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I’ve just finished reading The Myth of Self-Esteem by Albert Ellis, the founder of Rational Emotive Behaviour Therapy, better known as cognitive behavioural therapy, or CBT. It’s terribly written, tendentiously repetitive and often plain dull. But for sheer insight it’s still the best book I’ve read on the subject of confidence.

Ellis’s main point concerns the difference between self-esteem and self-acceptance. I have some major problems with his theory as a whole, but I am in complete agreement with this. Here’s the quote (from page 37):

Self-acceptance and self-esteem may seem, at first blush, to be very similar; but actually, when they are clearly defined, they are quite different. Self-esteem – as it is fairly consistently used by [Nathaniel] Branden and other devotees of Ayn Rand’s objectivist philosophy – means that the individual values himself because he has behaved intelligently, correctly or competently.

Self-acceptance, on the other hand, means that the individual fully and unconditionally accepts herself whether or not she behaves intelligently, correctly, or competently and whether or not other people approve, respect or love her.

Ellis’s argues, in short, that we are neither our actions nor our relations. What you do may be part of you, he contends, but it is not all of you. You and the people you know might assess your actions, or even your thoughts and feeling, but they cannot measure or evaluate you as a totality. This anecdote, from Michael R. Edelstein, illustrates the idea:

In the 1960s, Joe Pine, an acerbic conservative TV talk show host, had as his guest the long-haired rock musician Frank Zappa. Pine was prone to surliness, which a leg amputation–he wore a wooden prosthetic–may have exacerbated. As soon as Zappa had been introduced and seated, the following exchange occurred:

PINE: I guess your long hair makes you a girl.
ZAPPA: I guess your wooden leg makes you a table

Leadership coach John Baldoni had some words on confidence in the Wall Street Journal last week. He defined it in terms of three key attributes:

Realism. Confident leaders are those who can look reality square in the face and deal with the consequences.
Reassurance. Leaders need to share their sense of confidence with their people.
Resolve. The strength to persevere is a form of confidence.

For Baldoni, like Mark Penn, Roosevelt is the epitome of a confident leader. The cover story of Newsweek sees in Obama the same strength of purpose. I was reminded, however, of a much less heroic sort of story. James Suriowiecki narrates:

In David Mamet’s movie “House of Games,” the grifter played by Joe Mantegna explains to a former mark, “It’s called a confidence game. Why? Because you give me your confidence? No. Because I give you mine.”

Captured, in a New Yorker minute: what makes a master of style and technique boring, shallow and predictable.

“They are all so wonderful”, McEwan said of his family. “I’m so lucky”. He paused, but he couldn’t help himself, and paraphrased a line from Saturday: “It’s now the dominant scientific position, you know, that parents have almost no influence”.

Ian Leslie’s Marbury blog is the one American politics blog I read no matter what. Maybe it’s because he’s British: somehow, he always seems to give me just what I want to know.

Ian’s got a post up at the moment about President Obama’s role as the nation’s confidence booster. As always, he gets it just about right.

Like me, Ian doesn’t want Obama to listen to former Clinton advisers like Mark Penn. Penn’s latest Politico column urges Obama to start talking the talk:

Stop talking the economy and America down with words like “catastrophe,” and talk up how we can come out of this sooner if we all pull together. The president now has to return to the can-do rhetoric of the campaign — that is, the rhetoric of Franklin D. Roosevelt, John F. Kennedy, Ronald Reagan and Clinton — rhetoric that inspires confidence.

I think both Ian and I would prefer some honesty about the situation, instead of Penn’s failed brand of spin. We know we’re in the shit – so don’t start trying to tell us that things are fine.

So, in the dream world in which I advise Obama, I would say: be straight. If the polls are to be believed, it might end up being the best move anyway.

Speaking of the RSA (or the ARSE), as we fondly call it, I see there’s a bit of controversy brewing. Last Thursday, Guido Fawkes claimed that Matthew Taylor was:

ruining a great institution by turning it into just another left-of-centre think-tank – sort of like Demos with a better designed Adam Brothers HQ building

Today, Danny Finkelstein leaps to Matthew’s defence:

I think that Taylor has been a stunning success at the RSA, making it for the first time in many years a compelling organisation.

For my money, and I cannot believe that Guido or the Fink know the current RSA regime even half as well as I do, the truth is somewhere in the middle.

If either of the combatants were to look at concrete examples of RSA work – rather than simply basing their opinions on who’s been speaking there recently – they would be better placed to comment.

I spent much of Saturday and Sunday working on an outline for the second stage of Tomorrow’s Investor, the RSA’s investigation into the murky world of indirect investment. In a previous incarnation, I was responsible for the first stage of the project. This bit is being managed by other people, but I’m going to be writing the final report.

Having spent some time in their company, I’m pretty dubious about the benefit of think-tanks. But this project is serious stuff. I’m really glad to be working on it.

More details to follow. In the meantime, check out Aziz Boghani’s Tomorrow’s Investor blog for news and views.

From Bryan Appleyard’s brilliant profile of Ricky Gervais:

Devotion and guilt … are the key to his character. Because of the age gap, his mother plainly spoilt him — almost as an only child. This indulgence, this marking out as special, plainly links to his confidence bordering on arrogance, and to a potent cocktail of self-love and vanity of a kind often found in creative artists. He can do what he does — shock, tease, wheedle, amaze, irritate — because he is sure that, in the end, his audience will bow to the dictatorship of his imagination.

… I think Sigmund Freud got Ricky Dene Gervais in one. “A man who has been the indisputable favourite of his mother,” he wrote, “keeps for life the feeling of a conqueror, that confidence of his success that often induces real success”.

