User:TillisOakes580

BARELY a week goes by without a report on the level of confidence among consumers, businesspeople and investors. Optimism is what?s wanted?Keynes talked of the ?animal spirits? that influence economic activity. Pessimists are routinely denounced as Jeremiahs. Those who try to bet on falling prices find their activities are restricted.

A cheery disposition may be necessary for societies to function. Daniel Kahneman, a psychologist and Nobel economics laureate, has a chapter in his book ?Thinking Fast and Slow? which describes overconfidence as ?the engine of capitalism?. No entrepreneur can be sure that his planned investment will succeed but if no one took a risk, new products and jobs would never be created. A certain blindness to the odds may be necessary. According to Mr Kahneman, the chances of an American small business surviving for five years are just 35%. But ask individual entrepreneurs about their prospects and 81% think they have a better than seven-in-ten chance of success.