assumes the status of a primary datum of human experience, like the Cartesian cogito taken by Sartre as his point of departure.

Camus first expressed this directly under the inspiration of his encounter with Being and Nothingness. But how can an I lead to a we?

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Acting against oppression entails having recourse to social values, and at the same time joining with others in struggle. On both levels solidarity is our common condition. In The Rebel Camus takes the further step, which occupies most of the book, of developing his notion of metaphysical and historical rebellion in opposition to the concept of revolution. And now, in The Rebel , he describes this as a major trend of modern history, using similar terms to those he had used in The Myth of Sisyphus to describe the religious and philosophical evasions. What sort of work is this? In a book so charged with political meaning, Camus makes no explicitly political arguments or revelations, and presents little in the way of actual social analysis or concrete historical study.

The Rebel is, rather, a historically framed philosophical essay about underlying ideas and attitudes of civilization. David Sprintzen suggests these taken-for-granted attitudes operate implicitly and in the background of human projects and very rarely become conscious Sprintzen , Camus felt that it was urgent to critically examine these attitudes in a world in which calculated murder had become common.

The book provides a unique perspective—presenting a coherent and original structure of premise, mood, description, philosophy, history, and even prejudice. These certainly reached back to his expulsion from the Communist Party in the mids for refusing to adhere to its Popular Front strategy of playing down French colonialism in Algeria in order to win support from the white working class. Then, making no mention of Marxism, The Myth of Sisyphus is eloquently silent on its claims to present a coherent understanding of human history and a meaningful path to the future. Validating revolt as a necessary starting point, Camus criticizes politics aimed at building a utopian future, affirming once more that life should be lived in the present and in the sensuous world.

He explores the history of post-religious and nihilistic intellectual and literary movements; he attacks political violence with his views on limits and solidarity; and he ends by articulating the metaphysical role of art as well as a self-limiting radical politics. In place of argument, he paints a concluding vision of Mediterranean harmony that he hopes will be stirring and lyrical, binding the reader to his insights.

As a political tract The Rebel asserts that Communism leads inexorably to murder, and then explains how revolutions arise from certain ideas and states of spirit. Furthermore, Camus insists that these attitudes are built into Marxism. Marxists think this, Camus asserted, because they believe that history has a necessary logic leading to human happiness, and thus they accept violence to bring it about. As does the rebel who becomes a revolutionary who kills and then justifies murder as legitimate.

According to Camus, the execution of King Louis XVI during the French Revolution was the decisive step demonstrating the pursuit of justice without regard to limits. It contradicted the original life-affirming, self-affirming, and unifying purpose of revolt. Camus focuses on a variety of major figures, movements, and literary works: the Marquis de Sade, romanticism, dandyism, The Brothers Karamazov , Hegel, Marx, Nietzsche, surrealism, the Nazis, and above all the Bolsheviks.

Camus describes revolt as increasing its force over time and turning into an ever more desperate nihilism, overthrowing God and putting man in his place, wielding power more and more brutally. Historical revolt, rooted in metaphysical revolt, leads to revolutions seeking to eliminate absurdity by using murder as their central tool to take total control over the world.

Communism is the contemporary expression of this Western sickness. We might justly expect an analysis of the arguments he speaks of, but The Rebel changes focus. His shift is revealed by his question: How can murder be committed with premeditation and be justified by philosophy? He does not address the Holocaust, and although his had been a voice of protest against Hiroshima in , he does not now ask how it happened. As a journalist he had been one of the few to indict French colonialism, but he does not mention it, except in a footnote.

How was it possible for Camus to focus solely on the violence of Communism, given the history he had lived, in the very midst of the French colonial war in Vietnam, and when he knew that a bitter struggle over Algeria lay ahead? It seems he became blinded by ideology, separating Communism from the other evils of the century and directing his animus there. But something else had happened: his agenda had changed. Absurdity and revolt, his original themes, had been harnessed as an alternative to Communism, which had become the archenemy.

