Jonathan B. Wight
Radiolab produced a fascinating show on self-deception—or, why lying to ourselves is good for you (click here).
Adam Smith also hypothesized that self-deception was a normal part of the human experience, and in fact drove us to greater progress:
And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life…. (Theory of Moral Sentiments, Liberty Fund edition, p. 183)
On the radio show, scientists report that people who perform at the highest levels in swimming routinely lie to themselves. They think they are invincible and they believe it when going out to compete. One swimmer said it would be impossible to win without telling yourself such lies.
On another show called Placebos, a WWII doctor reports that soldiers shot on the battlefield experienced markedly less pain than people shot in civilian life. What accounts for the difference? One theory is that soldiers are tough guys who bear pain more stoically. But that theory doesn't hold up under scrutiny. What appears to be happening is that soldiers feel less pain because of the background circumstances in which they are shot.
"It's not just about the bullet, it's about the story that comes with the bullet." In short, context matters.
A soldier's mental context of being shot might be something like this: "Okay, I'm still alive, and if I survive I'll be moved to a hospital … which means I'll be getting a medal and ultimately I'll likely get out of this war!"
By contrast, a storekeeper shot by a robber has perhaps a totally different mental context: "Okay, I'm still alive, and if I survive I'll be moved to a hospital… which means I'll have major health bills and no one to run my store and ultimately I'll likely go bankrupt!"
Two different "stories": The soldier feels relief, which lowers stress levels and perceptions of pain. The shopkeeper feels heightened stress that exacerbates the experience of pain. Identity is constructed by such stories: our narrative creates meaning with huge repercussions for health care, productivity, and other indicators.
If context matters to our perception of pain, it seems understandable that soldiers returning from WWII reintegrated to society more easily than in modern wars, since today so few people serve that returning soldiers may feel isolated and forgotten.
"Lying to ourselves" creates a context or narrative for experiencing pain. By lying to ourselves we artificially create a background for lowering the experience of pain.
While predicting the future is impossible, this discussion reminds me of a strong intuition I have that in 30 years there will no longer be a discipline called "economics." Instead, there will be a megadiscipline melded from biology, psychology, and economics—biopsychonomics, or some such thing.