I am, by nature, an optimist. I almost always think things will turn out well, and even when they break I am confident that I can fix them. My optimism, however, has not always served me well. Twice I have been hit by cars while cycling— full-on, through-the-windshield impacts that were entirely the result of my blissful attitude that the street corners I had successfully negotiated hundreds of times before would not suddenly materialize an automobile in my path. Such high-impact, unpredictable and rare events are what author Nassim Nicholas Taleb calls “black swans.” Given enough time, no upward sloping trend line is immune from dramatic collapse.

A bike crash as a black swan is, in fact, an apt metaphor for what the investigative journalist and natural-born skeptic Barbara Ehrenreich believes happened to America as a result of the positive-thinking movement. In her engaging and tightly reasoned book Bright-Sided (order on DVD Ehrenreich’s lecture at Caltech), she shows how the positive-psychology movement was born in the halcyon days of the 1990s when the economy was soaring, housing prices were skyrocketing, and positive-thinking gurus were cashing in on the motivation business. Academic psychologists, armed with a veneer of scientific jargon, wanted in on the action.

The shallow bafflegab of such positive-thinking pioneers as Norman Vincent Peale (The Power of Positive Thinking, 1952) and Napoleon Hill (Think and Grow Rich, 1960) or the “prosperity gospel” preachings of such contemporary “pastorpreneurs” as Frederick “Reverend Ike” Eikerenkoetter, Robert Schuller and Joel Osteen are predictably data-light and anecdote-heavy. But one expects better of respected experimental psychologists such as Martin E. P. Seligman, who almost singlehandedly launched the positive-psychology movement in academia that is, according to the Positive Psychology Center website, “the scientific study of the strengths and virtues that enable individuals and communities to thrive.” Ehrenreich systematically deconstructs—and then demolishes—what little science there is behind the positive psychology movement and the allegedly salubrious effects of positive thinking. Evidence is thin. Statistical significance levels are narrow. What few robust findings there are often prove to be either nonreplicable or contradicted by later research. And correlations (between, say, happiness and health) are not causations. Seligman and his colleagues drank the positive-thinking Kool-Aid, Ehrenreich shows, but she provides the antidote.

Take Seligman’s “happiness equation” (physics envy lives!): H = S + C + V (Happiness = your Set range + the Circumstances of your life + the factors under your Voluntary control). As Ehrenreich notes, “if you’re going to add these things up you will have to have the same units [of measurement] for H (happy thoughts per day?) as for V, S, and C.” When she confronted Seligman with this problem in an interview, “his face twisted into a scowl, and he told me that I didn’t understand ‘beta weighting’ and should go home and Google it.” She did, “finding that ‘beta weights’ are the coefficients of the ‘predictors’ in a regression equation used to find statistical correlations between variables. But Seligman had presented his formula as an ordinary equation, like E = mc², not as an oversimplified regression analysis, leaving himself open to literal-minded questions like: How do we know H is a simple sum of the variables, rather than some more complicated relationship, possibly involving ‘second order’ effects such as CV, or C times V?” We don’t know, thereby rendering the equation nothing more than a slogan gussied up in math.

Isn’t positive thinking better than negative thinking? All other things being equal, sure, but the alternative to being either an optimist or a pessimist is to be a realist. “Human intellectual progress, such as it has been, results from our long struggle to see things ‘as they are,’ or in the most universally comprehensible way, and not as projections of our own emotions,” Ehrenreich concludes. “What we call the Enlightenment and hold on to only tenuously, by our fingernails, is the slow-dawning understanding that the world is unfolding according to its own inner algorithms of cause and effect, probability and chance, without any regard for human feelings.”

Feelings matter, of course, but the first principle of skepticism is not to fool ourselves, and feelings—both positive and negative—too often trump reason. In the end, reality must take precedence over fantasy, regardless of how it makes us feel.

Humans are, by nature, tribal and never more so than in politics. In the culture wars we all know the tribal stereotypes of what liberals think of conservatives: Conservatives are a bunch of Hummer-driving, meat-eating, gun-toting, hard-drinking, Bible-thumping, black-and-white- thinking, fist-pounding, shoe-stomping, morally hypocritical blowhards. And what conservatives think of liberals: Liberals are a bunch of hybrid-driving, tofu-eating, tree-hugging, whale-saving, sandal-wearing, bottled-water-drinking, ACLU-supporting, flip-flopping, wishy-washy, namby-pamby bed wetters.

Like many other stereotypes, each of these contains an element of truth that reflects an emphasis on different moral values. Jonathan Haidt, who is a psychologist at the University of Virginia, explains such stereotypes in terms of his Moral Foundations Theory (see www.moralfoundations.org), which he developed “to understand why morality varies so much across cultures yet still shows so many similarities and recurrent themes.” Haidt proposes that the foundations of our sense of right and wrong rest within “five innate and universally available psychological systems” that might be summarized as follows:

1. Harm/care: Evolved mammalian attachment systems mean we can feel the pain of others, giving rise to the virtues of kindness, gentleness and nurturance.
2. Fairness/reciprocity: Evolved reciprocal altruism generates a sense of justice.
3. Ingroup/loyalty: Evolved in-group tribalism leads to patriotism.
4. Authority/respect: Evolved hierarchical social structures translate to respect for authority and tradition.
5. Purity/sanctity: Evolved emotion of disgust related to disease and contamination underlies our sense of bodily purity.

