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How did you go bankrupt? Two ways: gradually then suddenly - Ernest Hemingway

Gradual change is hard to manage. It’s difficult to monitor how change is slowly, but consistently, creating significant variations in our environments. Because we overlook slow change, we are shocked when small changes culminate in major catastrophes. In short, we suffer from Shifting Baseline Syndrome.

Shifting Baseline Syndrome (SBS) is an important principle found in ecology. This idea explains how many ecological systems, such as nature conservation, water quality levels, and restoration of wildlife habitats, are destroyed over time.

SBS was developed by Daniel Pauly, a French-born marine biologist who studies human impacts on global fisheries.1 Daniel realized that many fish species were decimated because fishermen behaved with short memories – today never seemed much worse than yesterday. They missed the gradual, yet consistent degradation of the fish population. No one paid attention to the gradual, long-term decline. In the short-run, fish population declines never seemed that great. It was only a little each year. Aggregated over decades, however, and these habitats were entirely destroyed.

SBS applies beyond ecology. SBS influences many areas of our lives. You’ll find this principle matters for relationships, talent development, business, investing, and economic growth. SBS has a big influence on our lives.

We tend to compare any decision or perspective to what we’ve encountered in our own life. We fail to look beyond our own views and examine prior historical experience. We completely miss accumulated change over time, oblivious to the change that has occurred outside of our awareness. We assume what we’ve experienced in our lifetimes has always been “normal.”

The formal definition of SBS:

Shifting baseline syndrome (SBS) describes a gradual change in the accepted norms for the condition of the natural environment due to a lack of human experience, memory and/or knowledge of its past condition.2

Masahi Soga and Kevin Gaston, in their paper, Shifting Baseline Syndrome: Causes, Consequences, and Implications, describe Pauly’s discovery in more detail:

He [Daniel Pauly] pointed out that fishers and marine scientists tend to perceive faunal composition and stock sizes at the beginning of their careers as the unaffected baseline condition against which catch quality change is subsequently judged, and that this is likely to result in a gradual accommodation of the loss of fish species. Thus, a fish species that was widespread and abundant hundreds of years ago may have experienced a large population decline over the period since, but most of the current researchers incorrectly consider that the population status in recent past decades is the appropriate baseline.3

Paul Kedrosky, an investor, entrepreneur, and partner at SK Ventures, describes the importance of SBS:

It is blindness, stupidity, intergeneration data obliviousness. Most scientific disciplines have long timelines of data, but many ecological disciplines don’t. We are forced to rely on second-hand and anecdotal information — we don’t have enough data to know what is normal, so we convince ourselves that this is normal.

But it often isn’t normal. Instead, it is a steadily and insidiously shifting baseline, no different than convincing ourselves that winters have always been this warm, or this snowy. Or convincing ourselves that there have always been this many deer in the forests of eastern North America. Or that current levels of energy consumption per capita in the developed world are normal. All of these are shifting baselines, where our data inadequacy, whether personal or scientific, provides dangerous cover for missing important longer-term changes in the world around us.4

How SBS Affects Our Daily Lives

The real power of SBS is its relevance in so many areas of our lives. SBS goes beyond nature and the environment. It’s everywhere. And the more you look, the more you’ll see its effects.

Politics – we fail to acknowledge how governments erode certain protections, laws, or policies. It’s always done with good intentions, so the public doesn’t push back because it seems innocuous. No single change seems that critical, until you aggregate them over time and you end up with drastic changes in the system, or worse, extreme situations like Totalitarian regimes.

Regulation – new rules are constantly added to address the latest concerns. How can one more rule hurt the system? Because rules add up. Due to the lack of coordination among regulatory bodies, massive rule books are too complicated for anyone to understand. And those that do understand them do so to take advantage of the confusion. The U.S. tax code and banking regulations are prime examples.

Relationships – occurs with both work and family. We forget the little compliments. We fail to be fully present in a conversation. We neglect an anniversary or birthday. We’re too focused on our own tasks. Until one day the other person, whether a spouse or employee, says they’re out. It seems to come out of nowhere, but in reality, it was building up day by day. It was just too gradual to notice until it was too late.

Staying in Shape – we never wake up one morning completely out of shape or overweight. It happens over time. And unless we are ultra-disciplined in our habits, extra pounds add on without us knowing. It’s due to the little decisions - we skip a workout one day. Eat a little more junk food the next. Each change unnoticeable on a day-to-day basis, until one day you can’t fit in your clothes. The change has been happening all along, but each day seemed normal because the change was so small relative to the day before.

