Confidence makes the world go round

I’ve been listening to Freakonomics Radio and Planet Money on my car ride to work. Economics is a fascinating subject. It has just as much to do with human psychology as UX Design. One segment was by some guys who fixed Brazil’s hyper-inflation by inventing a new kind of money. They said, “People have lost confidence in the stability of our old money. We need new money.” (Paraphrasing)

Confidence is required for all society to work. Some examples:

  • A company hires you with the expectation that you will provide value to the organization greater than the amount you are paid. They give you money with the confidence that you will show up and do things.
  • We go to a voting booth on election day with the confidence that it is fair and that the winner is the one who gets the position.
  • We have confidence that if we drive on the right (correct) side of the street, that everyone else will do the same.

Imagine a world where you didn’t have confidence that people will stop at stop lights? You would be terrified of driving!

Imagine a world where you didn’t have confidence that your tenant will pay rent or that the super market would take the money and give you food. You would hoard food and not rent the apartment.

All society would fall apart. We would not be able to do anything without confidence. One of the interesting quotes from Paul Volker (former Chairman of the Federal Reserve) was “If people stopped thinking inflation was going to happen, then it inflation would stop immediately.”

Our perceptions are responsible for our realities. If we believe something, then it is true. If we don’t, then it is false. How cool is that?

We are in control of our destiny. We can be confident and have a positive future or lack confidence and have a bad time.


Keep in mind, it doesn’t work for just a few people to be confident. We have to do it together. I have confidence that we will do it.

2 replies on “Confidence makes the world go round”

Can’t solve a confidence in counterparty lending (debt) problem with excess liquidity. The same holds true with org debt.

Whatya think?