Over the years Haidt and his University of Virginia colleague Jesse Graham have surveyed the moral opinions of more than 110,000 people from dozens of countries and have found this consistent difference: self-reported liberals are high on 1 and 2 (harm/ care and fairness/reciprocity) but are low on 3, 4 and 5 (in-group loyalty, authority/respect and purity/sanctity), whereas self-reported conservatives are roughly equal on all five dimensions, although they place slightly less emphasis on 1 and 2 than liberals do. (Take the survey yourself at www.yourmorals.org.)

Instead of viewing the left and the right as either inherently correct or wrong, a more scientific approach is to recognize that liberals and conservatives emphasize different moral values. My favorite example of these differences is dramatized in the 1992 film A Few Good Men. In the courtroom ending, Jack Nicholson’s conservative marine Colonel Nathan R. Jessup is being cross-examined by Tom Cruise’s liberal navy Lieutenant Daniel Kaffee, who is defending two marines accused of accidentally killing a fellow soldier. Kaffee thinks that Jessup ordered a “code red,” an off-the-books command to rough up a disloyal marine trainee in need of discipline and that matters got tragically out of hand. Kaffee wants individual justice for his clients. Jessup wants freedom and security for the nation even at the cost of individual liberty, as he explains:

“Son, we live in a world that has walls. And those walls have to be guarded by men with guns…. You don’t want the truth because deep down, in places you don’t talk about at parties, you want me on that wall. You need me on that wall. We use words like honor, code, loyalty. We use these words as the backbone to a life spent defending something. You use ’em as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom I provide, then questions the manner in which I provide it.”

Personally, I tend more toward the liberal emphasis on individual fairness, justice and liberty, and I worry that overemphasis on group loyalty will trigger our inner xenophobias. But evolutionary psychology reveals just how deep our tribal instincts are and why good fences make good neighbors. And I know that ever since 9/11, I am especially grateful to all the brave soldiers on those walls who have allowed us to sleep under a blanket of freedom.

Since 99 percent our evolutionary history was spent as hunter-gatherers living in small bands of a few dozen to a few hundred people, we evolved a psychology not always well equipped to reason our way around the modern world. What may seem like irrational behavior today may have actually been rational a hundred thousand years ago. Without an evolutionary perspective, the assumptions of Homo economicus — that “Economic Man” is rational, self-maximizing, and efficient in making choices — make no sense. Take economic profit versus psychological fairness as an example.

Behavioral economists employ an experimental procedure called the Ultimatum Game. It goes something like this. You are given $100 to split between yourself and your game partner. Whatever division of the money you propose, if your partner accepts it, you are both richer by that amount. How much should you offer? Why not suggest a $90-$10 split? If your game partner is a rational self-interested money-maximizer he isn’t going to turn down a free ten bucks, is he? He is. Research shows that proposals that deviate much beyond a $70–$30 split are usually rejected.

Why? Because they aren’t fair. Says who? Says the moral emotion of “reciprocal altruism,” which evolved over the Paleolithic eons to demand fairness on the part of our potential exchange partners. “I’ll scratch your back if you’ll scratch mine” only works if I know you will respond with something approaching parity. The moral sense of fairness is hardwired into our brains and is an emotion shared by most people and primates tested for it. Thousands of experimental trials with subjects from Western countries have consistently revealed a sense of injustice at low-ball offers. Further, we now have a sizable body of data from peoples in non-Western cultures around the world, including those living close to how our Paleolithic ancestors lived, and although their responses vary more than modern peoples living in market economies do, they still show a strong aversion to unfairness.

The deeper evolution of this can be seen in the behavior of our primate cousins. In studies with both chimpanzees and capuchin monkeys, the Emory University primatologists Frans deWaal and Sarah Brosnan found that when two individuals work together on a task for which only one is rewarded with a desired food, if the reward recipient does not share that food with his task partner, the partner will refuse to participate in future tasks and expresses emotions that are clearly meant to convey displeasure at the injustice. In another experiment in which two capuchin monkeys were trained to exchange a granite stone for a cucumber slice, they made the trade 95 percent of the time. But if one monkey received a grape instead — a delicacy capuchins greatly prefer over cucumbers — the other monkey cooperated only 60 percent of the time, sometimes even refusing the cucumber slice altogether. In a third condition in which one monkey received a grape without even having to swap a granite stone for it, the other monkey cooperated only 20 percent of the time, and in several instances became so outraged at the inequity of the outcome that they heaved the cucumber slice back at the human experimenters!

Such results suggest that all primates, including us, evolved a sense of justice, a moral emotion that signals to the individual that an exchange was fair or unfair. Fairness evolved as a stable strategy for maintaining social harmony in our ancestors’ small bands, where cooperation was reinforced and became the rule while freeloading was punished and became the exception. Apparently irrational economic choices today — such as turning down a free $10 with a sense of righteous injustice — were at one time rational when seen through the lens of evolution.

