Why the Obsession with W and L?

Life is about living, not about taking stock

Photo by Kenny Eliason on Unsplash

Once, when I was in my twenties, I was at a party in Sacramento when I found myself in conversation with two guys my age who persisted in a particular shtick: no matter what you said about yourself or others you knew, they would ask “Oh, is that bad?” Or, alternately, “Oh, is that good?”

Me: “I’m working on getting my PhD in Economics.”

Them: “Oh, is that good?”

Me: “My girlfriend ate at In-n-Out Burger yesterday.”

Them: “Oh, is that bad?”

Of course, it was just a geeky ploy to avoid having to say anything substantive. But the only reason they could get away with this sort of shtick at all was that it mimicked something most of us do all day long—both in conversation with others and inside our own heads. We attempt to label everything in life as a win (“W”) or loss (“L”).

Taking stock

The truth is we humans constantly evaluate, seeking to sum up our lives and the lives of others as if we’re trying to bring them all to a tidy ending. I call this activity taking stock. What we’re doing when we take stock is take the incredibly complex and nuanced business of life and cook it down, reducing it absurdly, until what’s left can be siphoned off into two buckets—one with a W and one with an L. We do this so that we can easily tally things up—and we do that because seeing that we have a large tally of Ws and not so many Ls provides a sort of satisfaction.

This is essentially the satisfaction a miser gets from counting his money. In fact, the activity of counting Ws and Ls and that of counting money are more or less the same thing. They are both cold, hard accounting. And if you love accounting, I won’t begrudge you this pleasure. But from my perspective—economist here, not an accountant!—it seems a pretty wan form of satisfaction.

Stocks versus flows

If taking stock consists of reducing life to Ws and Ls, then we need an appropriate term to describe the opposite: enjoying life in its full splendor and messiness as it happens. Let’s refer to this as experiencing the flows.

Stocks and flows are economic terms. In economic parlance, the term stock is used when talking about capital. Capital is not just money, of course: it’s anything that is a durable store of value. It’s your personal possessions. It’s your intelligence. It’s your health. It’s anything that you can put in a vault or on a shelf or otherwise set aside knowing that it will be there for you, continuing to keep its value—after you’ve accounted for depreciation, of course. You can count your stocks of capital at any time to get a measure of what’s yours. Your banking app can tell you how much money you have in savings. Your Apple Watch can tell you your cardio fitness level.

The term flows is used—again in economic parlance—to describe the benefits over time that come from the use of capital. Money, for example, can generate flows of interest if saved and flows of food, clothing, and entertainment if spent. Other stocks of capital have their own corresponding flows.

Beyond being something that you possess and can take stock of, capital is of little use unless you use it to create flows.

Examples abound. Going out for a run on a winter’s day utilizes your stock of fitness. Having a conversation with a friend utilizes your personality and theirs, as well as the capital you’ve invested in your relationship. Enjoying a poem or a symphony or a sunny day in the mountains utilizes the capital you have in your senses and in just being alive. The pleasure in life is in doing things with what you’ve got. In other words, it’s in the flows, not the stocks that generate them.

Why not W and L?

OK, you say. I get it. But why can’t I go through life both enjoying the moments and tagging all those moments with a W or L? The answer is that there’s a tradeoff between those two activities. People have limited attention, and if you’re constantly focused on the Ws and Ls then you are not paying attention to the wonder of what’s happening right now wherever you are. This ultimately robs you of a certain amount of your experience of life.¹

As I said, life is incredibly complex and nuanced. There’s really so much more there than can be summed up in a W or L. Inevitably we must make a choice as to whether we want to focus on the reduced version of life or see the fuller, messier picture.

Moreover, the whole idea of assigning a W or L to each of life’s moments is wrong-headed for the simple reason that life continues. When you evaluate your experiences, saying, “I’ve had a good day” or “I’ve had a bad day,” part of what you’re saying is: “It’s a wrap!” But it’s not a wrap. Your experiences are not over. Why, you have another day coming up tomorrow!

Of course, none of us will live forever… does this mean that someday it will be a wrap? No. All of us have influenced people—our children, our grandchildren, those we’ve mentored, even those we’ve casually encountered. We leave our imprint on all of them. In a very real sense, what we begin is continued through them. It would be premature to declare a W or L when what you started is, in some form, being carried on by other people.

That things continue means that nothing is ever closed for good. Think of the times when you thought something was over—a friendship, a business deal, even a ballgame—and then, after you’d completely given up on it, it returned from the dead! You never know for sure what’s going to happen: as long as something continues, it’s still in play.

The continuation value

If life is about continuation, then we need something appropriate to replace all those Ws and Ls. Let me suggest a concept drawn from economics - the continuation value. In the dynamic models used in economic theory, the continuation value is a sort of score that embodies everything that a person brings with them into the next period of the model. There’s no such thing as a “good” or “bad” continuation value; the continuation value just is what it is. Think of it as a readout that tells you what you start the next day with: all those things you’ve got that you can draw upon to make the most of tomorrow. Whereas a W says “Good job!” and an L says “Bad job!”, the continuation value just says: “Here you go… Have at it!” If what you care about is life’s flows, then the continuation value is really the only kind of stock you ever need to take.

The continuation value is really about a state of mind. If you use the amount of money you see in your banking app or your cardio fitness level on your Apple Watch to tell you, “OK, here’s what you’ve got… Have at it!” then they are your continuation value. If instead you look at these metrics and ask yourself, “Is that good?” or “Is that bad?” then you’ve gone over to taking stock. So having metrics at your fingertips is not necessarily a problem. For me, I find it’s a question of discipline: I need to remind myself that the metrics are there for me to make the most of my day, not to divert me to thoughts about Ws and Ls.

A life well-lived is about keeping yourself in the flows. If you remember that, you’re in for a great adventure. Even if you venture into a party in Sacramento.

1. I wrote in an earlier post about how focusing our attention on optimizing—what economists say we should be doing all the time—dulls life’s beauty and mystery.