The philosophy of revolt became Cold-War ideology. Because The Rebel claimed to describe the attitude that lay behind the evil features of contemporary revolutionary politics, it became a major political event. Readers could hardly miss his description of how the impulse for emancipation turned into organized, rational murder as the rebel-become-revolutionary attempted to order an absurd universe.

In presenting this message, Camus sought not so much to critique Stalinism as its apologists. His specific targets were intellectuals attracted to Communism—as he himself had been in the s. But it also reflects his capacity for interpreting a specific disagreement in the broadest possible terms—as a fundamental conflict of philosophies.

They are studded with carefully composed topic sentences for major ideas—which one expects to be followed by paragraphs, pages, and chapters of development but, instead, merely follow one another and wait until the next equally well-wrought topic sentence. The going gets even muddier as we near the end and the text verges on incoherence. However the strain stems from the fact that he is doing so much more. Rebellion, Camus has insisted, will entail murder. He has said that death is the most fundamental of absurdities, and that at root rebellion is a protest against absurdity.


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Thus to kill any other human being, even an oppressor, is to disrupt our solidarity, in a sense to contradict our very being. It is impossible, then, to embrace rebellion while rejecting violence. There are those, however, who ignore the dilemma: these are the believers in history, heirs of Hegel and Marx who imagine a time when inequality and oppression will cease and humans will finally be happy.

For Camus this resembles the paradise beyond this life promised by religions, and he speaks of living for, and sacrificing humans for, a supposedly better future as, very simply, another religion. Moreover, his sharpest hostility is reserved for intellectuals who theorize and justify such movements. Accepting the dilemma, Camus is unable to spell out how a successful revolution can remain committed to the solidaristic and life-affirming principle of rebellion with which it began.

In addition, as Foley points out, Camus attempts to think through the question of political violence on a small-group and individual level. Both in The Rebel and in his plays Caligula and The Just Assassins , Camus brings his philosophy to bear directly on the question of the exceptional conditions under which an act of political murder can considered legitimate. Furthermore, because the killer has violated the moral order on which human society is based, Camus makes the demand that he or she must be prepared to sacrifice his or her own life in return.

But if he accepts killing in certain circumstances, Camus rules out mass killing, indirect murder, killing civilians, and killing without an urgent need to remove murderous and tyrannical individuals. In The Rebel, a complex and sprawling essay in philosophy, the history of ideas and literary movements, political philosophy, and even aesthetics, Camus extends the ideas he asserted in Nuptials and developed in The Myth of Sisyphus : the human condition is inherently frustrating, but we betray ourselves and solicit catastrophe by seeking religious solutions to its limitations.

Our alternatives are to accept the fact that we are living in a Godless universe—or to become a revolutionary, who, like the religious believer committed to the abstract triumph of justice in the future, refuses to live in the present. Having critiqued religion in Nuptials , Camus is self-consciously exploring the starting points, projects, weaknesses, illusions, and political temptations of a post-religious universe. He describes how traditional religion has lost its force, and how younger generations have been growing up amid an increasing emptiness and a sense that anything is possible.

He further claims that modern secularism stumbles into a nihilistic state of mind because it does not really free itself from religion. Our modern need to create kingdoms and our continuing search for salvation is the path of catastrophe. Thus in the twenty-first century Camus remains relevant for having looked askance at Western civilization since classical times, at progress, and at the modern world.

At the heart of his analyses lie his ambivalent exploration of what it is like to live in a Godless universe. But to restrain oneself from this effort is to feel bereft of justice, order, and unity. Camus recognizes that hope and the revolutionary drive are essential directions of the post-classical Western spirit, stemming from its entire world of culture, thought, and feeling.

The possibility of suicide haunts humans, as does the fact that we seek an impossible order and an unachievable permanence. Camus never directly attacks existentialist writers, but largely confines himself to describing their inability to remain consistent with their initial insight. His reflexive anti-Communism notwithstanding, an underlying sympathy unites Camus to those revolutionaries he opposes, because he freely acknowledges that he and they share the same starting points, outlook, stresses, temptations, and pitfalls.

