Needed: Investors With Delusions

I recently discovered that I am delusional. But just for the record—so are you.

In survey after survey, over 80% of those questioned consider themselves above average in driving skills, self-awareness and general knowledge—really almost anything. I still recall the frustrating comments of an elementary school principal as he wearily told me that over 90% of his parent body believed that their children were geniuses. Yet a growing number of experts say that self-delusion in modest doses is actually desirable, a sign of a healthy and normal personality; one that can help an individual persevere in the face of repeated failure.

This persistent over-estimation of our own specialness may help explain our fascination with stories of truly unique and iconoclastic individuals, who risked everything to challenge the conventional wisdom of their day in the service of advancing knowledge or wisdom: Abraham, Socrates, Jesus, Copernicus, Galileo and Darwin are among the hundreds, perhaps thousands, of well-known examples of individuals who looked out at the world and saw it in a fresh new way.

Today we are the grateful beneficiaries of their combined efforts. And yet we wonder what set of perverted incentives caused the apparently ignorant, superstitious or foolish people to feel so threatened by the new information that they needed to act, in some cases violently (Galileo was put under house-arrest by the Catholic Church; Socrates was sentenced to death).

It would be reassuring to know that today we are much more enlightened and things are different; that we are more open to change and that, after all, proof is proof. Perhaps we are enlightened, but if so it isn’t by much. Progress still needs individuals who are willing to suffer, sometimes greatly, in order to successfully confront conventional wisdom—that is still the operative rule.

Medical Cases

Consider Barry Marshall, an unknown M.D. from a small town in Western Australia. After a few years of investigation he found a direct link between ulcers and the presence of H. Pylori bacteria, ultimately demonstrating his point dramatically by ingesting the bacteria himself and giving himself an ulcer. But the world medical establishment had no interest in data that contradicted what they believed to be true, and certainly not from some nobody from nowhere.

Marshall discovered that despite overwhelming clinical evidence—despite the science—other doctors simply refused to believe it. In an interview with Discover magazine, he recalled his experience: “To gastroenterologists, the concept of a germ causing ulcers was like saying that the Earth is flat. After that I realized my paper was going to have difficulty being accepted.” Marshall persisted, and received the Nobel Prize in 2005.

Starting in the 1960s Michael Merzenich was one of the early observers of plasticity in the brain—its ability to modify and repair itself. Along with a number of other scientists he was able to show that the brain had the ability to establish new pathways and even redirect functions to different parts of the brain, contradicting the previous understanding that such flexibility was impossible after early childhood. It took more than 20 years before plasticity became fully accepted, but not before the scientists who identified and recorded it were treated to years of professional and personal derision and attack.

Despite the science, even the most rational of us are human beings, and human beings are influenced by social incentives that have stood in the way of progress in the past and are likely to do so in the future. Ironically, these are not perverted incentives. These incentives are important, even critical to our lives. They are responsible for our desire to create a civil society: to behave generally within socially acceptable limits, keeping us connected to our families, our friends—even to strangers. And being connected is a sign of a normal and healthy life. But these otherwise positive attributes in different contexts can and will push us into behaviors that don’t serve us well, either individually or collectively, as we have seen above.