Can you spot pseudo-profound financial bullshit? There’s a test for that
- Psychologists have been studying “pseudo-profound bullshit” for years.
- The concept refers to speech that is designed to impress but doesn’t really mean anything.
- In a recent study, researchers examined how people respond to bullshit lingo in the financial world.
Your money transforms universal actions.
Does that sound like nonsense? If so, you’d probably score high on a test that was recently used in a study to measure people’s ability to discern between statements that contain genuine insights about finance and those full of “pseudo-profound bullshit.”
Yes, that’s the technical term. In recent years, there’s been a surge of academic interest in bullshit and the ways people get duped by it. The field emerged largely thanks to the philosopher Harry Frankfurt, whose 2005 book On Bullshit argues that, because there’s so much bullshit in our culture, there ought to be a sophisticated theory of bullshit instead of us just taking it for granted.
Bullshit, defined
What is bullshit? Frankfurt described it as speech designed to impress but without real concern for the truth.
“The essence of bullshit is not that it is false but that it is phony,” Frankfurt wrote. Bullshitting is not quite lying. After all, you need to think you know the truth in order to lie. “Producing bullshit requires no such conviction,” Frankfurt wrote. As such, bullshit emerges “whenever circumstances require someone to talk without knowing what he is talking about.”
Some examples: Wholeness quiets infinite phenomena. Self-power gives rise to self-righteous spacetime events. Matter is the experience in consciousness of a deeper non-material reality. (You can generate your own pseudo-profound bullshit through this random Deepak Chopra quote generator, by the way.)
Studies on pseudo-profound bullshit suggest that people who are highly receptive to it tend to be lower in verbal intelligence, less reflective, less prosocial, and are prone to conspiratorial thinking and believing fake news.
A recent study, published in the Journal of Behavioral and Experimental Finance, examined how people respond to pseudo-profound bullshit in the financial world. Confusing and loaded with jargon (“doubled value-added bonds”), the researchers noted that finance is a “hotbed” where bullshit thrives and confuses people, potentially hurting their bank accounts.
The financial bullshit scale
The goal of the study was to uncover factors that could predict who is more likely to fall for financial bullshit. So, like previous studies on bullshit, the researchers created a list of finance-related statements that ranged from actually profound to total bullshit.
Some statements were direct quotes from people like Benjamin Franklin, Robert Shiller, and Milton Friedman. These ranked higher on the scale, toward profoundness. On the bullshit end were statements very similar to nonsense quotes used in similar previous studies, and also financial gibberish generated through makebullshit.com.
See if you can spot the difference:
- Money eases the costs of those who borrow.
- Finance is not merely about making money. It’s about achieving our deep goals and protecting the fruits of our labor.
- A cheap loan is beyond all new destiny.
- A budget tells us what we can’t afford, but it doesn’t keep us from buying it.
- Inflation is taxation without legislation.
- Wealth and perseverance provide money for the poor.
Answers are at the bottom of the article.
Who is more susceptible to financial bullshit?
In the study, about 1,000 online participants rated the profoundness of these statements and similar ones. The participants also completed a more-established inventory that measured their receptivity to general bullshit, and they also filled out inventories that measured numeracy, financial knowledge, well-being, and behavior.
The study found that the people most likely to get duped by financial bullshit were young males with higher income who were “overconfident with regards to their own financial knowledge.” In general, older people were better able to detect bullshit, a finding that aligns with previous research on general bullshit. Those who seemed to have the best financial bullshit detectors were older women with lower incomes who weren’t overconfident in their financial expertise. Education level was not associated with the ability to see through financial bullshit.
“The fact that education level is uncorrelated with susceptibility to financial bullshit could indicate that it is more important to be street-smart than book-smart when it comes to detecting and distinguishing financial bullshit,” the researchers wrote.
Whether it comes from the streets or the books, data suggest that the U.S. could use more financial literacy. According to the Milken Institute, about 43% of Americans are financially illiterate, with younger people especially struggling to understand basic financial concepts.
“By extending research on the psychology of bullshit into the domain of financial decision-making we hope to spur future research on what we think is an overlooked topic in consumer research: the impact (bad) financial communication has on consumer financial decision making,” the researchers wrote.
Answers: Bullshit: 1, 3, 6; actual quotes: 2, 4, 5
