To Carpe Diem or Not To Carpe Diem

Robin knew how to Carpe the Diem.

After graduating from college, I went backpacking through Europe for a couple months with some friends. It was, without question, one of the best experiences of my life. For someone who had never really been outside of the US, it was eye-opening. Well, if I’m being honest, it was basically a roaming party that saw as many bars and clubs as it did museums and churches, but it was eye-opening all the same.

Like most recent grads, my bank account was running on fumes, but the thought of postponing or passing up the opportunity never even crossed my mind. With multiple credit cards in hand, not only did I go, but I spared very few expenses. I mean, if I was going to go, I was going to go big, affordability be damned. All in — flights, rooms, food, drinks, trains, tickets to various attractions, etc. — I think the trip cost around $6,000.

When you are broke, it’s pretty audacious (if not downright irresponsible) to go $6,000 in the hole just so you can go globetrotting with some of your buddies. However, if you had asked my 20-something self about the prudence of spending multiple thousands of dollars I didn’t have in the name of a traveling party, I probably would’ve said something like “you only live once” (or YOLO, for all you kiddos reading). Further, at the time, the thought of not going would have triggered a deep and powerfully motivating FOMO (or Fear Of Missing Out, for all you Boomers reading). Unfortunately, as anyone who has volunteered for or been forced into similar a financial situation knows, that bill comes due in a hurry.

To make matters worse, thanks to the excessive interest rates charged on credit card balances, the trip actually cost more than $6,000. I don’t remember exactly how much but would guess I ended up paying at least an additional $1,000 in interest payments.

And the trip didn’t just cost money. It stole a portion of my 20s, too. When I returned, I had to move back in with my parents for an extended period of time. (I would’ve had to move back home regardless, but the financial hole I partied my way into assured a much longer stay.) Seeing as I had no money to pay for rent or food, the move back home bargain also meant that I had to complete a variety of projects around my parent’s house in order to earn my keep (this is not a complaint; frankly, I was and am grateful for the deal).

During that lost time, I often questioned the wisdom of my little European jaunt. The trip was awesome, but living back at home as a jobless adult, unable to buy myself lunch (without going even further into debt), was not an enviable position. To add insult to injury, the post-trip impoverishment lasted A LOT longer than a couple months. YOLO didn’t seem like such an unquestionably great idea anymore. I feared that I was now missing out on a big chunk of my young adulthood.

Of course, this is a common story. Many people know the cold, unforgiving feel of financial indebtedness handcuffs. As often as not, just like it was for me, those handcuffs are put on voluntarily. Our instincts tell us to enjoy now and worry about later, well, later. We want instant gratification. It’s literally why credit cards exist: They enable you to pay for things that you can’t currently afford. It’s the core appeal of the internet: At any time of day, you can find and/or buy just about anything your heart desires with just a few simple clicks. It’s why we demand next day shipping: Most of us are willing to pay extra to get our stuff by tomorrow…and even that feels too long!

As the band Queen so succinctly put it, “I want it all, and I want it now.” What I’ve always wanted to know is why.

Present Bias

“Wanting it now” is formally defined by Behavioral Science professionals as the Present Bias: The tendency to settle for a smaller present reward, instead of waiting for a larger future reward. The term was coined in 20th century but has been known since ancient times. Sometime in the 7th or 8th century BCE, the Greek poet Hesiod wrote, “Do not put your work off till to-morrow and the day after…a man who puts off work is always at hand-grips with ruin.”

To be a bit more specific, the Present Bias refers to occasions when the preference for taking a reward in the present is time inconsistent. In other words, you have a Present Bias if your future self will likely regret your present decision (e.g. burdensome credit card interest rate payments). To be time consistent means that your future self would be indifferent to the choice of reward now versus reward later. Further, the Present Bias can be mathematically identified using the Hyperbolic Discounting model, which illustrates how valuations fall relatively rapidly for earlier delay periods (e.g. from now to one week), but then fall more slowly for longer delay periods (e.g. more than a week).

If you’ve read my other posts, you have become familiar with Daniel Kahneman’s System 1 / System 2 model of human cognition and decision making. To briefly recap, System 1 is our autopilot and what we use to operate in the world most of the time. System 2 kicks in when thinking becomes harder. System 2 is what we use when we are dealing with uncertainty, when we actually have to stop and think about it. The Present Bias is a product of System 2 thinking.

As I have organized the world of behavioral biases, there are three primary categories of thought that engage System 2 and make thinking harder:

• Mental Accounting (e.g. calculating and understanding probabilities)
• Learning & Changing (e.g. learning a new language or changing/eliminating a bad habit)
• Time Related (e.g. selecting between present and future rewards/consequences)

Like System 1, System 2 leverages a collection of biases in order to come to decisions as efficiently as possible, while simultaneously trying to simplify a complex and uncertain world. Here are some of the key biases human beings consistently demonstrate in dealing with time-related situations:

• Hindsight Bias — the “I knew it all along” bias
• Hedonic Adaption — expectations of happiness rise/fall to meet your current reality
• Duration Neglect — memory of unpleasant experiences have little do with their duration
• Impact Bias — people tend to overestimate the length & intensity of future emotions
• Planning fallacy — tendency to underestimate the amount of time needed to complete a task
• Present Bias — choosing now over later

When we peel back the layers the make up the Present Bias, we find a few key patterns in our thinking:

• Short Termism — this is a general preference driven by Present Bias
• Myopic Procrastination — putting off hard things means greater enjoyment of the present
• Projection Bias — we project that we will always like whatever it is we like today

Great. We now have a solid map of the Present Bias territory, but we still aren’t sure exactly why we have a Present Bias to begin with.

