6

THE NEW ECONOMY OF STORIES

There has been a fundamental shift in the balance of power between consumers and salesmen over the last generation and it points in the direction of consumers. The quantity and quality of “interior” pleasures is higher than ever before, so many people shift more toward these very cheap entertainments.

Because of this rise of interiority, we’re saving money on our learning and entertainment and we’re also telling ourselves more stories. Stories are a big part of how we think, but do we really learn from them or are they just entertainments? Should you embrace your tendency to use the narrative mode or should you be suspicious of it?

One good approach to understanding the costs and benefits of story-based reasoning is to start with…a story.

In 1984 Thomas C. Schelling published a fascinating yet neglected article called “The Mind as a Consuming Organ.” Schelling is a former Harvard professor and a Nobel laureate in economics. Schelling won the Nobel Prize for his analysis of strategic behavior and game theory, especially as he applied those ideas to military conflict and nuclear deterrence, and he finds most of his readers in those areas. “The Mind as a Consuming Organ” was never published in a professional refereed journal and if anything it has attracted more attention from political scientists. Nonetheless it’s Schelling at his best.

Schelling is a curious character, as anyone who knows him will attest. (I am honored to report he was my doctoral adviser.) Upon first meeting he doesn’t seem like a world-class intellect. He has the down-to-earth demeanor of a man who has been selling Hush Puppy shoes in the local mall for the last thirty years. He has short hair, a slight build, and a welcoming smile. When he encounters an idea he usually responds in a roundabout manner. You might hear a story about how he tried to quit smoking, what his grandmother used to tell him, or why terrorists won’t want to use any nuclear weapons they happen to acquire. Typically, at first you think that Schelling didn’t listen to what you said because his story seems so off base; a minute later you realize that maybe he has a point, albeit a wrong one; five minutes later you understand he was well ahead of you the entire time.

The interesting thing is, Schelling usually presents his ideas in terms of stories. This is unusual in a profession obsessed with mathematics and formal modeling. No matter what you say to him, Tom will start thinking about which kind of story might be relevant for formulating an insightful response. And once he starts narrating, he gets a dreamy look in his eye and no one wants to interrupt. The interjections and qualifications to the story are often as good as the main narrative itself.

The essay “The Mind as a Consuming Organ,” as usual, draws upon Schelling’s personal musings. How many other economists start their essays with a sentence like “Lassie died one night”? Here’s the whole opening:

Lassie died one night. Millions of viewers, not all of them children, grieved. At least, they shed tears. Except for the youngest, the mourners knew that Lassie didn’t really exist. Whatever that means. Perhaps with their left hemispheres they could articulate that they had been watching a trained dog and that that dog was still alive, healthy, and rich; meanwhile in their right hemispheres, or some such place (if these phenomena have a place), the real Lassie had died.

Did they enjoy the episode?

Schelling emphasizes that we “consume” stories through memories, anticipations, fantasies, and daydreams. Concrete goods and services, such as Lassie programs, help impose order and discipline on our fantasies and give us stronger and more coherent mental lives.

Of course consuming stories is not just about watching television, even though the average American does that for several hours in a typical day. If the tube bores us, we play computer games, read novels, reimagine central events in our lives, spin fantasies, or listen to the narratives of our friends. A successful blog is often about the Bildungsroman, or life development, of its author. Even watching the news, or following a presidential campaign, is in large part driven by our nearly insatiable demand for stories, even if it is stories about politicians. Consuming stories is not just a sideshow to the broader economic problem but rather it is one of the central human passions and one of the central sources of our well-being, including our satisfaction as consumers.

You’re not just buying a sneaker, you’re buying an image of athleticism and an associated story about yourself. It’s not just an indie pop song, it is your sense of identity as the listener and owner of the music. If you give to Oxfam, yes you want to help people, but you also are constructing a narrative about your place in the broader world and the responsibilities you have chosen to assume.

The Portuguese author Fernando Pessoa wrote: “The buyers of useless things are wiser than is commonly supposed—they buy little dreams.” That is a big part of what markets are about. Whether you are buying cosmetics, a lottery ticket, or an oil painting, you are constructing, defining, and memorializing your dreams into vivid and physically real forms. Gabriel García Márquez, in his Living to Tell the Tale (Vivir Para Contarla so “Living in Order to Tell It” is arguably a better or at least a more literal translation), understood the power of stories. His opening quotation notes: “Life is not what one lived, but what one remembers and how one remembers it in order to recount it.”

