The Rainbow of Finance
After forty years of listening to people about their economic and medical problems, one thing has become clear to me: our financial inequalities stem primarily from significant differences in how we manage our money. Humanity seems roughly divided into two halves: those who spend less than they earn, and those who spend more, regardless of income level. One half thus tends to follow an upward financial trajectory, the other a downward one. There are rich people who are becoming poorer, having not created their initial wealth, and poor people who are becoming richer starting from nothing.
A bit simplistic? You don’t categorize the people around you so easily? I will explain at the end of this article why these two halves of humanity are not so easily discernible in the social landscape. The vagaries of personal histories blur the line, as you can well imagine. It is at the extremes that the two tendencies are clearly expressed: when everything seemed to point to personal success, yet it eluded them, or when everything was supposed to extinguish it, yet it blazes forth.
Why do we belong to one half or the other? Our temperamental traits are summoned in that instant! They form a kind of rainbow of financial energy. At one end of the spectrum, we have the obsessive savers, who patiently and steadily increase their wealth. This is the ultraviolet of finance: cold, energetic, and barely visible. At the other end, we have the inveterate gamblers, who bet everything on hopeless causes. This is the infrared of finance: warm but depleted of its energy, also ending up invisible.
Between these two extremes, risk-taking is more diverse, resulting in brilliant successes, vibrant achievements, and flashes of genius. A kaleidoscope born from the vagaries of life. But beyond temperament and chance, I wondered if there wasn’t a specific law explaining this curious division of humanity between those who spend less than they earn and those who spend more. In other words, what special rule does our economic mind follow?
Desire, Fear, and Evaluation
Our mental economic function has a simple objective: to evaluate our behavior in order to maximize the satisfaction of our desires and minimize our fears. This points to three potential stumbling blocks for personal financial health: 1) excessive desires, 2) insufficient fears, and 3) poor evaluation skills.
Desires and fears vary from person to person. They cause our destinies to diverge rather than converge. It is behind their fluctuations that we must look for a more general law governing the economic mind. Perhaps it reveals itself more clearly when youth fades and the mind matures. Experience brings desires and fears back into balance. Our unrealistic hopes are dashed. Timid attempts gain confidence through success. Balance, did I say? This is where our third stumbling block comes in: evaluation. Here we are at the heart of our subject.
Qualitative and Quantum
There are many ways to evaluate things, from simple to sophisticated. Can we group them together? Some focus on the variety of criteria collected. This is the qualitative approach. Others concentrate on the precision of evaluating a criterion. This is the quantitative approach. How do these preferences take shape in our minds?
The qualitative richness of evaluation rests on personal sensitivity. If I am naturally sensitive to many characteristics in things, I have a very detailed image of them; I can individualize them very well. Sensitivity comes from the volume of information I process. With all my senses functional and alert, the environment around me teems with details. Sensitivity also comes from the attention paid to details. I can let my unconscious announce that a certain object is an apple, or focus my attention on it and recognize its variety, its state of ripeness, and so on.
And what about quantitative precision? It relies on the ability to decipher numbers, no longer a sensory aptitude but a cerebral skill for mathematical processing. The major contrast with sensitivity is that it is less readily available. Not innate, one might say? Note that there is indeed a predisposition of the brain to process numbers, but the differences between individuals are much more pronounced than for sensory abilities. The variety of the senses means that genetic variations tend to balance each other out more. If I have a less detailed sense of smell, I might have a more acute sense of hearing. If I have a slower visual perception of movement, I might be better at distinguishing colors. And so on. Whereas mathematical ability is unique, creating a more or less efficient neural organization, without compensating for genetic differences.
Given these significant differences, the brain’s quantitative precision must be considered largely innate. Starting positions are very unequal. But this also leaves considerable room for acquired skills to bridge the gaps. Education plays a major role in this regard. Mathematical ability is also largely acquired.
Let’s realize, by the way, that it’s a mistake to oppose nature and nurture. Separating them into percentages, when it comes to our skills, is absurd. Let’s talk about the strength of nature and the strength of nurture, adding them together instead of subtracting one from the other. No more hereditary “defects” and educational “burdens.” We keep only the positive and move on to “super-percentages,” with 300% mathematical aptitude in the end if you work at it.
Moving to pure positivity also introduces a hierarchy. Ouch, that’s not in keeping with the times. Percentages are fashionable because they’re politely egalitarian, respectful of the politically correct. Our innate and acquired components total 100% for everyone. All the same! The hierarchy doesn’t reciprocate. Instead, it offers the odious IQ. So detestable to our proud ego, inferior to others, that today you find a multitude of websites dedicated to calculating an inflated IQ of 160 for the price of your visit.
Equal qualities, unequal quantities
Yet we have a hierarchy of calculating aptitude in the human species; that’s a fact. What is its effect on behavior? Will it only determine our future profession, who the billionaires will be? Or does it have deeper implications for our destiny? You can guess its role in the preference between the aforementioned modes of evaluation: the qualitative and the quantitative. Those with a sensitive nature rely on the content of their impressions, while those with a mathematical mind have their internal calculators running at all times.