Constant Distraction– environments create the pressure to always be on call, always subject to distraction and never able to fully concentrate on productive work. Most of us can’t remember the times before email and social media. Rarely do we notice the degradation in our deep thinking and deep work because of the constant distraction. How can one more email do any damage? Or one more meeting? Or one more tweet? Because it’s one email or one more meeting from many people, which aggregates to a lot of distraction. We stop producing value and focus on just keeping our heads above water. It never seems obvious on any given day, but after many years, you wonder why you’ve accomplished so little.

Skill Acquisition – many experts talk about getting 1% better or worse each day. 1% is hardly noticeable, until in compounds exponentially into something great or something terrible. On a daily basis, however, 1% seems unremarkable, almost mundane. But if we’re not diligent, we’ll end up on the wrong end of the 1%.

Investing – SBS is a major issue for investors. First, we neglect the lessons of the past. We only consider our own experience and base everything off of what we’ve personally witnessed. But our experience is a small fraction in the history of the markets and economies. Our own knowledge base is built on a narrow, fragile foundation. We think our ten or twenty or thirty years of experience is somehow extra special. It’s not. We need to go farther back and really understand the lessons of history.

We also become so focused on the day-to-day that we’re unprepared for the growing, gradual, but not quite obvious threats. Inflation, for instance, has been held in check for U.S. investors for a few decades - so investors routinely dismiss the thought of high inflation. But if you pay attention to the growing fiscal deficits and debt levels, any student of financial history will see concerns that can’t be neglected.

How do we counter SBS?

Study History

We overly focus on the short-term, overweighting our own experience and underweighting the experience of history. There’s tremendous power in building a deeper understanding by learning from history. Not everything will be relevant to today, but most lessons will. The major forces that effect people and economies have not changed. It’s simply inexcusable to repeat the mistakes of the past, when the lessons are sitting out there ready for us to learn. But you need to have the desire to do this. There’s nothing natural about looking back and learning when there is so much to do today.

With investing for example, we have tremendous data going back a century or more, across many different countries and economic regimes. So the problem isn’t a lack of data. The problem is we don’t use what’s already widely available. We’re so focused on the present, we neglect the knowledge of the past. We’re operating with no foundation – we think today is normal, but it only seems normal because we have no other comparable. You can change that, if you put the work in and open your mind to the past.

Track Metrics

The often overused saying of what gets measured gets managed is true. Measuring and tracking our core activities and priorities provides a consistent and disciplined way to uncover SBS creeping into our lives. It defeats our tendency to bullshit ourselves and convince us that we are on track. It’s not always comforting to see the numbers, but they don’t lie. And it forces us to confront reality, rather than hope things will work out fine.

Step Back and Assess: Get Out of the Daily Noise

The last idea is to step back from the day-to-day stress and gain better perspective on our lives. We often don’t stop to think, especially about our long-term priorities and their current state. It’s a chance to step back and see the change. You can’t do that when you’re consistently focused on the current issues. Just focusing on one area, like relationships, and honestly evaluating your status??? can bring incredible understanding and improvement in your life.

We normalize our perceptions because it’s the path of least resistance. It’s hard to keep track of prior states and track change in all the different areas in our lives – family, career, etc. If we’re serious about improving our understanding of the world, deliberately track and assess these areas. You can’t do it for everything, but just improving on a few areas will lead to radical improvement.5

Curiosity is an underappreciated skillset. We don’t ask why enough times. We just go with how everything is going and don’t ask questions. Sometimes we don’t want to create an issue, sometimes we are too busy, and sometimes we don’t want to know the truth. But curiosity drives learning, and learning creates a better life.

When you understand shifting baseline syndrome it forces you to continually ask what is normal. Is this? Was that? And, at least as importantly, it asks how we "know" that it's normal. Because, if it isn't, we need to stop shifting the baselines and do something about it before it's too late. Edge.org

The final piece of advice comes from Harvard Business School professor and author Clayton Christensen. Clayton explains how the little decisions often come with no warning signs. It’s up to us to remain vigilant and not neglect the small but important decisions:

The problem is, life seldom works that way. It comes with no warning signs. Instead, most of us will face a series of small, everyday decisions that rarely seem like they have high stakes attached. But over time, they can play out far more dramatically.7

Sources:

1. https://en.wikipedia.org/wiki/Daniel_Pauly

2. Masahi Soga and Kevin Gaston. Shifting Baseline Syndrome: Causes, Consequences, and Implications

3. Masahi Soga and Kevin Gaston. Shifting Baseline Syndrome: Causes, Consequences, and Implications

4. Paul Kedrosky. https://www.edge.org/response-detail/10755

5. Daniel Pauly and George Monbiot. https://oceana.org/blog/daniel-pauly-and-george-monbiot-conversation-about-shifting-baselines-syndrome

6. Paul Kedrosky. https://www.edge.org/response-detail/10755

7. Clayton M. Christensen, James Allworth, and Karen Dillon. How Will You Measure Your Life?