Monday, February 10, 2014

This Time It’s Different - The Crippling Effect of the Internal Narrative

Man is a credulous animal, and must believe something; in the absence of good grounds for belief, he will be satisfied with bad ones. - Bertrand Russell

Faith may be defined briefly as an illogical belief in the occurrence of the improbable. - H. L. Mencken

In the years leading up to the financial collapse of September of 2008, home buyers snapped up properties with the belief that as informed buyers, they had done all the research necessary to assure themselves that their investment was a safe bet.

Many self-described experts would explain that interest rates were at all time lows, banks were practically taking all the risk with their no-money-down mortgages and property values always go up, providing a much better return than other investment vehicles and with practically no risk.

They had done some research, enough to convince themselves that they were an informed investor and the more they told themselves they were informed, the more they believed it.

Meanwhile, they did not notice the fact that many investment institutions were shorting the economy (thus predicting a fall in the market), that the projected returns on property investment were in some cases double those as promised by Bernie Madoff in his massive investment scam (making them too good to be true) and that their understanding of investing violated the rule of positive correlation – that higher returns require higher risk (not lower risk as people had convinced themselves to be the case).

They had succumbed to the dark side of the internal narrative, that a story told enough times, reinforced with insufficient or incorrect data, eventually becomes believable (at least to themselves).  Their flawed understanding was reinforced by banks (“if I was wrong, the banks wouldn’t lend me so much money”), realtors who promoted a healthy real estate market (for their own gain, of course), the Federal Reserve itself which touted a strong economy and the other self-taught investors who were telling the same story.

Their internal narrative was so strong that it convinced them that they were right, blinding them to the cognitive dissonance clearly present – that their facts and desires were not in congruence.

And yet when everything hit the fan, everyone acted surprised or claimed victimhood when in fact they had helped architect the collapse (not to look past Wall St.’s contribution to the debacle), thus proving the adage that:

No water droplet believes it is responsible for the flood.

Strong beliefs, faith and hope are powerful motivators and many times are necessary to carry one through difficult times.

But the next time you are evaluating a politician or political party, a business opportunity, a potential investment, a new project or a relationship or you are about to embark on a repeat pass in any of these areas, pay attention to your internal narrative.

If you are totally and utterly convinced that you / they will be successful or that you / they are right “just because” or because someone says “this time it’s different” (or the ever popular “trust me” or “it just feels right”), it may be that your internal narrative is shouting so loudly that you are unable to perceive the cognitive dissonance that exists between facts and reality.  If you can’t answer questions such as “why” and “how do I know” objectively, it is highly possible that your internal narrative is guiding you in the wrong direction. 

In such situations, it might be useful to either find yourself an objective observer or explore the theory of the Socratic Method (or do both) to stimulate the process of critical or self-critical thinking and to confirm that your internal narrative is whispering truths instead of shouting lies. 

Once truths have been ascertained, then the internal narrative becomes a powerful, positive force, since one can then truthfully and objectively answer the question “How do I know I will succeed with …….”.

Unfortunately, many who are lazy, dishonest or who prefer fantasy over reality prefer to not embrace such a process because there is nothing that bothers them more than the inconvenience of how reality interferes with a good dream.  Also unfortunately for them, failure to honor and respect reality unleashes the potential to manifest a nightmare instead of a powerful dream for themselves and others.

What is your internal narrative telling you?

Is it whispering truths or shouting lies?

How do you know?

In service and servanthood,



  1. Harry first off id like to speak on the part of those who you say are lay or perfer fanasy. I think thats where most of our problems lie in much of this province. And perhaps it isnt so blantant as lay or livin in fantasy; I believe its more to do with being too distracted and busy with what they were sold to believe is a normal life. Many have little time to reflect upon politic's, or look at the bigger picture of life in general.

    My internal narritive was born of Walden pond. I bought a very very cheap home. Run down with tree's growing inside and took a year to fix it myself. I can't see a mortage being a good investment when I look at mere ageing demographics where the large number of home owning baby boomers will be passing away in the next 20 years leaving a flood of homes on the market. I paid off all my credit cards, my car loan and took a huge loss on my city home. However now I sit outside the confines of debt slavery.My investments now are on inproving my energy consumption. I installed a heat pump, new windows, insulation, led lights. No for the environment or global warming. For the mere fact of preventing others from taking my money which (unfortunately perhaps?) translates into my personal freedom. I spent the last year collecting old windows tossed out for trash to build my large greenhouse this spring. Another dependance I am looking to lessen to become more free. So what do I get for these investments? My own time. My meagre military pension is what I took as a guideline to my "means" and I invested my pre pension money so I can live in relative comfort on just that. In this new found time I've discovered a love for photography. With my time I've rescued I can no travel to photograph places off the beaten path; which is slowly turning into a means of supplementation. Is this the final direction for me? I have no idea. However I do have my freedom back; to make future decisions with that in mind.

    1. Thanks for your detailed comment, Lee.

      What I see as the key separating factor between you and many others is that you made a choice to accomplish something and you put a plan in place to make it happen. Many people make other choices and then complain about where those choices leave them or they complain about their leaders that their leaders aren't getting things done for them ... but they never do anything to elect smarter leaders.

      More people have time than are willing to admit (like the person who lives on Facebook but who complains that they never have time to get things done). They have made choices that limit their time and exacerbate the real issue - that they are unable to set goals or prioritize their execution.

      I've watched parents tending on terminally ill children focus on them around the clock and savor every moment while others with lots of time (or money) fritter it away on the unimportant (while complaining they are short of both). It's all about choices.

      You are an example of someone who sets goals and makes the choice to accomplish them.

      More people should be like you ... and then the world would be a better place.

      Create a great day.