It’s not just Márquez; there is a long-standing “underground” Spanish- and Portuguese-language tradition stressing the story-bound nature of our lives, derived most of all from Cervantes’s Don Quixote. The Don starts the novel living in a dream of his own making. As the narrative progresses in book 2, the Don takes the numerous stories written about him and Sancho Panza to be his major touchstone for reality and he lives in reference to those stories. It’s the contrast between the published works on the Don’s adventures and how he interprets those works in his mind that creates the framework of meaning for the Don’s quests. I think of Don Quixote as providing some of the earliest glimpses into how to live a life by assembling small cultural bits and in the process spinning a story about yourself (and your loved ones) from those bits. In this sense Don Quixote is the first truly modern or perhaps even contemporary novel. The Don is assembling bits about himself by drawing upon the commercial culture of his time, namely the enormous secondary literature of tracts, pamphlets, and books based on his (fictional) exploits with Sancho Panza.

It may sound like I’m talking only about literature but I’m also talking about economics. I think of people as creating their own economies inside their heads.

When it comes to understanding the social world, the individual human mind really does matter. Traditional economics is reasonably good at predicting how people behave in a variety of well-defined environments, especially when people understand the nature of the constraints they are facing. If the price of coffee goes up, people will go to Starbucks less often. If income goes up, people will seek out safer rather than riskier jobs; you will find poor Honduran immigrants rather than wealthy heiresses working on dangerous fishing boats. To understand these matters we can turn to traditional economics and do without broader contextual knowledge about human psychology.

But those are not the most fundamental questions about our world. Traditional economics has a tougher time with “What do people believe?” and “How do people order their internal realities?” and “How does that order shape our emotions?” Yet without a grasp on those issues, economics will fail repeatedly, most of all when we are trying to understand large-scale social phenomena. For instance economics has failed at predicting or even understanding stock market crashes and changes in social fads, and at addressing straightforward questions like why you can’t always just pay people to follow your managerial orders. (Partial answer: If people believe you are trying to control them with the money, rather than reward them, they will rebel rather than cooperate in response to the offered payment.)

In other words, human perceptions are all-important for understanding how incentives translate into outcomes. Unless you know how people think the world works, you can’t predict their behavior very well. And sometimes human perceptions are at odds with reality. Remember the run-up toward the second Iraq War when Saddam Hussein stonewalled and refused to give in to then-President Bush? It turned out that, according to later evidence, Hussein never thought that Bush would actually send U.S. troops through to Baghdad. What Bush thought was deterrence was viewed as an empty bluff. Saddam, at the same time, thought it very important that the Iranians believe he had weapons of mass destruction. And so he pretended he did and of course he fooled many other people as well. A traditional economist might find Hussein’s behavior puzzling, or he might describe it as “irrational.” After all, Saddam Hussein ended up losing a country, his freedom, his sense of honor, and then his life. But a focus on the importance of belief suggests that the evil and tragic saga of Saddam Hussein is in fact a very human story based on some common imperfections.

One of the most fundamental truths about the social world is that objective reality does not determine what people believe. Or in the language of economics, expectations are not generally rational. People misperceive reality or people self-deceive to construct a more pleasant reality within their own minds. Or sometimes we prefer the tragic, such as when we tune in to watch Lassie die. Maybe some people are just plain flat-out unable to figure out how things work. Most significantly, we interpret real-world evidence through our stories and through the internal ordering imposed by our minds.

Here’s a simple schema of how economics fits into this broader view of social science:

Traditional economics focuses on the top of the pyramid, namely how people respond to objective changes, such as changes in incentives. (Perhaps the other social sciences don’t focus enough on incentives, but that is another story.) But it’s not enough to think in terms of incentives because all incentives are set and interpreted in a particular context, and that brings in psychology. The deeper foundational questions—namely the nature of the individual mind—are at the base of the pyramid and indeed at the base of all the social sciences. So you can think of this book as a rebellion against traditional economics or as a micro-foundation for a better economics or as neuroeconomics; alternatively, I view it as a return home to the original foundations of economics.

It may come as a surprise that the origin of the study of economics was substantially psychology, perception, and mental ordering. As I’ve already discussed, Adam Smith, the father of modern economics, wrote not just The Wealth of Nations but also a book on human psychology, namely The Theory of Moral Sentiments. Smith’s life’s work was to mix economic reasoning with Stoic moral philosophy (Seneca, Epictetus, and Marcus Aurelius, plus their French Renaissance successor Montaigne) and applied psychology, most of which he generated from his own reasoning. The Stoics were themselves obsessed with the proper internal order of the mind and in particular how to manage pain, how to deal with what you can never have, and how to lower your expectations so that life seems like a pleasure rather than a burden. Whereas the Stoics sought to understand the psychology of the Roman Empire, exile, and the slave whip, and Smith studied the pin factory, I am looking at Facebook, Google, and the iPod.

The later and more general movement of “behavioral economics” has brought psychology very directly into economics. In addition to all the formal research, behavioral economics is represented by such popular books as Dan Ariely’s Predictably Irrational, Richard Thaler and Cass Sunstein’s Nudge, and Ori and Rom Brafman’s Sway. In the most general terms, behavioral economics suggests that human decision-making is often far from rational. For instance maybe we overestimate our prospects of success when we start a new business or maybe we are very bad at evaluating risks with very small probabilities. In the behavioral view we are ruled by emotions and often we use dysfunctional decision-making procedures and rules. However reasonable we may claim to be, so often reason just doesn’t stick. Behavioral economics has made economics more realistic and arguably it is the single most influential trend in the economics profession today.