Although in political argument he frequently took refuge in a tone of moral superiority, Camus makes clear through his skepticism that those he disagrees with are no less and no more than fellow creatures who give in to the same fundamental drive to escape the absurdity that we all share. This sense of moral complexity is most eloquent in his short novel The Fall , whose single character, Clamence, has been variously identified as everyman, a Camus-character, and a Sartre-character. He was all of these.

Clamence is clearly evil, guilty of standing by as a young woman commits suicide. In him Camus seeks to describe and indict his generation, including both his enemies and himself. His monologue is filled with self-justification as well as the confession of someone torn apart by his guilt but unable to fully acknowledge it.

Sitting at a bar in Amsterdam, he descends into his own personal hell, inviting the reader to follow him. Clamence is a monster, but Clamence is also just another human being Aronson , Camus won the Nobel Prize for literature in , after The Fall was published. The story, a literary masterpiece, demonstrates a unique capacity at the heart of his philosophical writing. Life is no one single, simple thing, but a series of tensions and dilemmas.

Judgment and decision under uncertainty: Theory and measurement. They are prevalent in normal life and are considered essential for maintaining a healthy mental state, although, there are disagreements to the extent to which people demonstrate these positive illusions and whether they are beneficial or not. It is organized into three parts. First the psychological reasons giving rise to positive illusions are described and their likely harm and benefits stated. Second, their negative consequences are presented and their costs are quantified in five areas seriously affected with emphasis to those related to the illusion of control that seems to dominate those of unrealistic optimism.

The costs involved are huge and serious efforts must be undertaken to understand their enormity and steps taken to avoid them in the future. Finally, there is a concluding section where the challenges related to positive illusions are noted and directions for future research are presented. Such illusions are prevalent in normal life and can be considered useful in some cases for maintaining a healthy mental state Taylor and Brown, , , although, there is disagreement to the extent to which people demonstrate these positive illusions and whether they are beneficial or not Colvin and Block, This article describes positive illusions, talks about their potential benefits but also quantifies their costs in five specific fields gambling, stock and other markets, new firms and startups, preventive medicine and wars.

Second, their negative consequences are presented and their costs are quantified in five areas that are seriously affected. The psychological literature is full of examples showing that human judgment is generally optimistic due to overconfidence while considering insufficiently, or even ignoring negative consequences McKenna, ; Kruger, The end result is that people tend to underestimate the chance of failure whereas overestimating the likelihood of success.

This becomes more evident when evaluating future plans or actions requiring forecasts about forthcoming, uncertain events whose benefits are overestimated while their risks are undervalued e. A critical question is if it is possible to achieve some psychologically optimal level by seeing things as only slightly better than they really are in order to benefit from illusions while avoiding the serious risks of acting on false, unrealistic assumptions. To answer this question we need to explore both the advantages and damages associated with positive illusions and take into account the costs involved.

People view themselves more positively compared to how they judge others. Furthermore, people also consider themselves less negatively compared to how others perceive them. Subjects even rated themselves better than others in predicting the sequence of coin tosses Langer and Roth, On the opposite side people tend to undervalue dangers such as disease, serious accidents and other hardships whose existence they accept but believe cannot happen to themselves Dolinksi et al.

On the affirmative side, Taylor and Brown , claimed that positive illusions are adaptive, enabling people to feel hopeful in the face of great difficulties and overwhelming uncertainty. Positive attitudes can contribute to the achievement of tough tasks, like starting a new firm that should not have been undertaken if objective logic had been applied, to work harder, to be more productive and not give up in the face of hardship. Although positive illusions seem beneficial in many cases, the critical question is the extent of their value and whether or not the derived benefits exceed the negative consequences of unrealistic expectations and their possible psychological and financial harm in case of failure.

Research, however, has shown Taylor and Shepperd, that people occasionally will be pessimistic; bracing themselves for negative feedback, if they anticipate that their optimistic out-look might be challenged. In addition, research by cultural psychologists has revealed Heine and Hamamura, that positive illusions are likely to vanish in East Asian populations or they tend to be of different nature Endo et al. The best documented research related to positive illusions comes from the area of self rated health SRH where participants are asked a variant of the following question:.