It’s Uncertain and I Can Hardly Control Myself

Moments ago, I mentioned that our minds work to simplify our experience of the world, while also striving to be as energy-efficient as possible. Both of these ideas lean heavily on evolutionary theory and the law of least effort. Upon further review, and based on these underlying concepts, two primary drivers of Present Bias rise to the surface: Uncertainty & Self-Control.

Life is full of uncertainties. However, in today’s modern society, especially in the developed world, much of life’s uncertainty has been made certain. We know where our next meal is coming from, we know what kind of weather to expect tomorrow, and we are virtually guaranteed not to cross paths with any large predators that might want to make a meal of us. However, certainty about our daily lives is a relatively recent phenomenon, barely the blink of any eye in evolutionary terms. In fact, we have spent the vast majority of our existence in decidedly uncertain circumstances, and we evolved preferences, like the Present Bias, accordingly.

Back in the day…

• if we encountered an abundance of food, be it fruit bearing plants/trees or a recently killed large animal, better to eat as much as possible now, for when and where our next meal will come is uncertain
• if we were lucky enough to cross paths with a willing and compatible mate, better to take advantage and pass our genes on now before someone else beats us to it
• if we found ourselves in unfamiliar territory, better to advance with caution, if not retreat to familiar territory, that we may live another day

Developed over hundreds of thousands of years, our instincts are acutely sensitive to the future’s uncertainty and encourage us to get while the getting is good. Further, the daily uncertainties we have faced for all those millennia constantly challenged us to think hard about the decisions we made. That our species has been able to effectively eliminate much of life’s uncertainty is a testament to our ability to consciously control our base emotions and instincts.

That said, thinking harder takes a lot of energy and, thanks to the afore mentioned law of least effort, we are lazy. With the evolutionary cards stacked against us, there is only so much we can do to override our natural instincts, which brings us to the second primary driver of the Present Bias: Self-Control.

Learning to control ourselves, that we may behave in ways better aligned with our present circumstances, and not those of millennia gone by, is a never-ending and cognitively demanding war. Two dynamics in particular are worth examining in regards to understanding the self-control challenge of the Present Bias:

• Ego Depletion — Choosing to not accept the present reward and rather wait for a greater future reward takes willpower, and our willpower is quickly depleted (again, we are so very lazy). Interestingly, the ability to demonstrate willpower in the face of the Present Bias is an effective proxy for success in life, most famously demonstrated in the Stanford Marshmallow Experiment and it’s follow up reporting.
• Neurological Reward Centers — Brain areas that are associated with reward-processing are more strongly activated by the availability of immediate rewards (e.g. sex, food, etc.), even when the future rewards are larger. Therefore, individuals tend to make decisions in favor of immediate outcomes rather than future outcomes. We are hardwired to want it now.

There you have it. The nature of life’s uncertainty mixed with our limited ability to push back against the inherent biases that evolutionary pressures have blessed us with create the circumstances that have allowed the Present Bias to blossom and flourish.

Now let’s take a look at the various ways the Present Bias has permeated the popular conscious for generations…

Treat yo’self

In 23 BCE the Roman poet Horace gave us the all time classic Present Bias idiom:

• “Carpe Diem” (part of Horace’s injunction “carpe diem quam minimum credula postero” translated literally as “pluck the day, trusting as little as possible in the next one”)
• Carpe diem hits the “life is uncertain” nail square on the head

Soon after Horace gave the world his Present Bias gem, followers of the Christian New Testament were taught:

• “Therefore do not be anxious about tomorrow, for tomorrow will be anxious for itself. Sufficient for the day is its own trouble.” (NIV | Matthew 6:34)
• This early Christian teaching may be seen as a call out to the importance of self-control and focusing on what’s right in front of us.

The Renaissance in the 1600s gave us two Present Bias idioms that are still in use today:

• “There’s no time like the present” (G. Legh, 1562)
• “Strike while the iron is hot” (R. Edwards, 1566)

Today, our Present Bias is perhaps best expressed in the way all the best things are expressed anymore, in meme form:

• “Treat yo’self” (Parks & Rec’s Tom & Donna declare October 13 to be a day for you)
• After all, today is a gift to be enjoyed, that’s why they call it the present, right?!

Bottom Line

While these and many other idioms & sayings promote the value and importance of the Present Bias, which we can now appreciate for its evolutionary underpinnings, conversely, humanity has also been keenly aware of the dangers of being short-term focused, and equally stark warnings have been handed down over the generations.

Going all the way back to ancient Sumer, where human society first blossomed, two sayings in particular capture our awareness of the limitations inherent to the Present Bias:

• Don’t pick things now; they will bear fruit later.
• He who says “I will live for today” is bound like a bull on a nose-rope.

These warnings are a nod to the wisdom finding a balance between enjoying the present and keeping an eye on the future. To be short-sighted and solely focused on the present is to hurt your long-term prospects and become a helpless captive to the winds of the day. But to never stop and smell the roses of the present, perpetually delaying your enjoyment of the moment, would be equally foolish. Our cognitive evolution is still in progress and challenging ourselves to balance consideration of the future against the natural pull of the present will be one of humankind’s greatest challenges for many generations to come.

As for me, I suppose the little European adventure that kicked off this post could be taken either way: Maybe I was wisely treating myself and striking while the iron was hot, or maybe I was bound like a bull to the FOMO nose-rope and simply volunteering for longer-term handcuffs without regard for my future-self’s opinion on the matter. Or maybe I was doing both and, at least for that moment in time, that was the younger me’s best effort at finding a present-future balance.