What determines whether we have successful lives?

Your chances of success in life depend on your intelligence, your family background and your temperament, don’t they? Yes, to some extent. But over the last few days I have read about research findings which suggest that beyond a threshold IQ doesn’t make much difference, the important aspects of family background are only superficially related to wealth and the predictive importance of childhood temperament tends to diminish over time.

In “Outliers” Malcolm Gladwell tells the story of research conducted by Lewis Terman who identified 1,470 Californian children with very high IQs (over 130) in the 1920s. Terman believed initially that members of this group were destined to be among the future elite of the U.S. When they grew up, however, the majority had careers that could only be considered ordinary. It turns out that the relationship between IQ and success works only up to a point. Additional points of IQ beyond about 120 (remember the population average equals 100) don’t seem to have much impact on success.

Further analysis divided these genius subjects into three groups and looked for reasons for differences between the achievements of the most successful and least successful groups. The main difference seemed to be that the most successful performers came from the middle and upper class – the most successful group contained almost none of the children from the lowest socioeconomic class. Later in his book Gladwell points to evidence which suggests that the link to socioeconomic class has little to do with things that are directly associated with wealth or even with the quality of schooling. Research by Karl Alexander shows, for example, that the main difference between reading scores between elementary school children emerge during the summer vacation period while they are not at school. The wealthier parents tend to cultivate the interests of their children in reading etc. even during the summer vacation period. The difference seems to have more to do with culture than with income.

Gladwell’s main point is that it is impossible for superstars in any field to look down from their lofty perches and say with truthfulness, “I did this all by myself”. Gladwell argues: “They are the products of history and community, of opportunity and legacy. Their success is not exceptional or mysterious. … The outlier, in the end, is not an outlier at all” (p 285).

Something else I have read recently that relates to the determinants of successful lives is Joshua Wolf Shenk’s article “What Makes Us Happy” (The Atlantic Online, June 2009). Shenk’s article discusses George Vaillant’s research, based on the Harvard Study of Adult Development. This study of healthy, well-adjusted Harvard students began in 1937 and followed its subjects for more than 70 years. As with Terman’s study, the leading researcher originally involved in the Harvard study thought he would be studying a group of people who would have successful lives. Many did in fact achieve dramatic success, but by age 50 almost a third of the subjects had at one time or another met Vaillant’s criteria for mental illness.

One of Vaillant’s findings is that the predictive importance of childhood temperament diminishes over time: shy, anxious kids tend to do poorly in young adulthood, but by age 70 they are just as likely as the outgoing kids to be happy and well. One of the factors that he found to predict healthy aging is “employing mature adaptations” to life’s troubles. Mature adaptations include altruism, humour, anticipation (planning for future discomfort) and delaying attention to an impulse or conflict. The second most important factor that he found to predict healthy aging was the quality of relationships, including with siblings, friends and mentors.

Will Wilkinson comments on his blog: “What I liked so much about this essay, and about Vaillant, is the recognition that the complexity of human psychology, the complexity of coping and adapting to the challenges life throws up, makes relationships or “social aptitude” no simple thing.” I agree.

This brings me back to Gladwell’s book. One of the things from “Outliers” that will stick in my mind is Gladwell’s account of the Roseto mystery. In brief, in the 1950s the inhabitants of Roseto (Pennsylvania), whose ancestors came from a town of the same name in Italy, had a very low incidence of heart disease and their death rate from all causes was 30 to 35 percent lower than expected. Researchers ruled out all the obvious causes such as diet, exercise, genes and location. Their explanation was that Rosetans had created a powerful, protective social structure capable of insulating them from the pressures of the modern world. In Gladwell’s words, it was about “the mysterious and magical benefits of people stopping to talk to one another on the street and of having three generations under one roof” (p 10).

This is very interesting and very complex. I find myself reacting in three different ways. First, in statistical terms “outliers” are chance events; before getting too excited about sociological implications we should establish whether there is evidence that other communities which share similar characteristics to Roseto in the 1950s have similar health outcomes. Second, leaving aside the “mysterious and magical” factors, the most useful place to look for an explanation would be in the links between happiness (emotional health) and physical health. Third, perhaps it is time I had a closer look at the research findings behind those headlines a few months ago which claimed that scientists now have evidence that happiness is contagious.

18 May 2009 is the reverse of 17 May 2004

Nifty

Click on the above picture to see it more clearly. If you haven’t been watching the action: The application of existing circuit breaker rules meant that the market opened, went limit up, opened again, went limit up, and closed for the day.

What can be traded

The action on the currency, and look at Nifty futures trading at SGX (!).

Westpac Breakfast

Went to the post Budget Westpac breakfast talk by their Chief Economist yesterday. Short summary: worst environment in 70 years; recovery will be patchy and slow (maybe 3 years); but much more is being done this time compared to 1930s; we will get out of it and then business as usual; Australia better placed than US/UK re debt as % of GDP but current account deficit one of the worst in the world; Western Australia will hold up, but it will feel bad because growth will drop from 5% to 1% whereas the other states have already had to deal with and get used to decline; thought the first home owner’s grant will be our subprime as it is sucking in people who should probably not be given loans.

Interesting to hear this and feel the mood of the business guys there (I think 4 women in all). A big contrast to the views of the blogs I follow. There is still a bit of hope/expectation that this is a bit of a recession and just tough it out for a few years.

I feel we are at a pivot point, with Governments doing all they (think) they can to keep people believing it will just be a bump and people don’t want to hear really bad news so they want to believe it but still will be scaling back spending, you know, just to be safe.

Martin Armstrong recently told the story of a Japanese investor who bought into the market just at the peak. He asked why he did it and the answer was that the investor’s broker had been telling him to get in for 6 years and finally he thought he should. Martin then says it is when the last person has piled in that a bubble busts. I think it is the same on the way down – not until the last person has lost hope will the bottom be found. The green shoots are telling us we aren’t there yet. There are still greedy people out there wanting to make up their losses, or optimists that think we are at the bottom.

The question is whether Governments can pull the confidence trick off and keep the green shoots alive. If you don’t think this is at all possible, I would suggesting reading this post of mine from last year. I don’t think it is possible, but I also never underestimate the gullibility of the average person and their unwillingness to face unpleasant realities.