The past wasn't as good as you remember

In October 2024, Morgan Housel published A Message From the Past (Thoughts on Nostalgia) on the Collaborative Fund blog. It opens with a Russian saying: “The past is more unpredictable than the future.” Two passages from it carry most of the argument.

“When thinking about our own lives, we don’t remember how we actually felt in the past; We remember how we think we should have felt, given what we know today.”

Housel’s point is about hindsight. Looking back, you already know how the story ends. The worries of the time fade, because each one was resolved one way or another. What felt uncertain then looks obvious now.

§Nostalgia for the hard years

His examples come from economic history. People remember 2009 as a time when homes were cheap. They were cheap, he writes, “because unemployment was 10% and the stock market was down 50%.” The 1950s look calm in memory, yet the decade lived with the constant risk of nuclear war. “Today, we know the missile was never launched.”

The same effect works on the present, in the other direction. We know how the past ended. We don’t know how today ends, so today’s risks look larger than yesterday’s did. Housel quotes Thomas Jefferson on the price of that: “How much pain have cost us the evils which have never happened.”

The present isn’t as bad as you think.

A difficult year often becomes, in memory, the year things started to work. Housel calls the conclusion the most important lesson in economic history, one that holds “for most people most of the time”.

“The past wasn’t as good as you remember. The present isn’t as bad as you think. The future will be better than you anticipate.”