Envy 🔗
Simply put, envy is nothing more than a crappy feeling that doubles down as a psychological condition responsible for creating plenty of human misjudgement. If we look at it from a strict behavioral psychology standpoint, envy is the byproduct of how us, as humans, are influenced by our perception of scarcity and social proof. It is in our nature to value that which is rare, uncommon, and decreasing in availability, while it’s also valued by our peers. Hence, if we couple scarcity and social proof with zero sum thinking, when other people have something we would like to have we do not like it, but when we have something others would like to have, we like it.
Luxury brands understand this concept well. This is because their impressive 30% net profit margin is built on selling goods for 12 to 20 times the cost it took to make them. Let’s be honest, why would anyone in their right mind buy a pair of shoes or a bag for 20 times its manufacturing cost? However, let’s not be quick to judge, since the answer lies in a rather primal trait that exists in all of us: our obsession with hierarchies or what is commonly referred to as status.
When it comes to hierarchies we are really not that different from iguanas. You see, iguanas understand hierarchies. Doing so is important for them because in many ways it will impact their odds of survival. In simple terms, the higher an iguana is in the hierarchy, the more likely it is to find a suitable mate and enjoy less competition when looking for food. If we transpose this to humans, the higher our status, the better our odds to get virtually whatever it is we want. However, the only difference between us and iguanas in relation to status, is the form in which it is signaled. Iguanas use the size of their spada, while us humans are more superficial and easier to fool. Anything that signals access to money or popularity (i.e. something that seems scarce or portrays social proof) tends to do the trick.
As it can be inferred from the previous paragraph, the reason why envy is so dangerous is because of how easily we can be tricked by anything that signals status and all the things we are willing to do to signal status. To paraphrase Mark Twain “people will do anything to be loved, but they will do everything to be envied”. If you need proof, just look at how all financial bubbles and ponzi schemes are created, inflated, and destroyed. As a matter of fact, according to Peter Lynch, one of the best predictors of a financial bubble bursting is when people talk about financial instruments during social gatherings. It is when making money in the markets appears easy that most people ignore any form of reason and invest in financial assets just because someone they knew made money by doing so and they don’t want to miss out.
So what can we do about this whole envy situation? Well, the first thing to understand is that despite everyone on social media appearing to be a baller and having a perfect life, in reality we are all idiots and that’s OK. The second thing to know is that luck plays a bigger role in producing good outcomes than most people are willing to admit. We all love the success stories of people, who despite insurmountable odds, managed to outwork and outsmart everyone to become masters of the universe. The more real version of these stories is that even though these people might have outworked and outsmarted everyone, they also got incredibly lucky in one way or another. Bill Gates was one of fifty kids in the world who had access to a computer in the 1960s, Jeff Bezos started Amazon with a 250K loan from his parents (and plenty of planetary alignment as he put it), the Google guys hired Jeff Dean, and the list goes on. All these guys were incredibly smart, hard working, great executors, and took massive risks, but they also had plenty of luck. Lastly, while most people will envy you for your looks, your success, and your possessions, almost no one will envy you for your wisdom. I personally like to do the opposite. If I’m going to envy someone it’s going to be for their wisdom and nothing else. I like this approach since wisdom can come from anyone, like my grandma, a friend, or a teacher, just like it can come from Charlie Munger or Ben Franklin.