I’m all for behavioral economics and if you wish, you can think of this book as a study in behavioral economics. Nonetheless I am going beyond standard behavioral approaches in at least four ways. First, I emphasize neurodiversity—in this case the autism spectrum—as an important feature of human diversity. This investigation is a kind of neuroeconomics but not as that word usually is employed. Most of current neuroeconomics assumes that people are the same and scans their brains while they make economic decisions in the lab; the goal is to uncover which part of the brain made the decision and thus to understand whether the decision was ruled by fear, the prospect of reward, and so on. In contrast, I start with the natural neurological differences between human beings and see how those differences shape real-world outcomes.

Second, I focus on contemporary culture and the web, two topics that behavioral economists and neuroeconomists have neglected. Third, the analysis is dynamic. Most behavioral studies look at human psychology at a single point in time, such as how psychology might affect the pricing of mutual funds or the placement of the milk in a supermarket (it’s almost always in the back, to spur impulse purchases of candy and soda as you walk to get your dairy). In contrast, I am asking how the evolution of culture and technology will make a difference for modern life and how it will alter the relative importance of our cognitive strengths and weaknesses.

Finally, I emphasize the notion of stories. Although analyzing stories is prominent in what is called “narrative psychology,” the notion of stories has yet to have much impact on behavioral economics, even though most people love to think in terms of stories. Most people are programmed to think in terms of stories and they have an especially good memory for stories. “The economics of stories” is one of the next frontiers in social science but most economists are still behind the curve, with the exception of course of Thomas Schelling.

Once you consider the power of stories, the traditional economist’s notion of scarcity becomes inverted. Traditional economics is usually about acquiring things and thus overcoming scarcity, but a lot of human behavior is about creating artificial scarcity and then choosing a quest. Quests, which I define as stories of overcoming scarcity, require at least two kinds of scarcity. First, if you want to go on a meaningful quest, you must be lacking in something. Second, the protagonist cannot focus on everything and thus must choose and discard priorities to define a preferred quest.

Stories and quests are very old and time-honored methods of mental ordering. But the ordering isn’t just about arranging a set of given units or concerns, as you might file a collection of baseball cards. Discarding and whittling down are fundamental features of this ordering process, which has something in common with cleaning out an old bureau. Stories aren’t just about creating context and building. Stories also require us to take away or eliminate material to make the resulting pieces cohere, stick in our minds, and constitute a plot based on a struggle to achieve something. In essence the new cultural economics is about how corporate marketing and individual self-assembly combine to create stories of meaning based on quests, scarcity, and uncertainty.

The Lord of the Rings works so well as a popular story precisely because the major characters do not have magical powers; that said, the idea of magic shapes their quest and the excitement of magic continually titillates the imagination of Tolkien’s readers. Frodo and his band spend most of the story tracking down a very powerful ring. Once the ring’s fate is determined the story is essentially over and it is time to sum up the fate of each character and close the book.

Most good fantasy stories offer elaborate explanations of what kinds of angelic transformations are possible, what you must do to hunt down a unicorn, and what limits are placed on magic powers. Readers will forgive just about any kind of unrealism, as long as the rules are consistently enforced.

“Why can’t the long-separated prince and princess just come together and marry?” a naïve child might ask, but having seen the movie The Princess Bride you know better. Kidnappings, masked men, babies switched at birth, dragons guarding borders, and warring kingdoms are common plot devices, all designed to make sure that not everything comes too easily. Harlequin novels offer up their own constraints, most notably social prejudices and forbidding fathers, common themes in Bollywood as well. If the stories bore quickly, it is because there are only so many ways of summoning up admiration from afar and then maintaining the tension. And if the romantic fantasy has cyber communication between the two protagonists, such as in the Tom Hanks/Meg Ryan movie You’ve Got Mail, the two parties can’t know each other’s real-world identities until the end of the movie approaches. Of course stories of constraint are getting harder to write in this modern, information-rich age of communication and this is one reason why dramatists set so many of their tales in the past.

Samantha, the protagonist of the old television series Bewitched, faces the same problem that Harry Potter does. The drama works only if there are limits to her magic. In part the show solves this problem by having Samantha vow to live among mortals and eschew her magic (n.b.: she doesn’t always keep the agreement, so the viewer faces some probability of titillation). And in part the show works because Samantha is hard at work on one of the most difficult problems of all: creating and sustaining a happy marriage, in this case with the mortal man Darrin, her husband.