In many studies Hoorens, ; Jylha, ; Kawada et al. What the SRH studies have shown is that people who feel better are positive about their health tend to live by as much as 20 years longer than those who do not [see Figure 1 , taken from Bopp et al. This type of evidence shows that optimistic thinking and positive illusions need to be considered for their contribution to our well-being and also how their value can be exploited.

Survival of men and women by self-rated health category Bopp et al. According to a recent SRH study administered to more than 8, individuals in Switzerland Bopp et al.

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Figure 1 shows the significant differences between the various answers to the question of the perceived state of health of the men and women who participated in the survey and speaks by itself on the value of positive disposition. Although excessive illusions can also be detrimental, it can be argued that they are preferable to their opposite, that of learned helplessness Seligman, ; Nolen, when people give up trying because they believe that future events cannot be influenced by them in any constructive way.

Ideally, there should be some optimal level between positive illusions and helplessness depending on each specific situation and the benefits and harm associated with each. According to the opinion of the authors, positive illusions, however, seem beneficial to probably the most important human objective, that of a longer life expectancy while also contributing positively to other aspects of human endeavor. In addition to their benefits, positive illusions can also lead to harmful consequences. Similarly, by setting unrealistic goals driven by overconfidence there is the danger that they could not be achieved resulting in unpleasant surprises and unnecessary failures thus leading to financial and psychological harm.

In addition, serious monetary losses can occur, for instance, by believing that gains in casinos are possible through good luck while under valuing the odds favoring casinos illusion of control. People should at least be aware of the negative implications of unrealistic optimism and believing that they can control chance events, in particular when planning and dealing with future oriented situations where predictions for forthcoming, uncertain events are required and the illusion of the planning fallacy prevails Flyvbjerg et al.

There are numerous, prominent examples of this planning fallacy. Instead it was completed 10 years later, costing 15 times the original estimate. The same situation has been true with most mega projects. The Eurofighter Sanna et al. Similarly, the final cost of the Channel Tunnel BBC News, was close to double the original budget with a delay of more than a year in completing it. Even worse, the estimate of the number of passengers to use the Eurostar Eurostar History, n.

In , 20 years after its inauguration the Eurostar has still not managed to carry the passengers predicted in the original forecasts and has made a small profit only in the last 2 years BBC News, In a book Flyvbjerg et al. Interestingly, the overruns have been constant for the 70 years for which data is available.

This may indicate that no improvements in estimating and managing costs have been made over time, or it may be due to other factors. Finally, there are serious concerns that cost underestimation appears to be deliberate in many cases. Flyvbjerg et al. There have been many explanations about the reasons involved in overestimating benefits and underestimating costs and completion times and several suggestions to achieve more realistic estimates have been advanced Flyvbjerg, These suggestions range from automatic budget increases to adopting an outside view, or making estimates based on different perspectives Lovallo and Kahneman, In the next section the challenge of quantifying the costs of positive illusions, with emphasis to that of control is undertaken in five areas while also providing some suggestions as to what can be done to reduce their negative consequences.

As it has already been mentioned, there are benefits from positive illusions but there can also be some grave costs. In this section, an effort is made to quantify such costs in order to comprehend their enormous magnitudes and potential damages and also to induce people to avoid them. The gross global winnings total take minus pay-outs, excluding expenses from legal global casino gambling comes to the staggering sum of close to half a trillion dollars a year The Economist, which is about the GDP of Norway and higher than that of the majority of countries.

Can such huge losses be rationally explained? The answer clearly depends on the level of gambling. A few sporadic visits to casinos are not the same as frequent playing or pathological gambling. In the first case it can be done for its entertainment value and the thrill of winning. In casinos the cost per play can be calculated precisely and the total losses, depending on the number of plays, can be estimated exactly see for example the site Get Gambling Facts, n. At the same time craps is not a popular game either because the excitement of playing this game is lower or because people are not well-aware of the odds involved.

Independently of the size of costs the best strategy is to gamble as few times as possible as it is extremely hard to win in the long run. Some assert that spending time in super luxury casinos with five star restaurants, super shows and exciting surroundings is their main motivation for gambling on the side. For most gamblers the major motivation is the thrill of winning based on the illusion that this is possible and that good luck exists and can be on their side as their belief in the illusion of control motivates them to gamble.

