The Marshmallow Test, Revisited
Saturday, October 27, 2012
The Marshmallow Test, Revisited - At the Edge (usnews.com).
It seems to me that the two sets of research (the famous original testing a child's ability to delay eating a marshmallow in return for another one later and the new data suggesting that children learn such behaviours at home) actually fit well together. The new research merely explains why some children are more prepared to defer gratification; because they come from stable homes where promises are kept. That doesn't make the 1960s Stanford research wrong. Children able to pass the test still do better in life on average because deferring gratification leads to good outcomes. It's just yet another argument for good parenting. Flaky parents tend to raise flaky kids. Duh.
An interesting sidelight is whether governments that constantly change the rules (e.g. generating inflation to cheat their way out of paying their debts in full) affect adult willingness to defer gratification.
Why work hard when the government is going to take the lion's share of what you earn? Why be prudent, when it is going to inflate away the value of your savings, tax such income as they still yield, give the proceeds to the feckless, and manipulate interest rates down to protect over-borrowers and punish savers? The government itself (while the idiot left cries "austerity") is going further into debt at the rate of £2.3 billion a week and encouraging the most indebted consumers in Europe to spend more by way of "stimulus".
Not only is government annoyingly prone to treat us like children but it seems it also behaves like a very flaky parent.
Yes, I hope so.
Posted by: MickC | Tuesday, October 30, 2012 at 07:53 PM
Thanks for the invite. I would love to accept, but I am working tomorrow lunchtime. Some other time, I hope?
Posted by: Tom | Tuesday, October 30, 2012 at 05:02 PM
Interesting discussion. I happen to be in London tomorrow-can I buy you lunch and continue it?
Posted by: MickC | Tuesday, October 30, 2012 at 11:20 AM
Kids Marshmallow experiment - And of course the first one to break would be a girl. But you know, you threw in a chocolate bar and some graham crackers, the story would have changed in a New York minute.
Regards,
Jack
http://www.bergenrefrigeration.com/designs.htm
Posted by: Account Deleted | Tuesday, October 30, 2012 at 10:45 AM
Stuff. Trains, internets, robots, education, training...
I think the assumption is that any financial investment will lead to real investment in the economy - but only a fraction of the value of the stock exchange is due to new issues and I don't think its clear that increasing the price of existing stocks will lead to greater investment.
As for investment in bonds leading to lower interest rates - it depends on companies willingness to invest, which is partly controlled by the perceived demand for their services.
Saving in government bonds has no economic effect at all.
When you have countries such as Norway or Canada, saving vast amounts of money overseas for their pensions, I always wonder what will happen in the future. Presumably the pensioners will spend most of their money in Canada - surely all that will happen is an increase in the canadian dollar as they repatriate he money.
If there was no increase in the dollar, presumably the increased money, but lack of increased production in Canada would lead to inflation...?
I don't know, but I don't think we can assume that increased financial investments will lead to real improvements...
Posted by: Mark | Monday, October 29, 2012 at 11:33 PM
My investment in education led me to partnership in a City of London law firm. I guess I could have become a local solicitor doing legal aid work and it would not then have paid off. The lethal bit is the "all other things being equal" part. When I went to university, less than 20% of the population did. A lot less, I suspect. Now almost 50% of the population go and this has resulted in inflation - nurses with degrees etc.
The average extra earnings of a graduate are now only £75,000 in a career - not p.a., but per lifetime of work. That's unlikely to be worth the investment and as people who have gone to "real" universities to do "real" degrees can probably still expect payback on roughly the old scale, a lot of people will see no benefit or actual loss.
My old law firm would not look at graduates from anything but Russell Group universities. I suspect that's true of most serious operations. Just as in the US, most degrees are worthless except as self-esteem boosters (and bragging rights for grannies who don't understand that only Ivy League really counts). Clearly when deferring gratification, you have to do it for some serious purpose. You might as well laze on the beach as go to lesser universities - unless you are doing something totally vocational there.
Deferring gratification by investing money to earn later, rather than splurging on immediate pleasure is also subject to inflation, obviously. If we can't be confident that governments will NOT debase currency then the same logic will apply.
If you have the wherewithal and the intellectual ability my advice to a young person now would be to become a tax lawyer or tax accountant. When I started out in the Labour-wrecked 70s, they were the people making out like bandits. In a high tax economy, tax planning and structuring (aka avoidance) becomes the most valuable skill and people will pay highly for it. In a sensible economy all that talent would be deployed to production, which would serve society far better of course.