More people are transfixed by Dante’s Inferno than by Dante’s Paradiso. It’s not that we all are Satan worshippers or secretly aspire to be sent to the tortures of hell. It’s simpler, namely that paradise doesn’t usually make for good fiction. If you look closely at the structure of Dante’s poem, he keeps the tale of paradise interesting only by a series of literary tricks, such as postponing entry into paradise, recapitulating the journey to date, and recapping the narrator’s inner psychological tensions. In other words, it’s not really a tale of paradise at all because paradise has no need of epic poetry. You know the end of the poem is approaching when Dante writes: “And so my pen skips and I do not write it, for our imagination is too crude, as is our speech, to paint the subtler colors of the fields of bliss.”

I’m suggesting that these difficulties in constructing fictional narratives reflect broader difficulties in how we bring meaning into our lives and how we make our personal stories cohere. In a mental universe with no story-based hierarchical principles, you’re a hungry and ravenous being trying to own or consume as many commodities or bits of information as possible. In a story-based view, in contrast, very often you already have more bits than you know what to do with. We whittle away at the thicket of information and organize some bits in the form of narratives, even if that means we end up with fewer bits overall.

In this vision of how we create mental value, the economic problem is again what to toss away—and how to order what is left—and not just what to acquire. An “economics of stories” gives the notion of mental ordering a central importance.

Of course the richer we become, the more likely our predicament is one of finding the proper ordering rather than just acquiring more. We have access to lots more “stuff” than ever before, if only through the internet, but our available time does not rise in proportion. So again we organize goods, services, and events into favored stories and jettison that which does not fit.

Story-based forms of mental ordering are a bit different from observed tendencies for many autistics. There is some evidence that autistics are less likely than non-autistics to think in terms of stories and also less likely to have highly vivid story-based dreams. This is hardly a settled area in science but autistics seem to impose different kinds of mental order on information and those orders seem to have a more specialized, more intense, and less narrative focus. It is common for autistics to strongly prefer reading nonfiction to reading fiction. There is also evidence that autistics have a weaker sense of episodic memory, even when their memory skills are strong overall. The memories of autistics are thus less likely to end up stored as emotionally misleading or biasing stories and more likely to be stored as a series of facts. Arguably autistics are less likely to be the ones thirsting for personal revenge, although I have not seen this particular claim studied formally.

In any case, for most people a successful story, like a successful celebrity, must be socially salient. A salient story, quite simply, is one that is memorable, emotionally resonant, and can be explained easily to most other people.

This point about salience returns us to Thomas Schelling and one of his other major contributions to social science. It was Schelling who developed the idea of “focal points.” A focal point refers to something we all can coordinate around without having to talk about it or plan it in advance. You might say if your boss invites you to present at a meeting of the company’s board of directors, it is focal that you wear a tie, even if no one tells you to. At Google headquarters casual dress usually is expected and thus they have a different focal point. Most generally a focal point is a commonly understood social expectation.

The concept of a focal point makes me recall the words of Jim Sinclair, an autistic who writes on the web. He informs us: “DON’T TAKE ANYTHING FOR GRANTED. Don’t assume you can interpret the [autistic] person’s behavior by comparing it with your own or other people’s behavior…Don’t assume the person can interpret your behavior.” In other words, many common focal points are harder for autistic people to use and alternatively autistic focal points can be harder for non-autistics to use.

Schelling’s original example of a focal point concerned a meeting in New York City. Let’s say you agreed to meet someone there but did not specify a time or place. Schelling believed that the “focal” choice was to meet at noon beneath the main clock in Grand Central Station; in other words the focal point should be as simple and as obvious as possible. I believe that Grand Central Station was the correct choice in the 1950s and 1960s, when Schelling was promoting this idea; today, when I poll my students, I hear Ground Zero or Times Square as a focal choice more commonly.

These examples are interesting but focal points matter less today than in earlier times. It’s not that the number of focal points is going down but rather that we need such focal points less. If you are supposed to meet someone in New York City, well, just send them a text message to specify where. The new focal point is not about a place but rather the expectation that you know how to read and send text messages. You can now get Google Earth on your iPhone or, if you have the right software, ask your location-tracking iPhone “Where is the nearest Starbucks from where I am standing?” The voice recognition software will do the rest and explicit knowledge substitutes for implicit knowledge. Or you can go to a new website that takes two initial locations—you enter them—and the site chooses a convenient meeting point in between. It’s www.meetways.com, and if it is not famous that shows that these days focal points simply aren’t such a big problem in the first place.

When it comes to picking up on commonly understood focal points, the performance of autistics is below average in many contexts, as they find it harder to pick up on many unstated social conventions. This is one of the most common complaints you will hear or read from autistic people and it stems from the fact autistics perceive the world in different ways. But it would be wrong to conclude that autistics are incapable of having focal points. We are in fact seeing social conventions or focal points evolving among autistics, most of all with the assistance of web communication. For instance there is now a fairly common understanding, or focal point, that a meeting or goodbye among autistics will not be preceded by a handshake. Many autistics do not enjoy this form of contact, and some hate it, so why do it? There is another convention that is seeing minimal adoption among autistics but perhaps it will blossom into a more common practice. Since some autistics (albeit a minority) have difficulty recognizing peoples’ faces, you should repeat your name when you say hi (“Hi, this is John”), even if you are saying hi to someone you already know.

