Psychologists have coined an interesting phrase relevant to building a new economy in the Great Recession. They call it the Fundamental Error Attribution. It comes out of Attribution Theory – the study of how and why we explain, (or attribute), what happens in the world. Most times we automatically assume that individuals are responsible for what happens to them. This is a good attitude to have when we are toddles learning basic things, like how to walk, or feed ourselves or learn to use the potty. If we didn’t accept the idea that we are in control of our fate there wouldn’t be much point in trying to learn anything. We would just allow fate to throw us about on the winds of chaos and see where we landed. Instead we work our will upon the world and learn how to bend it to our will.
But there is a problem here as well. We carry this attitude with us as we get older and ignore things in the environment that might help explain what happens to people. When cousin Sue trips over a loose piece of carpet we laugh and jeer, “Have a nice trip?” We ignore the fact that the carpet cousin Sue tripped on was old and curling up, and that she was carrying a laundry basket and couldn’t even see the carpet. But we jeer anyway because it makes us feel more competent, superior, and more highly skilled. After all, it wasn’t us who looked clumsy in front of an audience.
This habit of blaming people and ignoring circumstances carries on to adulthood. Recently one of the Presidential candidates – a self made millionaire – said that anyone who was not a millionaire didn’t try hard enough. I’m sure he meant that America offers incredible opportunities for people who are willing to work hard, but the way he said it reveals the Fundamental Error Attribution – that we are solely responsible for what happens to us, and circumstances have no bearing on our fate.
It turns out none of that is true.
A few years ago Leonard Mlodinow, a physicist, wrote a fascinating book about the role random chance plays in our lives (Mlodinow 2008). He looked at winning streaks, for example, but from a slightly different perspective than we usually think of them. When a basketball team has a number of consecutive wins we usually think that the team must be better than other teams. They must have trained harder or had a better coach. But when Mlodinow looked at groups of consecutive wins as single events and crunched the numbers things changed. It turns out that professional sports teams are so well matched, are all so similar to one another in terms of ability and chances of winning, that consecutive wins are a mathematical certainty, but occur randomly. It’s like flipping coins, or putting dollar bills in gambling machines. Sooner or later there will be a consecutive series of identical outcomes, but those series are randomly distributed. Given the number of teams in the NBA, somebody has to experience a winning streak. Probably more than one team, given the number of teams and the number of games they play.
What does this have to do with the challenge of making a living during an economic depression?
It turns out that the same principle of random chance is at work when we look at employment or career success. People who have the bad luck of entering the labor force during a recession do not have the same opportunity for finding good jobs and gaining experience compared to people who enter the labor force when times are good. They flounder in the labor market until things pick up but then find themselves competing with a much larger pool of competitors, some of whom are younger and have more recent training.
Lisa Kahn has done some interesting research in this area and has identified two very interesting things about labor markets during recessions. First, people who enter the labor force during a recession never catch up – those age groups never make as much money or go as far in their careers as the age groups just before and just after them. Second, those lucky few who have the good fortune of being hired into traditional jobs during downturns tend to stay longer with the hiring company and experience better career success than those who are hired before or after (Kahn 2008, 2009).
One of the things influencing these outcomes is something psychologists call the Halo Effect. This refers to our tendency to ascribe positive attributions to people or things close to successful outcomes. For example, if a movie is a hit, we tend to go to see the sequel, and buy books written by authors who have previously written bestselling books. We do these things even though we know that sequels are rarely as good as originals, and that sometimes authors simply rehash their initial bestseller under a new title. Success confers its glow to things and people associated with it.
The principle holds true in careers that are launched during recessions. Previous success makes us look like winners in the eyes of others, but career stagnation makes us look like losers. As we’ve seen, success is often dependant on the economic conditions under which we enter the labor market. Economic downturns offer fewer opportunities to showcase our abilities, and that disadvantage follows us for the rest of our career.
This all sounds awfully bleak and depressing, but there is a different way to look at these lessons.
Now that we know about things like the Fundamental Attribution Error and the Halo Effect we can figure out how to use them to our advantage. You might not be able to use accolades or endorsements from a traditional job to illustrate your abilities, but you can create your own. We all have goals and dreams – things we have thought about, but never did because it was too time consuming, expensive, or maybe we just didn’t know where to start. Very often those dreams and goals are related to things that we are passionate about or spent a lot of time practicing. Put all that together – dreams, goals, practice and passion – and you may have some formidable accomplishments very close. Now is the time to put those opportunities into gear.
Right now might the time to write that book or magazine article you’ve always considered, or to patent an idea or invention. Use that accomplishment as a Halo Effect to make yourself look like an expert. Do something noteworthy position next to the successes of others and tell the world about it. People will want to be associate themselves with you, and that leads to making the kinds of contacts that helps ensure future successes.
Remember that the Fundamental Error Attribution means that people will tend to see you as a self made success, so don’t say or do anything to dissuade them from thinking so. Don’t chalk up your success to luck or good fortune, even though they play a large part. Modesty just undermines the power of the Fundamental Error Attribution. Instead, mention the amount of time you practiced or studied or worked on your project and give thanks for the skill, talent or intelligence you have been blessed with. This was not something anyone could do – it was something only you could do, because, well, you did it. This approach supports the Fundamental Attribution Error that makes others assume that you are solely responsible for what you have accomplished.
We are living in a new era. Things have changed and we have to think in different ways than we have in the past. We need to learn new ways to make a living, and understanding the work of Lisa Kahn and concepts like the Fundamental Attribution Error and the Halo Effect can open opportunities that we never knew existed.
Kahn, L. B. (2008). Job durations, match quality and the business cycle: What we can learn from firm fixed effects. Unpublished Working Paper. Harvard University.
Kahn, L. B. (2009). The long-term labor market consequences of graduating from college in a bad economy. Labour Economics, 17(2), 47.
Mlodinow, L. (2008). The Drunkard's walk: How randomness rules our lives (1st ed.). New York: Pantheon Books.