But as Britain is an envy-driven, talent-hating society now, that's pretty unlikely in the foreseeable future.
Posted by: Tom | Monday, October 29, 2012 at 09:02 PM
Again I'm afraid I disagree.
An example may be given of a friend who stayed on at school (scholarship to grammar, etc.-all the "good things" our generation were told to admire) to get O levels. His mates left at 15 and got jobs. At 17 they had cars (but he would overtake them later). At 18 he went to university -they had better cars and a better standard of living (but he would overtake them later). At 21 he had a degree and started on a job and a professional qualification -they had bought houses (but he would overtake them later). At 30 he had the professional qualification-they had a better car, better house and savings (but he would overtake them later). He is now 56, still working-they have a better car, house, standard of living and rental incomes coming in and only work if it pays really good money. He'll never overtake.
Isn't deferred gratification just the nonsense sold to the gullible to keep "society" in order-in fact a materialist religion where there are future rewards for being good? But like religion those rewards are illusory?
Don't misunderstand-I too swallowed (was brainwashed with?)the deferred gratification idea, and want to believe it. Experience dictates otherwise-and I'm stupid enough not to take note of experience!
Posted by: MickC | Monday, October 29, 2012 at 05:15 PM
OK, I'll fall for it. What do you mean by "real investment"?
Posted by: Tom | Monday, October 29, 2012 at 11:58 AM
I agree- we need to have consistent enforcement of rules and a stable environment for business. Unfortunately, the world you propose - a world with no government benefits, one in which a single misfortune or illness could you leave you destitute, is equally likely to be damaging.
Posted by: Mark | Monday, October 29, 2012 at 10:03 AM
Investing money doesn't benefit society - real investment does.
Posted by: Mark | Monday, October 29, 2012 at 10:00 AM
It's not entirely black and white, obviously but on the whole deferring gratification is a key part of what distinguishes the prosperous from the not. For example. I have £100. I can go out on the town with my friends and get instant pleasure. Or I can invest it in my pension fund and (assuming some Gordon Brown fan doesn't raid it and I actually live to pension age) I derive more benefit later. If everyone did the first thing, society would clearly suffer from lack of investment (which is what the pension fund will do with the money). If a good proportion of people do the second thing, society benefits from the optimism of the person who defers his gratification. Whether he benefits or not depends a little on luck. On the other hand, my family used to be publicans. Some still are. Maybe you should all do the first thing and THEY can invest the money in their pension funds?
Posted by: Tom | Monday, October 29, 2012 at 09:16 AM
Mick makes a good point. Maybe we should talk about the _ability_ to defer gratification? And maybe the ability to assess if it is actually a benefit or not?
Posted by: Moggsy | Monday, October 29, 2012 at 08:47 AM
This is an interesting take, one that I had not considered before.
The government can be seen as a feckless parent that breaks promises and removes any incentive to delay gratification, so the vicious circle operates on two levels.
I wonder how to break that one, then.
Posted by: Mark in Mayenne | Monday, October 29, 2012 at 08:41 AM
Thank you. Just enter your email in the box in the sidebar and hit the "subscribe" button.
Posted by: Tom | Monday, October 29, 2012 at 07:31 AM
A very fine article and exceptional blog. Is there any way I can subscribe to new articles, you know like acquiring them on email or something like that.
http://www.surveytool.com/customer-feedback-form/
Posted by: Robert | Monday, October 29, 2012 at 06:32 AM
Good point. I guess I would reconcile it by saying that, all other things being equal, deferring gratification produces better results.
Posted by: Tom | Sunday, October 28, 2012 at 11:36 PM
Whilst this is an interesting post,there is a difficulty.
Your first paragraph states "deferring gratification leads to good outcomes"-but gives no evidence to support that statement. Your penultimate paragraph proves with evidence the exact opposite. Certainly those who have deferred gratification have lost-in spades. The outcome has not been "good" for them in any meaningful way at all.
In fact to achieve a good outcome for the individual, they must preach deferred gratification, whilst taking all they can. It is precisely what our rulers do-to their own, and immediate benefit.
So yes, adult behaviour has indeed been affected by our rulers-the outcome will be extremely detrimental to "society", but it is probably too late to be changed quickly.
Posted by: MickC | Sunday, October 28, 2012 at 09:17 PM