A conversation on the phone between two autistics, or even a conversation in person, often seems slightly awkward because there is less of a common understanding of when one person is done speaking and when the other person should respond. The conversation can have an above-average number of fits, starts, and halts. On the other hand, we should not infer that autistics are in general worse at coordinating. Autistics often have a direct and even blunt style of speech and that is in my view refreshing. A preferred strategy for communicating or coordinating is simply to say what you mean, and that can do a great deal of good for communication and coordination. You also could say it is a focal point, among many self-aware autistics, not to be so offended by any perceived directness from the other person. So it’s wrong to think that all the communication and coordination problems lie on the autistic side of the ledger.

The obvious question is to what extent story-based reasoning is a cognitive ability and to what extent it is also a bit of a cognitive disability. We all take the value of good stories for granted. We love to tell stories to our friends and storyteller J. K. Rowling has become a billionaire for her Harry Potter tales. At the level of research, economists insist to each other that they tell good stories in constructing their theories and offering their explanations; we commonly use the term “analytical narratives.” I too love a good story, whether as a consumer of culture or professionally when I act as a consumer of economic research. But still, I’d like to raise a voice of protest. Should stories play such a dominant role in our cognition? Don’t we sometimes think in terms of stories too much?

Let’s look at how story-based thinking can go wrong and lead our lives astray, especially when the relevant stories have a highly social component. Story-based thinking, while fun, has its problematic side. I see the following problems with socially salient stories:

PROBLEM #1: THE STORIES ARE TOO SIMPLE

We’ve already seen that memorable stories tend to be socially salient and thus they tend to be focal. But, going back to Thomas Schelling, what do we know about focal points and the problem of how and where to meet up in New York City? We know that chosen focal points tend to be simple and obvious. That means that some of your stories will be simple and obvious as well. Some might say too simple and too obvious.

Whenever a group has to coordinate around a common idea or plan, there is the potential for what is called a least-common-denominator effect. Have you ever tried to get a group of six or eight people to agree on a common movie to go see or rent? It’s hard. A lot of the best movies already have been seen by someone in the group. Or many excellent movies are in some way bizarre, offensive, or appeal to very specialized tastes. Not everyone loves the Godfather series (remember that horse in the bed?) and there are many reasons, whether justified or not, to object to it. Maybe one person in the group doesn’t like reading subtitles on the screen. And so on. You probably won’t end up with excellence; rather you’ll end up with a movie that no one saw fit to veto. You’ll end up with something not too offensive but probably not excellent by anyone’s standard. Hollywood blockbusters have this same problem when they try to appeal to very broad audiences. They end up drained of vitality and risk-taking in an effort to appeal to the least common denominator in a large group of people, in this case spread across a truly global film audience.

We’re less likely to see that the same logic applies not just to the Hollywood studios but also to ourselves. In this way I am pretty typical. Some of the inputs behind my deepest personal narratives suffer from the least-common-denominator effect. The logic applies to my dreams. To my fantasies. To my deepest visions of what I can be. I treasure those thoughts and feelings so much but in reality I pull a lot of them from a social context and I pull them from points that are socially salient. That means I pull them from celebrities, from ads, from popular culture, and most generally from ideas that are easy to communicate and disseminate to large numbers of people. We all dream in pop culture language to some degree.

Media coverage brings similar problems of oversimplification. The tendency is to fit all facts into the format of a story, usually with a memorable protagonist, even when the reality is more complex. Haven’t you noticed how many movies and TV shows offer an underdog struggling against the system and receiving ultimate vindication? It makes for a good tale. Yet this isn’t always the most appropriate or the most accurate way of organizing information. The media is good at portraying heroes and villains and conspiracies, while it is bad at giving people an understanding of abstract or unseen social and economic forces.

As long as we are on the topic, media coverage of autistics offers many examples of how stories—even stories intended as positive—fall into the trap of presenting easily remembered, story-based stereotypes rather than the more complex truth. A typical example is a 2008 CNN.com story about an autistic child who was very upset because the family home had burnt down from a raging fire in California. The lead idea in the story is how autistics are totally dependent on their daily routines. Just so it doesn’t sound arbitrary, there is the obligatory single-sentence quotation from a scientist to justify the claim. Well, routines in autism are a complex topic but I think even the uninformed reader wonders whether such distraught feelings (the child lost all his possessions and toys and room) might be “normal” rather than “autistic.” But asking that question would destroy the premise of the story, namely the notion that autistic children cannot adjust. The bombshell comes at the end of the account, when the author reveals in passing, and in unawareness of any contradiction, “‘He’s [the autistic boy is] doing a lot better than his mom or dad, believe it or not,’ Jonathan’s mother said. ‘Time will tell. He’s never seen anything like this.’” The reality is that the autistic boy was better at adjusting than his non-autistic parents, but emphasizing that part of the history would not produce the stereotypical, easily remembered story and so it is neglected.