Some people believe they can apply a winning strategy that would beat the casino. Clearly, the cost of such illusions is huge as there is no way to beat chance events, no matter what the strategy being used. The best approach in all casino games would be to bet the entire amount available into a single, or few, plays and then stop whether winning or not. The rule of playing until losing a fix amount is invariably suboptimal as the cost of each additional play favors the casino with the result of an inevitable loss in the great majority of cases.

What is the magnitude of casino gambling costs due to positive illusions and that of control more specifically? According to the Economist article they are huge. Worse, such costs are often paid by people who cannot afford it resulting in negative financial consequences for their families and themselves. There is a big difference between gambling and stock markets. In the former, as we saw, it is impossible to win in the long run while in the latter the exact opposite is true.

Considerable research has shown that such beliefs are illusory while it is well-known that the stock market, at least in advanced countries, grows consistently over the long run ranging from 7. However, it must be understood that long term may mean more than a decade in some instances, making it necessary to be patient and not be influenced by short term fears or greed Makridakis et al.

In the short term the cost of market losses can be many times higher than that of casinos. In addition, there were similarly high losses related to positive illusions, and more specifically to that of control, in other markets than that of stocks. This is particularly true in real estate but also in commodity markets. It is not, therefore, uncommon for some people to lose huge fortunes in the hope of greater returns by downplaying or ignoring uncertainty and risks associated with short term investing, or better gambling in the belief they can predict short term movements in these markets.

Stock and other markets are unpredictable in the short and medium term while there are two types of illusions affecting investors. First, they believe that they can correctly predict, say profitable stocks or the right time to buy or sell, events that are actually random, or very close to that. Alternatively, they assume that someone else, an expert can do that for them. Unlike casinos, stock and other markets can produce significant gains during periods of boom and consistent positive returns in the long run.

The question and big challenge is how to retain as much of the gains and minimize the losses during periods of downturns. Such strategy coupled with a well-diversified portfolio that is assuming that the right stocks cannot be selected and should be chosen randomly is the optimal way to invest and can be implemented by buying exchange traded funds ETFs; Bogle, , that are built assuming inability to predict both the best market timing as well as the most appropriate stocks.

Perhaps starting a new firm demonstrates more than any other area the advantages and costs of illusions. This means that about a 10th of firms fail each year. This is a huge discomfort for the owners and employees of these firms. On the positive side there is renewal and creative destruction Schumpeter, as the new replaces the old. It lists 30 questions some of which are the following:.

By answering these questions the site comes up with a probability that provides a more objective assessment of the chance of success. Practically, all new firms start small and only a small percentage manage to survive and grow over time, some to even great sizes. The majority of new firms, however, fail to survive more than a few years obliging their owners to stop operations or go into bankruptcy.

Given the small chance of success does it make sense to start a new firm? What can be asserted is that without over optimism few would dare to start a new firm if they knew the high chance of failure. But in practically most cases, such chance is downplayed or ignored even by founders who have started and failed before and who know well the chances of failure. Unrealistic optimism is the foundation on which new firms are established. For the owners who fail, positive illusions are detrimental as they have to face the financial and psychological harm of bankruptcy.

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For society as a whole, however, positive illusions are beneficial as they fuel creative destruction and add to the collective progress, increasing the rate of employment and the offering of new innovative products and services. Just consider three newly founded firms, Google, Facebook, and Alibaba. This amount probably compensates for all firms that have failed while at the same time these three firms have provided new, innovative services to the whole world.

Without over confidence people would have been deprived of Googling, being able to keep in constant touch with friends and acquaintances or trading safely with the world using Alibaba. These benefits compensate for the costs of individual firms failing and the hardship of their founders. Societal progress requires creative destruction to replace the old with the new. Founders of new firms are extremely useful as they contribute to such creative destruction. To minimize or avoid the harm from failure, founders must be aware of the odds of failure so that they should not get caught by surprise and instead adopt the right mentality not feeling ashamed if they become bankrupt but consider that they have gained valuable experience that can become useful in the future.

