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How one Seinfeld insight can improve our resolutions and ability to fight climate change and racism

Why do we discount the future? Comedian Jerry Seinfeld has a great bit where he highlights our human tendency toward what behavioral economists called "present bias": our preference for short-term gratification.

Here on The Tonight Show With Jay Leno, Seinfeld explains how this present bias works: "Night Guy" can mess with "Morning Guy" by staying up too late. "That's Morning Guy's problem. That's not my problem." It's a terrific (and humorous) insight into human behavior:

Night Guy, Morning Guy and the Markets

We see this tendency everywhere. In business, there is an urban myth circling that this present bias has forced the the average holding time for stock today down to 11 seconds. We have pumped computers full of algorithms and they do the heavy lifting, so this seems to make sense. While it's true that the average stock holding time is eroding across the globe, it's not 11 seconds. What used to be 7 or 8 years holding time for stocks has turned into 7 or 8 months (see graphic/source below)

We would do well to remember the lessons from Arie de Gues' The Living Company in which we studies companies that have been around for 500 to 1,000 years.

"Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations' true nature is that of a community of humans."

Combatting Short-termism and Valuing the Future

Seinfeld's poignant observation actually proves to have a psychological basis. Our mind really does play tricks on us. In this case of present bias, the science suggests we literally feel as though our future self is another person. And this person--and all those other future people--will deal with whatever can we are kicking down the street: from macro issues likes budget deficits to climate change to credit card debt to the personal like saving money and preventative health.

So what do we do about this tendency? How do we get back at Night Guy?

The Future is Closer Than You Think

To have a company that exists for 1,000 years or a family legacy that persists after you pass, short-termism and the present bias must be defeated. Around this time of year, people set resolutions or goals for the New Year. But it struck me the other day that a year is too short.

Much like quarterly earnings reports can be limiting to judge business performance, a year is too short to judge life performance. When Paul Polman became CEO of Unilever he famously told Wall Street that quarterly earnings reports were a thing of the past. He wanted his company to think for the long-term and quarterly calls were creating a myopic culture. Similarly, I suggest that a year is too short for our resolutions. We should think over our entire life performance which, it turns out, is much longer than we think.

I think of Mary Jean and Frank Smeal, born in the early part of the 1900s who blessed thousands of students when they endowed the Penn State College of Business in 1990. Their legacy will literally touch millions of lives for countless years to come. The Smeal College of Business is now evidence and testimony to their lives.

Charting Your Long and Important Life and Legacy

Just how long is a human life? In the U.S., it depends of course on race, gender, and socioeconomic status but we can say roughly 70 years. That is a measure of our individual life. But what about the lives we influence, the lives we come to know and care for? I believe if we make ourselves more conscious of how long our life truly is, it can interrupt our usual laissez faire attitude about the future--shocking into the reality of our long and important life and legacy.

Now its your turn. Create a chart similar to the one above. Let yourself be creative in how you present the information. Make some basic assumptions for years you and your children/grandchildren will live. What will the year be when the last person whose life you influenced pass away? For me, the answer was 2130. This hit me like bolt of lightning. All of a sudden the future wasn't someone else's problem, it was my family's--it was mine.

Not everyone has children, chooses to have children or is able to do so. But for this exercise, you can think of your children and grandchildren or just imagine that you have (or will have) some of both. Get out a fresh piece of paper and create your own estimation of how your life performance can stretch. Then I recommend:

  • Become familiar with the numbers, like 2130 or whatever it is for you. Part of the problem is that these future numbers seem unreal and it is not because they are, but it is just because they are unfamiliar to us. As I have walked around with 2060 and 2130 in my head over the last few days, they become real, they achieve a certain weight in my consciousness. Suddenly, projections of, for example, further damage from climate change by 2050 and 2100 are personal, proximate and relevant. They are family matters. The fact that 2111 is the year when African-Americans will be legally free for as long as they were legally slaves (246 years) becomes a milestone my family will be a part of.

  • Reverse the process and go back in time. From your birth, back the number of years of your full life. I started at 1974, the year I was born, and went back 156 years. This time travel slung me back over the years to the 1820s. The country had been in existence for about 50 years, James Madison was president. How did my ancestors act in the interest of the country, the community? My family? My black and brown fellow citizens, brother and sisters? Suddenly, the past isn't so far away--it's a part of the family.

  • Put the years on a piece of paper and put it up somewhere. For me...1820---1974---2130. Start to see how this changes how you think about your days and weeks, the headlines you read, the past you want to correct and the future you want to protect. See how it changes your thinking.

  • Set resolutions but make sure they support what your great grandkids say about you, what other people's great grandkids say about you--about us--in 2100 and beyond

Seinfeld identified a human tendency to discount the future. We stay up late and brush it off as someone else's problem in the same we regard the 2050s and 2100s as someone else's time. Meanwhile, technology with a twist of greed fueled by competition has made today's stock market a myopic symbol of rabid short-termism. It's easy to blame hedge fund managers and we should, but many of us demonstrate this tendency to get ours now and let the future take care of itself.

The future comes and its us having to take care of it. It's our families, our communities, and our world that has to take care of it. The simple truth is this: the future is just as real as the present. It doesn't feel that way and that's the crux of the problem. Our psychological wiring tricks us into discounting the future. But we can push back. I believe by charting our full and important life, by numbering the years, imagining the lives, we can become more conscious of just how real the future is.