CNN is of course a popular outlet and thus the story is presented in a way that many people can relate to or remember, and that means some oversimplification. In other words, the shallowness of many commonly told and commonly held stories is part of the price of our sociability and the need to share so much with so many other people. Sometimes that oversimplification is a price worth paying. But let’s recognize it for what it is, namely a cognitive bias that plagues how many people think about the world.

PROBLEM #2: STORIES END UP SERVING DUAL AND CONFLICTING FUNCTIONS

Part of what a focal point means is that you can’t fit too many stories, ideas, and data points into your head at once. Only some of them will stick out and be obvious or memorable. So if you think of “meeting places in New York City” a few well-known points come to mind. If your mind was flooded with all the unordered details at once, it would be harder and maybe impossible to come up with a focal locale for meeting the other person.

Just as there can only be so many focal points, so can your mind only fit or handle so many stories. Your self-narratives for what you are doing cannot be so numerous as to fill out a thirty-seven-volume encyclopedia. Instead you fill your mind with a relatively small number of stories, such as “devoted mother,” “caring friend,” “adventurous hiker,” and so on. By the time we get to your thirtieth or even twentieth self-narrative, usually it’s pretty secondary and not a major driver of your behavior.

That’s fine, but the small number of focal stories does lead to some problems, namely that you don’t have enough stories, or enough flexible stories, for everything you want to accomplish in life.

Let’s consider a simple example. We all use stories to motivate ourselves but that means those same stories will cause us to make some mistakes. In some situations we will stay overmotivated when we ought to quit. Do you remember the wounded knight in Monty Python’s Holy Grail movie who is seriously injured but is in total denial about the damage? As he loses all his limbs he yells out, “It’s just a flesh wound!” and keeps on fighting, or rather he keeps on trying to fight. That flesh wound line is a pretty good self-narrative for keeping up his bravery and motivation. It’s not such a good story for keeping him out of danger or for getting him to visit the doctor when needed.

You might think: “Oh, the knight just needs two stories. He can start with the bravery story and switch into the ‘I am vulnerable’ story when he needs to or when he starts losing the battle.” But that’s precisely what’s not so easy. Stories need to be focal and they need to be strongly imprinted on our minds. That means we can’t just jump from one story to another at will. Bravery is an overall temperament that cannot be turned on and off like a switch. Our personal stories therefore involve some “stickiness,” if I may borrow some terminology from macroeconomics. The world, or our immediate environment, changes more quickly than our stories can adjust. In the meantime we can be very vulnerable indeed.

It sounds like a simple problem, but the indivisibility and stickiness of our emotional states—and thus our stories—is a root cause of so many of our life problems and a root cause of so many institutional failures. For instance, consider the collapse of the real estate bubble, as it started in 2007. Some of those mortgage lenders were fraudulent, but a lot of them just didn’t see that the story of perpetually rising home prices had to come to an end and that it would come to an end as soon as it did.

The stickiness of our stories is also why, on the macroeconomic level, economies experience nasty business cycles. Much of modern macroeconomics is built around the idea that some wages and prices do not adjust downward easily. If you are fired because business is slow, you might wonder, “Why didn’t they offer to keep me on for a 20 or maybe 30 percent pay cut?” Sometimes this happens but the reality is that most workers develop poor morale, or foment rebellion, when their wages are cut. You start life with the story “I will fight unfairness against me and efforts to take things away from me.” That story works well in a lot of settings (including the playpen), but in the world of business it sometimes means you end up getting fired. You ought to be switching into the story “I need to take one on the chin to regroup and move on” but the reality is that most people do not make this adjustment smoothly. Even if you can make that adjustment, your employer doesn’t know that about you and so you get fired instead of the pay cut. That’s a big reason why the downward swing of the business cycle usually involves so much unemployment.

Thomas Schelling, in his “The Mind as a Consuming Organ,” understood the very human limitations behind our stories and our limited mental and emotional capacities: “Marvelous it is that the mind does all these things. Awkward it is that it seems to be the same mind from which we expect both the richest sensations and the most austere analyses.”

PROBLEM #3: MARKETS DON’T ALWAYS SEND US THE RIGHT STORIES OR REINFORCE THE RIGHT STORIES

Insofar as you open yourself, and your stories, to social influence you run the risk of external manipulation. Our choice of stories is never autonomous and the choice is never ours alone. We’ve already looked at how we pull our stories from others and how we choose our stories so they resonate with other people as well. That’s one issue, but the more sinister reality is that other people are trying to manipulate you with stories all the time. These villains include your employer, politicians, advertisers, and who knows, maybe even some authors as well. Isn’t fiction deliberately a kind of manipulation, preying on our imperfections and designed so we care about and sympathize with characters that aren’t even real?