Nevertheless, you cannot imagine the extent to which this preference shapes every aspect of our lives, even our adaptation to the social order. A “qualitative preference” is susceptible to egalitarianism. How could one possibly compare qualities to one another? Each exists in its own specific domain, lending itself to local evaluation, not a general ranking. Each has its dominant qualities; no “game” is inherently better than another.
A “quantitative preference,” on the other hand, is sensitive to hierarchy. It uses its numerical evaluation to position individuals and things on value scales. Each quality is linked to its value within a context. It’s simply a matter of comparing scores and selecting the highest to assign each person their dedicated task. Hierarchy seems natural to the quantitative type. Their ease with quantification is also reflected in their G factor, this much-maligned but nonetheless easily identifiable criterion of “general” intelligence. A good G factor makes one versatile in different professions. Quantification improves the efficiency of all intellectual processes, both in terms of abstraction and physical effectiveness.
The M Factor
To complement the G factor, which is general for intelligence, I will introduce the M factor, which is even more general for Mathematics, or more precisely, the capacity to quantify that underlies the capacity to organize. Can its existence be demonstrated? Let’s limit ourselves for now to an illustration. In a 2017 survey on the french presidential election, humanities students voted overwhelmingly for the left; engineers and business students, joined by economists, voted for the right. It is impossible to explain these trends using Marxist class theory. The criterion of ‘social origin’ does not emerge, nor does general intelligence. However, the type of studies undertaken is a differentiating factor.
Sensitive people, lovers of Proust, vote clearly for the left, almost without exception. Mathematicians, fans of rules and equations, tend to vote for the right, except perhaps for pure researchers, who are only minimally involved in social life. But the left is the cradle of egalitarianism, and the right that of hierarchy. Is this a surprise? We find our preferred qualitative types on the left, supporting egalitarianism, and our quantitative types on the right, preoccupied with hierarchy. Voting is more deeply rooted in our psyche than we realize. It is partly genetically programmed!… I am, of course, keeping my distance from the absurdity of percentages.
But if this factor M, the ability to quantify, impacts such a profoundly complex choice as voting, wouldn’t it have effects on every aspect of our lives? I became convinced of this as I listened to the many individual stories that pass through my office. It is indeed this factor M that, to return to our initial question, puts half of people on an upward financial trajectory, and the other half on a downward one.
Quantification begins, in fact, at the very foundation of our minds, as soon as neural signals are organized into concepts based on their intensity, repetitiveness, and synchronization. Quantification measures and ranks. Conceptual alternatives are compared and selected. Synthesis progresses. The mind becomes more complex.
The qualitative thinker is a good empath. They have many friends because they retain many alternative mental representations, varied in quality and better suited to the particular personalities of their peers. The quantitative thinker, on the other hand, is a good manager and has a better bank account because they frankly decide on the most accurate representation and, if they have chosen the right criteria, easily bend reality to their desires.
From the tribe to the global economy
One might be surprised by such a genetic gap in the aptitude for quantification. Why hasn’t evolution selected the right genes to better spread this skill across generations? It didn’t have time. It hadn’t foreseen that the species would build such a complex society in two centuries, that it would invent money. In a tribe, qualitative evaluation is advantageous. A small number of members. Treating them according to their individual qualities is more effective than counting them. No need for hierarchy. Anarchy works. The tribal human is a natural anarchist, as is their descendant in modern society: the far-leftist who judges qualities rather than quantities.
We are always born with this predisposition for tribal life. However, we are unequally equipped with natural mental quantification, which boosts one’s destiny within a highly organized society. And this is evident from early childhood, in the ability to manage one’s environment, to be interested in qualities through touch or quantities through observation. When numerical reasoning accompanies each new discovery in a child, it structures their mind, transforming them into a natural little economist. They begin to prioritize their desires. She is capable of restraining one desire to satisfy another, quantitatively greater one. Because she can compare them, unlike the qualitative child who considers all her desires equally. The famous Marshmallow Test, which rewards a child with more treats if she waits to eat them, can be explained in this way. The key takeaway is that it differentiates between qualitative children, who hardly distinguish between the pleasure of devouring one or three marshmallows, and quantitative children, who are attentive to this difference.
Mental calculation shapes our entire personality and personal history, down to the smallest action. Managing the refrigerator, shopping, clothing, vacation destinations, career choices, reading material, motivation at work —everything is a matter of internal equations! Some mental calculators display a multitude of results, jostling for position, making it difficult to choose. While others present a clear and precise choice.
We don’t realize how different the worlds of qualitative and quantitative thinkers are. When qualitative thinkers believe they’re managing their personal budget correctly, they’re making serious mistakes in the eyes of a quantitative thinker. When the latter thinks they understand someone’s personality, they mostly know people who calculate like them, and only superficially understand everyone else.