Reading Montaigne’s essay “On Rewards For Honour” the other day (that’s an early translation, pretty unreadable, but the best I can do) reminded me what I dislike so much about behavioural economics / social psychology. Montaigne says:

If you introduce other advantages and riches into a prize which should be for honour alone, instead of increasing the prestige you prune it back and degrade it.

This is exactly the point made by two of the most commonly (read: interminably) quoted social psychology experiments: the Israeli day-care parents and the Swiss nuclear waste dump residents (at roughly 11.00 in that video). But the way these studies are presented you would think it was the first time anyone had had the idea.

What seems to give behavioural economics this feeing of superiority is its claim to be making these notions “scientific”. Not to put too fine a point on it, but this is bullshit. Behavioural economics is no more scientific than traditional economics: it can’t make accurate predictions either. When it comes to understanding the world, it has no more validity than Montaigne.

You might say: so what? Well, this gets important when – as is increasingly becoming the case – models from social psychology are used to direct policy-making. Its real danger is the way it gives politicians a false sense of legitimacy.

If you’re sitting in Westminster or Washington reading Montaigne, then you’re a figment of my imagination. But say you are – if you are, then you won’t be taking him too seriously. Why would you? After all, he just one one bloke, and this is just his opinion. You are aware that any policies you derive from his writings will be flawed and fallible, so you act cautiously, letting practice guide your theories.

Social psychology experiments – note the scientific language – encourage politicians and civil servants to think in exactly the opposite way. They encourage certainty. And certainty – or faith – is the last thing you want in someone making policy.

The models of behavioural economics – like the models of traditional economics, like Montaigne – are helpful for thinking. But nothing more. When people start taking models too seriously they make serious mistakes. The financial crisis is only the latest proof of that. Intelligent people are heralding behavioural economics as the solution to our woes. When the next crisis comes, it will be of their making.

The New Yorker had an excellent piece recently on Caroline Kennedy, asking why she decided to withdraw from the New York senate race. It makes fascinating reading for anyone interested in confidence.

When [her friends] asked her about her decision to run [Kennedy] looked scared and panicky and couldn’t talk about it. She folded her arms over her chest, a guest recalled, and disappeared into herself—a characteristic gesture.

One could get the impression that Kennedy is low on confidence. But it’s not so simple. In many ways, she has enormous self-belief. After all, this is an author and campaigner who has addressed several Democratic Conventions. And who broke ranks to endorse Barack Obama despite intense pressure from the Clinton campaign. No – there’s something more complicated going on here.

Kennedys don’t like losers, Caroline Kennedy especially. “In the case of the Profiles in Courage awards, she’s made it clear in recent years that she doesn’t always want us to recognize people who are political losers,” John Shattuck, the C.E.O. of the John F. Kennedy Library Foundation, says.

The impression I get from the piece is of a woman who is hard on herself; yet who – and this is the tragedy – is revered by everyone she meets. I say tragedy, because this unusual combination places her in almost impossible position.

Kennedy fears she might be a loser. In order to assuage this fear, she needs the approval of other people. This is presumably why she wanted to run for the Senate in the first place. And why she works to maintain her place in the public eye.

But because it comes so easily, and is in most cases so fraudulent, Kennedy finds the approval of others objectionable, repulsive even. If she was of a different disposition, more easy-going, more accepting of herself she might be able to deal with it. But she is not.

According to one biography, when a few of her brother’s friends spoke fondly of him to reporters, in the wake of his death, they were told they were no longer welcome at his memorial service.

The agony of being famous is that you lose control over your identity. By exercising an extremely tight grip over her friendship group, Kennedy has regained some of that control. To be a politician, she would have to give it up.

But so long as she remains in the public eye, Caroline Kennedy (and all the others like her – one thinks immediately of Princess Diana) will have to endure this horrible Catch-22. On one hand she needs the worship, the acclaim. It is part of her DNA. On the other hand, that very acclaim disgusts her, confirming her view of human weakness. No wonder she loves Obama. He is always cool, never awestruck or needy, as Michelle Cottle notes in a nice piece in TNR.

Obama is an exception – perhaps the one person who can be standofffish with a Kennedy. In the rest of her life? I don’t know her, of course, and have perhaps taken too much from one article. But I would say this: that’s its hard to give up being adored, even if it you know it’s harming you.

President Obama signed his economic stimulus plan yesterday. It’s the most massive recovery package ever seen. And one of its principal aims is the restoration of confidence. As Obama warned last week in his press conference:

Doing a little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss of confidence.

This puts confidence on a par with jobs and income. That might seem odd at first, but it appears to be the general consensus. Certainly according to the entrepreneur Sir David Tang, who writes on the BBC website that “pessimism is the most serious cause of the global economic tsunami”. Even David Brooks agrees.

A contrary view comes from economist Kevin Hassett on Bloomberg News. According to him, confidence – or overconfidence – was the principal cause of the credit crunch. He blames the inflated sense of entitlement felt by the MBAs on Wall Street desk, quoting a study which equated narcissistic traits with leadership potential:

The results of the study had large implications for real-world settings, because “narcissistic leaders tend to have volatile and risky decision- making performance and can be ineffective and potentially destructive leaders”.

It may be that Hassett is referring to a different kind of confidence to Obama and Tang. He’s talking about personal confidence, they’re talking about consumer confidence. But it seems to me there must be a connection – otherwise why use the same word? So who’s right? Is confidence to blame; or is itwhat keeps the economy afloat?

Perhaps – and this is just a thought – both are right. Confidence does drive the global economy. But, like capitalism itself, it is fundamentally volatile. When the going is good, confidence is the rocket fuel of innovation and entrepreneuralism. But it always overreaches, because it is based on a faith in the future that can never be fully realised.

Not evidence for this, but a sign of something: the State Street Index (below) shows a record jump in global confidence in February:

I would ask if the world has gone mad. But I know the answer to that already.