On one hand you are trying to empty your head and your feelings of a lot of extraneous clutter. You do this, in part, to keep your personal stories focal and memorable. Sadly, all these external persuaders are trying to fill your head at the same time you are trying to empty it. It’s a kind of social arms race—one side against the other—and unfortunately we as individual story-builders are not always the ones who win out.

Look at capitalist advertising, where the manipulative persuasion is easiest to spot. With the goal of profit in mind, advertisers try to promote the following kinds of goods and services:

goods we will become addicted to

goods that are hard for competitors to copy or reproduce

goods that the supplier can produce more of at low or declining cost

Those are the goods that are most profitable to market and sell. The direct corollary is that we will be bombarded with stories about the importance of these goods. Coke: the real thing. Finger-lickin’ good (Kentucky Fried Chicken). Please don’t squeeze the Charmin. And so on. In other words, you get stories that are bundled with these goods. It’s the stories that help you get addicted to these goods and to their associated images.

As I’ve noted, addiction isn’t always a bad thing, especially if you’re having fun and the habit isn’t destructive. If you’ve grown attached to eating healthy Rainier cherries (as I have, and in case you don’t know, those are the yellow ones), that’s fine, albeit a bit expensive. But still, the addictive goods promoted by advertisers are not exactly the best choices for you either. The world is sending you stories with a skewed perspective. Because of the influence of ads and popular culture, there is a risk that our personal narratives can become too aspirational, too commercial, and too linked to specific brands. We are also too susceptible to government propaganda.

Autistic people have some cognitive strengths to help them deal with those problems. The love of information found among autistic people meets only the first criterion on the above list, namely it may be addictive. Many ways in which autistics engage with information just don’t yield that much profit to suppliers, precisely because the relevant processes of mental ordering are such cheap pleasures. Most instances of autistic mental ordering don’t need to be linked to scarce and possibly expensive social status goods. The ordering is very often an extreme form of what economists call “household production” and so these pleasures cannot easily be controlled, manipulated, or owned by outside forces. That gives many autistics one kind of freedom from the pressures of commercial society.

Autistics may not seem like such a powerful group, but their techniques of information engagement embody a threat to capitalist marketing as we know it, and I mean that in the best sense. Why buy an expensive brand repeatedly when you can make your own economy in your head? As the evolution of the web illustrates, other people are catching up to this insight and producing more value by their own mental ordering and enjoying that value in their minds, without the intermediation of many expensive commodities. When it comes to protecting yourself against external manipulation by advertisers, a preoccupation with mental ordering is often an underappreciated advantage.

The Portuguese author Fernando Pessoa hit on a fundamental reality: “Wise is the man who monotonizes his existence, for then each minor incident seems a marvel. A hunter of lions feels no adventure after the third lion. For my monotonous cook, a fist-fight on the street always has something of a modest apocalypse…The man who has journeyed all over the world can’t find any novelty in five thousand miles, for he finds only new things—yet another novelty, the old routine of the forever new—while his abstract concept of novelty got lost at sea after the second new thing he saw.” Pessoa calls this “monotonizing existence, so that it won’t be monotonous. Making daily life anodyne, so that the littlest thing will amuse.” Pessoa may be overstating the point, but this is one strategy that stands outside of most capitalist marketing.

The competitive pressures from free fun on the web affect the marketing prospects for virtually all goods and services, again because there is competition. If you’re trying to addict me to drinking expensive bottles of red wine, such a habit now has some especially cheap competition, again as can be found on the web. And no, it’s not just the web that is changing the terms of the competition in favor of cheap pleasures. TiVo makes it easy to obsess over basketball and cable TV means that your favorite TV show can be suited to your particular interests in a very intense way.

But aren’t stories really just fantasy and isn’t just “living in your head,” when you get right down to it, simply bad? There is a fundamental criticism that must be addressed.

The criticism comes from Robert Nozick, the former Harvard philosopher, who provided what is considered the strongest and most potent critique of stories and fantasy. Nozick was an especially imaginative man and like so many other philosophers he wanted to convince us that there is something special about authenticity. (Recall Heidegger, or for that matter Sartre’s Nausea: “But you have to choose: to live or to recount.”) Toward that end, he poses what has now become a famous philosophical challenge, namely that of the experience machine, which he outlined in his 1974 book Anarchy, State, and Utopia.