Between Nature and Nurture
Finally, there are some curious intermediate cases, and I know one of them intimately. These are people with no innate aptitude for quantification, to the point that if they are correctly identified by the educational system, they are diagnosed with dyscalculia. This label earns them special support. Acquired skills come to the aid of innate abilities. Perhaps the most surprising thing is when this support becomes so attentive that it guides their career choice. The person becomes an accountant or a bank employee, even though they are naturally more gifted in interpersonal relationships thanks to their qualitative inclination. Why not? I have always believed that one should not turn their passion into their profession. It is the last thing to be dulled by daily uniformity.
So, in these surprising individuals, we have, in matters of calculation, a strong acquired skill on top of a weak innate talent. Is the result simply an addition, as I suggested at the beginning?
Not quite, and I therefore need to put my naive positivism into perspective. In matters of complexity, levels of efficiency don’t add up, they superimpose. What does this mean? Efficiency is built from the bottom up. If the foundation is flawed, the top can never reach the same height as on a sound foundation. It’s possible to correct mistakes at higher levels. This is what education does: it corrects errors. Some people need it, others don’t. It’s not hard to understand that the latter surpass the teacher on their own.
When formal education intervenes to correct quantitative judgment, the foundations of personality are already in place. Many everyday actions aren’t quantified. Many opportunities are considered equivalent to others. For an artist, this is a tremendous advantage. For someone involved in a complex economy, it’s a handicap. They will struggle to prioritize their desires, choose between them, and manage their finances. They spend more than they earn because this equation isn’t central to their decision-making. The quantitative type, on the other hand, constantly keeps it in mind without even realizing it. They save without thinking.
The Black Swan
Thus, we have in this landscape some astonishing black swans, qualitative by nature and quantitative by training, as comfortable as anyone else navigating the (mathematics) lake of signs but who would struggle to dive into the depths. They have developed effective, highly personal habits for managing numbers, entirely the result of acquired knowledge. We must commend this exceptional tenacity in mastering a language for which one has little aptitude. It is certainly a more remarkable achievement than being genetically gifted with it.
This doesn’t make them rich, however. They have little chance of becoming bank directors, CEOs, or billionaires in any field. They are prevented from doing so by their value judgment, which remains fundamentally qualitative and egalitarian. Climbing the hierarchy isn’t about settling accounts at a given moment; it’s about calculating from the very core of one’s personality, being entirely focused on quantification, being oneself an internal hierarchy that extends into the social sphere.
Our black swan remains qualitative by nature, practicing his profession with a veneer of quantification. she arrogates to herself no power superior to others, nor does she make her own inferior to anyone else’s. She is conditioned for the economy of giving. An offering may eventually lead to another in return, of equivalent quality, without any measurement intervening. This economy doesn’t sit well with money or numerical accounts. The wallet is opened, and something is taken from it, without checking if anything else remains. That would be counting, not giving. There’s no point in trying to fill a purse when you’re focused on quality, since it only has an opening, and no bottom…
Economic Fauna
So this is how calculating genes determine our social landscape. The mass of qualitative types are like fish swimming in an ocean of numbers, breathing them in without metabolizing them, struggling when it comes to actually using them. They advocate for forming a single, vast, and egalitarian school. The quantitative types are like white swans, gliding effortlessly across the ocean of numbers and taking off to reach the clouds of the economical elite. And finally, the black swan manages rather well, shunning the sky but rarely struggling, and always friends with the fish. It makes a wonderful companion 😉
Don’t jump to the conclusion from this article that there are lucky and unlucky people. In fact, depending on whether the analysis is qualitative or quantitative, the labels are reversed. My metaphor of the swan taking off towards the sky is a two-way: it can fall flat on its face. The fish has a more tranquil life. Let’s say that the swan is favored by the modern economy based on property and money, while the fish is more at ease in communal living and the gift economy.
Social positions are not dictated by the ability to quantify. A reduced ability leads to greater emotional intelligence, the most qualitative kind. The empathy it provides allows one to leverage quantitative skills to their advantage. Social circles mitigate the differences between qualitative and quantitative approaches. In a couple, if one person spends more than they earn, there’s a good chance the other is able to do the opposite.
So don’t look for the two economic halves of humanity in the social landscape. They are hardly apparent, even though the ability to quantify underlies each of our actions. Our minds are numerical. We never fully grasp their significance when faced with an isolated act, purely qualitative in itself. Measurement can only be made of the complex, invisible chain of events that produced that act. Quantification operates at a deep level, not on the surface.
The good news is that it’s not necessary to undertake an endless psychoanalysis of our failing economic unconscious. A few cognitive-behavioral techniques will suffice. The black swan is there to attest to this. It will never be a billionaire exploiter, but it will never be destitute either. It will be the one most inclined to help others without shirking its responsibilities to state-run solidarity. And to pass on to them some notions of quantification so as not to fall back into the same trap.
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