A few months back, I posted a controversial video on this website titled “College Education is a Defensive Mechanism”. You can watch the video and leave me your thoughts in the comment section by clicking here.
While I in no way want to dissuade anyone from going to college, what I was trying to do was to get people to think seriously about their motives for doing so. Why were they willing to go into debt to get a college degree? What did they hope to get from the experience?
Many people think that the only way to make money and to have some job security is by tacking a college degree to their walls. While that may be true for certain fields, it’s not true of life. Most people go to college for all the wrong reasons and because they are misinformed. Just because some college graduates have reached a certain level of success, the assumption is that college education = success. But as any recent jobs report (or the experiences of the so-called “Boomerang Generation”) can tell you, that reasoning is not panning out in the real world. Why not?
Charlie Munger had an interesting thought about why people make bad choices in life. In one speech, he mentioned that some people assumed past success guaranteed future success, and called this reasoning “Pavlovian Association”.
Here’s what he said:
I never took a course in psychology, or economics either for that matter, but I did learn about Pavlov in high school biology. And the way they taught it, you know, so the dog salivated when the bell rang. So what? Nobody made the least effort to tie that to the wide world. Well the truth of the matter is that Pavlovian association is an enormously powerful psychological force in the daily life of all of us…
And then he gives an example of Pavlovian Association in action when it comes to price-setting:
You’ve got two products; suppose they’re complex, technical products. Now you’d think, under the laws of economics, that if product A costs X, if product Y costs X minus something, it will sell better than if it sells at X plus something, but that’s not so. In many cases when you raise the price of the alternative products, it’ll get a larger market share than it would when you make it lower than your competitor’s product. That’s because the bell, a Pavlovian bell — I mean ordinarily there’s a correlation between price and value — then you have an information inefficiency. And so when you raise the price, the sales go up relative to your competitor. That happens again and again and again. It’s a pure Pavlovian phenomenon.
This tendency to think that past success guarantees future success is why so many people make bad decisions. And if you aren’t happy with your present situation, it might explain how you got where you are today.
One of the hardest things in life can to reevaluate the long-cherished belief systems and rationale behind the decisions we have made – but don’t let that stop you. Being successful means taking a chance and not going with the crowd.