View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Business
  2. Economics
22 October 2018updated 07 Jun 2021 1:47pm

Why optimism is a class issue

By Chris Dillow

One thing that attracts people to Boris Johnson is his cheerfulness about Britain’s prospects. Telegraph columnist Liam Halligan and Conservative MP Owen Paterson both praise his “sunny optimism”, while Johnson’s former flatmate Matthew Leeming writes — I kid ye not — that “we need a cheerleader to remind us we are an erect and manly people.” But I wonder: is there a class aspect here?

I ask because of a recent paper by Erin McGuire of the National Bureau of Economic Research. She shows that: “Individuals who begin their lives by observing an economic downturn remain pessimistic and risk averse with respect to investments over the course of their lifetimes.”

This corroborates work by Ulrike Malmendier and Stefan Nagel and by Miguel Ampudia and Michael Ehrmann. And it’s consistent with research by Henrik Cronqvist, of the University of Miami, and colleagues. They show that people who grew up in poorer homes, or who entered the labour market during a recession, tend to avoid growth stocks even years later.

Much the same might also be true for attitudes to unemployment. Memories of the Great Depression suppressed wage militancy in the 1950s, just as memories of the 2008 financial crisis might have caused millennials to be timid today. Wolfgang Maennig and Markus Wilhelm have shown that spells of unemployment depress well-being even after people return to work, perhaps by inducing the fear that it could happen again.

All this suggests that hard times in our formative years make us pessimistic long after those times have passed. Which is where class comes in. Being posh insulates you somewhat from hard times, thus making you more optimistic than the rest of us. Johnson and I are both of an age to have spent our formative years during a time of soaring unemployment. But whereas I saw it close up, Mr J. did so from a safer distance. It is perhaps therefore no accident that he has a “sunny optimism” and I, well, don’t.

The mechanism here was described by David Hume. Our lived experience creates impressions which enter our minds “with most force and violence”, whereas reports are only “faint impressions” of these. Those who have experienced poverty or unemployment, or seen them close up, have therefore a greater fear of it than those who only saw them from a distance, if that.

What I’m describing here is a little different from the tendency for posh people to be more confident than the rest of us, but perhaps connected. My point is that posh folk are more optimistic than others, not just about their personal prospects, but about prospects for the economy generally. Of course, you can think of counter-examples to this — of posh but melancholic people (singer-songwriter Townes Van Zandt?) — but I suspect there is a tendency here. This fits with the fact that leading Brexiteers such as Jacob Rees-Mogg and Nigel Farage, as well as Johnson, come disproportionately from comfortable backgrounds.

Of course optimism is sometimes justified. But this isn’t my point. My point is merely that our attitudes and preferences are not  “given” as simplistic neoclassical economics often pretends. They are instead endogenous, shaped by, among other things, culture, gender, history, press pressure and — yes — class. 

Content from our partners
Labour's health reforms can put patients first
Data science can help developers design future-proof infrastructure
How to tackle the UK's plastic pollution problem – with Coca-Cola

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.