The experience machine, as Nozick called it, offers the promise of experiencing whatever we want to. We could live our lives as heroes, have a hundred beautiful boyfriends or girlfriends, cure all of the world’s diseases, or be the world’s richest or most athletic man. It’s a bit like the movie Total Recall except there is no malfunction and no evil corporation lurking in the background. It’s just us and the pure fulfillment of all of our dearest dreams. You just have to plug into the machine, and of course the catch is that none of these experienced events are real. Once you are plugged in you think they are real (but only if you want to); in reality you are in a stinky room, lying on a dirty cot and hooked up to an ugly machine. Maybe there’s a worm crawling up your leg or maybe you’re in a clean, white hospital bed. You’ll never know.

Nozick claims that most of us will reject such a fate, even though it provides us with some extraordinary mental experiences. For Nozick the rejection of the experience machine establishes a few philosophical points. First, we want to be certain kinds of persons, not just receptacles of happiness. Second, we value the truth or the authenticity of an experience. Third, hedonism cannot be the only or primary value because if it was we would all plug into the machine. Fourth, the meaning of humanity can’t just be all about “living in our heads.”

But I’m not quite convinced by Nozick’s critique, even though I largely agree with the four points listed immediately above. Perhaps my skepticism stems from my background as an economist and my profession’s emphasis on “choice at the margin,” to cite that theme again. The choice is not “Fantasy: yes or no?” but rather “How much fantasy do we want in our lives?”

I’ve decided to plug into an experience machine, or at least not to unplug, and that machine is the human mind. It’s pretty well established that our minds shape and frame truth as much as track it and few people would want, upon reflection, to live a life unadorned by the power of framing effects. We use framing effects all the time to make our experiences more vivid and more intense. Nor would most people, upon reflection, want a life without self-deception. If we were truly aware, all the time, of all the world’s suffering, and more importantly aware fully of our own mediocrities (not to mention our inevitable death), many of us wouldn’t be so happy. And as I’ve argued in my previous book, Discover Your Inner Economist, beneficial self-deception is common in human life, especially in marriage and career ambition. A lot of human achievement takes place only because we tell ourselves—often contrary to reason—that we are in fact smarter or wiser or better than other people.

In other words, we are all—now—allowing deliberately false movies to play through our heads and in part we let this happen so that we are happier and more successful. So for me the question is not whether to plug into or not plug into a machine, but rather how much to plug in and to what kind of machine. No one is choosing to opt for pure authenticity—whatever you might think that means—so let’s not set up pure fantasy on the other side of the equation. It’s all about choosing the right margin (again, that term from economics) of reality and fantasy, or to put it another way, I don’t think the so-called real world is very “authentic” at all. No one who refuses to plug into the machine is in fact choosing or defending pure authenticity.

If it did turn out that autistics have purer or less intermediated sensory perceptions, as is suggested under some hypotheses, would everyone then prefer to be autistic? Probably not. Coming at the question from the other side, many autistic people do not wish for or seek a cure; people very often like to keep what they were born with and also what they have shaped themselves into.

That said, I can think of plenty of settings where I would opt for the experience machine, even if I would not take the machine today. Nozick wrote up the experience machine example when he was in his forties, brilliant, dashingly handsome, in the prime of his life, and tenured at Harvard with a very high salary. No wonder he didn’t want to plug in. But if I had only a year left of life—let’s make that two years—I’d run for the machine pretty quickly, at least if my family had already passed on. Or if I lived in the Congo, where millions have died from civil war…well…I don’t know what that kind of life is really like but I’d give the machine serious consideration.

Or say you personally don’t want the machine, but your acceptance will save five other people’s lives. Would you proceed without guilt or reluctance? And how many lives should be needed to push you over the edge? I would think that one other life to be saved would be more than enough to accept the machine hookup. I don’t think I would feel very remorseful about choosing the machine, once society made me a hero and removed the social and personal stigma of my having “voted against authenticity.” I might look forward to what is to follow and if I had any worry it would simply be whether the machine was truly and properly designed for me.

So is the experience machine example compelling as a refutation of stories, fantasy, and living in your head? Is the machine truly a reaffirmation of “the real”? I don’t think so, and again that’s because “living in your head” is all about choice at the margin. (If you are wondering, Nozick and Schelling were at Harvard at the same time and they were admirers of each other’s work; there may have been mutual influence.)

I’ll do a flip on Nozick’s original intentions. The question of the experience machine, properly specified and construed, puts a self-constructed mental economy squarely on the map as one value that matters and as one value that is undervalued in many circumstances. To be honest, many of my friends have not read Moby-Dick but I think many more of them should indulge in this fantasy of the quest for the white whale. That is, unless they have three small children running around the house.

Many of us are too reluctant to step (part-time) into literary fantasy machines rather than too ready. Isn’t our general tendency to clutch at the thought of reality just one more instance of the illusion that we are always in control? I say let’s put down our polemic against living in our heads and let’s put down our bias against interiority. Let’s give our stories their proper due but also recognize the limits of stories. The quality and vitality of our internal economies—and thus the quality and vitality of our society—depends on it.