Just as it is a myth that evolution is driven solely by “selfish genes” and that organisms are exclusively greedy, selfish, and competitive, it is a myth that the economy is driven by people who are exclusively greedy, selfish, and competitive. The fact is, we are both selfish and selfless, cooperative and competitive. There exists in both life and economies mutual struggle and mutual aid. In the main, however, the balance in our nature is heavily on the side of good over evil. Markets are moral and modern economies are founded on our virtuous nature. The Gordon Gekko “Greed is Good” model of business is the exception and the Google Guys “Don’t Be Evil” model of business is the rule. If this were not the case market capitalism would have imploded long ago.

Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have. How irrational is that?

This result is one among thousands of experiments in behavioral economics, neuroeconomics and evolutionary economics conclusively demonstrating that we are every bit as irrational when it comes to money as we are in most other aspects of our lives. In this case, relative social ranking trumps absolute financial status. Here’s a related thought experiment. Would you rather be A or B?

A is waiting in line at a movie theater. When he gets to the ticket window, he is told that as he is the 100,000th customer of the theater, he has just won $100.

B is waiting in line at a different theater. The man in front of him wins $1,000 for being the 1-millionth customer of the theater. Mr. B wins $150.

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Amazingly, most people said that they would prefer to be A. In other words, they would rather forgo $50 in order to alleviate the feeling of regret that comes with not winning the thousand bucks. Essentially, they were willing to pay $50 for regret therapy.

Regret falls under a psychological effect known as loss aversion. Research shows that before we risk an investment, we need to feel assured that the potential gain is twice what the possible loss might be because a loss feels twice as bad as a gain feels good. That’s weird and irrational, but it’s the way it is.

Human as it sounds, loss aversion appears to be a trait we’ve inherited genetically because it is found in other primates, such as capuchin monkeys. In a 2006 experiment, these small primates were given 12 tokens that they were allowed to trade with the experimenters for either apple slices or grapes. In a preliminary trial, the monkeys were given the opportunity to trade tokens with one experimenter for a grape and with another experimenter for apple slices. One capuchin monkey in the experiment, for example, traded seven tokens for grapes and five tokens for apple slices. A baseline like this was established for each monkey so that the scientists knew each monkey’s preferences.

The experimenters then changed the conditions. In a second trial, the monkeys were given additional tokens to trade for food, only to discover that the price of one of the food items had doubled. According to the law of supply and demand, the monkeys should now purchase more of the relatively cheap food and less of the relatively expensive food, and that is precisely what they did. So far, so rational. But in another trial in which the experimental conditions were manipulated in such a way that the monkeys had a choice of a 50% chance of a bonus or a 50% chance of a loss, the monkeys were twice as averse to the loss as they were motivated by the gain.

Remarkable! Monkeys show the same sensitivity to changes in supply and demand and prices as people do, as well as displaying one of the most powerful effects in all of human behavior: loss aversion. It is extremely unlikely that this common trait would have evolved independently and in parallel between multiple primate species at different times and different places around the world. Instead, there is an early evolutionary origin for such preferences and biases, and these traits evolved in a common ancestor to monkeys, apes and humans and was then passed down through the generations.

If there are behavioral analogies between humans and other primates, the underlying brain mechanism driving the choice preferences most certainly dates back to a common ancestor more than 10 million years ago. Think about that: Millions of years ago, the psychology of relative social ranking, supply and demand and economic loss aversion evolved in the earliest primate traders.

This research goes a long way toward debunking one of the biggest myths in all of psychology and economics, known as “Homo economicus.” This is the theory that “economic man” is rational, self-maximizing and efficient in making choices. But why should this be so? Given what we now know about how irrational and emotional people are in all other aspects of life, why would we suddenly become rational and logical when shopping or investing?

Consider one more experimental example to prove the point: the ultimatum game. You are given $100 to split between yourself and your game partner. Whatever division of the money you propose, if your partner accepts it, you each get to keep your share. If, however, your partner rejects it, neither of you gets any money.

How much should you offer? Why not suggest a $90-$10 split? If your game partner is a rational, self-interested money-maximizer — the very embodiment of Homo economicus — he isn’t going to turn down a free 10 bucks, is he? He is. Research shows that proposals that offer much less than a $70-$30 split are usually rejected.

Why? Because they aren’t fair. Says who? Says the moral emotion of “reciprocal altruism,” which evolved over the Paleolithic eons to demand fairness on the part of our potential exchange partners. “I’ll scratch your back if you’ll scratch mine” only works if I know you will respond with something approaching parity. The moral sense of fairness is hard-wired into our brains and is an emotion shared by most people and primates tested for it, including people from non-Western cultures and those living close to how our Paleolithic ancestors lived.

When it comes to money, as in most other aspects of life, reason and rationality are trumped by emotions and feelings.

This opinion editorial was originally published in the Los Angeles Times.