Why we should all fear failure

Martha Gill's Irrational Animals column.

At one point in Ben Ainslie’s first heat he dropped to 11th place. As other boats sped past him, the on-board camera showed him looking more and more put out. But then the sailors changed direction, moving against the wind, and Ainslie began to recover ground. He worked his way up the stretch through sheer strength, moving from tenth to ninth to eighth (although his expression didn’t vary), and finishing the heat in second place.

After winning a gold medal overall (his fourth in four Olympics), he wrote in the Telegraph: “The pressure on me in the build-up was intense. For months – years – I kept getting told I was going to win. No matter how many times I said it wasn’t a foregone conclusion, people kept building me up. That begins to have an effect on you no matter how focused you try to remain.”

As a defending champion, you're in the unpleasant position of trying not to lose, rather than simply trying to win. Yet the effect might not be a bad one. Economists talk about the principle of “loss aversion” – the theory that we care much more about losing than making an equivalent gain. The indignity of being in 11th place at the first mark prompted Ainslie to find a sudden source of strength, and it seems the pressure to defend a title generally might give sports champions an extra motivational nudge.

The economists Devin Pope and Maurice Schweitzer studied this in golf – a sport that will incidentally make a return to the Olympics in 2016. In golf, it is fairly easy to see how you’re doing at each stage of the game, as the number of strokes needed to make a par is fixed for each hole. When a player approaches a hole, he might either be putting to avoid a stroke over par (a bogey) or putting to gain a stroke under par (a birdie).

The researchers looked at 2.5 million near-identical putts by 421 professional golfers (no mean feat) and found that players performed better when trying to avoid a bogey, or a loss, even though the motion of the club was exactly the same.  They calculated that if Tiger Woods had performed equally well for birdies as he did bogeys, he would have improved his earnings by $1m per season. Players fight harder, they concluded, to avoid losses than they do to make gains.

Odd thinking

This strange, asymmetrical thinking is evident in other areas, too, but it isn’t always a good thing. A 2003 study by Ernst Fehr and Lorenz Goette showed how bicycle messengers make silly economic choices just to avoid the feeling of missing their daily target. On days when they are paid more commission per hour, they reach their target earnings quickly and knock off early. On days when pay is low they stay out much later. This isn’t logical. They should stay out longer on days when business is good, and take time off on the slow days. They can’t help themselves, though – they are programmed to focus on losses.

One final example: as Chris Adams of the Financial Times has noticed, Twitter’s attention to the markets seems to rise in inverse proportion to the markets themselves. Bad news is always more interesting than good.

Ben Ainslie. Photograph, Getty Images

Martha Gill writes the weekly Irrational Animals column. You can follow her on Twitter here: @Martha_Gill.

This article first appeared in the 13 August 2012 issue of the New Statesman, The New Patriotism

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.