In addition they should have a plan B so that they are not totally financially ruined. Are the potential benefits of preventive medical tests greater than the harm including monetary costs they may cause? In this section we will answer this question by concentrating on three preventive tests: general checkups, mammography for women, and prostate tests for men. We will show that preventive medicine is another illusion which makes people believe they can defeat disease and extend their life expectancy, but in final analysis it causes more harm than benefits overall.

Yearly checkup examinations started in the early s and have continued since then, although many studies going back to the s have shown no benefits from them Mehrotra et al.

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According to the independent Cochrane Foundation Krogsboll et al. To many people, health checks intuitively make sense, but experience from screening programs for individual diseases have shown that the benefits may be smaller than expected and the harms greater. The final conclusion of the authors of this study is:. Yet, despite evidence against routine annual examinations, many family physicians recommend them Mehrotra et al. In addition to the monetary cost, there could be additional harm caused by checkups that include pointless radiation and over treatment resulting in unnecessary medical actions Consumer Report, In his NYT article Welch et al.

Their advice is to avoid all preventive medical care. Today, however, there is an intense debate regarding the value of any screening, at any cost, with those opposing it saying that the potential harm is greater than the benefits Science Newsline Medicine It reduces the risk of getting breast cancer by one-third. We have also epidemics of mastectomies and prostatectomies because people seem to be more worried about dying than they are interested in living. Mammography screening also requires a huge monetary cost that could be spent on more beneficial causes e. And five of those men would have lifelong complications, including impotence and incontinence.

Then why should a man be screened if the harm of false diagnosis is 30 to times the estimated benefit, resulting in less than 0. His conclusion is that the screening is done because of financial interests as it increases the number of additional tests and prostatectomies. He asserts:. A lot of research has shown that the potential benefits of preventive medicine are illusory and that the harm involved is considerably greater than whatever the advantages. Unfortunately those who profit from medical checkups and screening exploit the human psychological need to reduce future uncertainty by the false claim that preventive medicine identifies potential health problems early so that they can be dealt with before they become more serious.

Objective research has shown that uncertainty cannot be eliminated by preventive medicine that has an opposite effect than that intended, and causes much more harm than gains. The uncertainty of when disease is likely to strike and when death will occur cannot be eliminated with any degree of certainty the exception being our own feeling of how we feel, see section on SRH above at least at present with preventive medical tests.

The critical question of what can be done is considered in the concluding section. Wars are, indeed, influenced the most by positive illusions at a massive cost to the taxpayers and with grave human suffering. In this section, the cost of three wars Vietnam, Afghanistan, and Iraq will be appraised and the optimistic predictions of victory leading to these wars will be presented. The reality proved quite different as described by Stewart , who talks of the anarchy that begun just 6 months after the start of the war. This article also asserts that the war has killed at least , Iraqi civilians and may have contributed to the deaths of as many as four times that number without counting security forces, insurgents, journalists and humanitarian workers.

Worse still, it estimates that such claims will exceed the billion dollar mark at the end of the second decade. These estimates indicate a huge monetary and humanitarian cost with practically no benefits as the ISI would not have existed if Saddam Hussein had stayed in power. As US firms left the area because of increased insecurity, Iraq started selling a sizable and growing percentage of its oil production to China which is providing drilling technology and capital investments to the country.

The Iraq war was not the first to cost trillions of dollars.

Ironically, to fight the fundamentalists that the USA and Saudi Arabia had trained and financed to combat the Soviets who had invaded Afghanistan in December The USA was obliged, like the British and the Soviets before them, to leave Afghanistan 13 years later, at the end of , after having paid a huge price both monetarily and in human suffering. The longest overseas history war has cost the USA alone, one trillion dollars and it would require spending several hundred billion dollars extra in the future for the 10, soldiers remaining in the country and medical and disability expenses for war veterans.

These costs do not include interest payments for the increased debt caused by the Afghan war or the extra pension expenses of the military associated with this war. The human cost of the war has been more than 20, dead soldiers and contractors, almost , injured and with medical problems and , disability claims. Sadly, no one, even the strongest supporters of the war, has claimed any benefits.

The war in Vietnam is another sad story with an extraordinary cost, the illusion of great benefits and no actual ones. At the time the loss of South Vietnam to the communist North was feared by US policy makers that it would create a domino effect for other countries like Laos and Cambodia but then also Thailand, Malaysia, Singapore, and even Indonesia to fall next under communist domination.

Most ironically, it is communism that has totally collapsed and countries like China and Russia that were supporting Vietnam in its war with the USA have abandoned communism and seen the greatest increase in their number of billionaires. US involvement in Vietnam started in the s, not long after the French left the region.

It was increased in the early s and was elevated when regular US combat units were deployed in Alpha History, n. It was expanded into Laos and Cambodia and was peaked in when North Vietnam launched the Tet Offensive that failed in its goal of overthrowing the South Vietnamese government but convinced a large segment of the US population that winning the war was illusory despite the massive US spending and the heavy losses in dead and injured.

There is also huge human suffering. It is estimated that almost 60, US troops were killed, more than , were wounded, 23, suffered total disability and 2, were missing. A worse statistic was the number of 70,—, Vietnam Veterans who committed suicide and another , veterans who suffered psychological trauma because of the atrocities of war they experienced. The illusion of underestimating the real factors surrounding a war and the optimistic assessment that the situation can be controlled involves an immense cost and no benefits, at least in the three wars covered in this section.

Yet, intelligent and well-meaning people believe otherwise causing grave suffering and wasting a large amount of money that could have been used to improve the lives of a great number of people in their country. It has shown that accepting uncertainty and avoiding illusions encompasses substantial benefits and ensues in huge reductions in monetary costs and harm in general, although there could be some undeniable benefits from some positive illusions.

What we must do is exploit the benefits of positive illusions while avoiding their costly, negative consequences even though psychologically this is difficult. Ideally, we should be able to strike a balance between the benefits and costs by estimating them for each case as accurately as possible. We live in an uncertain world and we must accept living with the ensuing uncertainty. It is clear that uncertainty creates anxiety and involves risks. Some uncertainties are easy to deal with. Whether or not it will rain tomorrow can be dealt with by being dressed appropriately and having an umbrella, thus eliminating the risk of getting wet.

If it does not rain, the cost of being prepared is small and acceptable weather forecasters overestimate the chance of rain on purpose for this reason. The uncertainty of investing in the stock market and the risk of losing money is more serious but not investing could include a significant opportunity cost if the market goes up.

It is possible, however, to balance the two risks investing and the market goes down and not investing and it goes up if the right type of investment strategies are followed although investments can never be risk free. The possibility of becoming seriously ill is another uncertainty with much more serious consequences as the risk in such case is huge and may even lead to death.

Ironically the best strategy in this situation is to avoid preventive medical screening and not even go close to a doctor unless feeling sick. Even though such strategy seems counter intuitive, it must be followed as the harm of preventive screening is much greater than all their possible benefits.

Lost Illusions (contains a biography of the author and an active table of contents) Lost Illusions (contains a biography of the author and an active table of contents)
Lost Illusions (contains a biography of the author and an active table of contents) Lost Illusions (contains a biography of the author and an active table of contents)
Lost Illusions (contains a biography of the author and an active table of contents) Lost Illusions (contains a biography of the author and an active table of contents)
Lost Illusions (contains a biography of the author and an active table of contents) Lost Illusions (contains a biography of the author and an active table of contents)
Lost Illusions (contains a biography of the author and an active table of contents) Lost Illusions (contains a biography of the author and an active table of contents)
Lost Illusions (contains a biography of the author and an active table of contents) Lost Illusions (contains a biography of the author and an active table of contents)
Lost Illusions (contains a biography of the author and an active table of contents) Lost Illusions (contains a biography of the author and an active table of contents)
Lost Illusions (contains a biography of the author and an active table of contents) Lost Illusions (contains a biography of the author and an active table of contents)
Lost Illusions (contains a biography of the author and an active table of contents)

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