CFI Blog

Monkey Brain Takes a Placebo

“I said that the monkey brain cure itself is a certain leaf, but in addition to the drug there is a certain charm, which if someone chants when he makes use of it, the medicine altogether restores him to health, but without the charm, there is no profit from the leaf.”

When I was a little kid, a hug from my Mom could cure anything.

I could have scraped my knee, had my feelings hurt, bumped my head, or been run over by a car, and running to Mom would make it better.

OK, I might not have been cured had I been run over by a car.

Was there a magical drug in the warmth of my mother’s embrace or something secreted on her lips when she kissed my head that blocked all pain transmitters in my little head?


The mere act of my mother telling me everything was going to be all right made everything all right.

Any parent knows of this magical incantation. Most of the time, it works just as well as running and getting an aspirin and having your child take it.

What causes this miraculous cure?

It’s called the placebo effect, and it’s great when you use it to cure yourself.

However, when you use it in your financial life, it can be dangerous.


Read on, and let’s find out.

First, though, let’s explore the placebo effect and how it spurs on the body’s great self-healing factory.

Placebos running through your system

We define a placebo as an inert treatment on the body that causes restoration anyway. The actual placebo that we take has absolutely no physical impact on the body, but because of what happens inside of Monkey Brain, what I call our limbic system, we manage to get better anyway.

As Cambridge’s Dr. Nicholas Humphrey explains, a placebo is effective under the following conditions:

  • You’re aware that you’re receiving treatment
  • You believe that the treatment will work (for example, branded aspirin works on people better than generic aspirin)
  • Because of this belief, you expect that, as a result of the treatment, you will get better, and
  • The expectation that you have accelerates your own ability to self-cure, creating a self-fulfilling prophecy

Placebos can’t cure everything, but where the capacity for the human body to cure itself exists, then placebos have the ability to trigger that mechanism.

However, in some cases, we need an external stimulus to start the healing process, because there are some instances where we actually need to be sick.

Let’s take a banal case. You and your friends decide to go celebrate someone’s birthday one Friday evening. The local bar is offering a great happy hour special: $1 drafts. You haven’t gone out with the buds in a long time, and, hey, $1 beer! $5 later, and the room starts spinning.

At this point, you probably want to go visit the porcelain throne. Vomiting is the body’s reaction to get rid of the toxins that you’ve just flooded it with. But, yakking isn’t pleasant, so you try to fight the urge. You stagger over to the 24 hour pharmacy and buy some Pepto Bismol to settle your stomach.

It works. You’ve eliminated the body’s reaction. But, it comes at a cost. Now, your liver has to process all of that alcohol, and you have the MOAH* in the morning.

*MOAH: Mother of All Hangovers

The same holds with fevers. It’s usually the body’s way of cooking a virus or bacteria. If we take something to suppress the fever, we are doing the bacterial equivalent of turning up the Barry White LP and encouraging a little activity.

But, in many cases, we are better off feeling better, and sometimes, all it takes is a little priming of the body’s self-healing pump to get that going.

Part of the reason that placebos work is because of hope. When we have hope, then we can let down our defenses a little, and allow the body to work its magic.

Allow me to digress with a story.

When I was a young lieutenant, shortly after I arrived in Germany, I was told that I was going to deploy to Bosnia. The sides involved in the internecine conflict had just signed the Dayton Peace Accords, and NATO was going in to physically separate the sides and ensure peace. As such, nobody had defined what “peace” looked like and when we could say that we were done ensuring peace.

I didn’t ask, since you didn’t ask those things as a young lieutenant, but I had no idea how long I was going to be in Bosnia. Our unit was one of the physically closest units to the area, so we were being deployed first. The planners would figure out rotations and strategy later, but the immediate mission was to get as many units into the theater as possible and then figure things out.

Because of that, I had to mentally adjust to what I projected to be an indefinite period of time deployed. I deployed in February, 1996, and it wasn’t until August of that year that we found out when we’d be heading home – in late September. For seven months, I simply assumed I’d stay there almost ad infinitum. Fortunately, it was low intensity conflict, so while it wasn’t as pleasant as being on vacation or even the day-to-day life that we normally have, it wasn’t terrible.

The adjustment to that mentality of a presumed indefinite deployment wasn’t as bad for me as it was for some of my soldiers. I had a couple of soldiers who had real difficulty adapting, particularly as life there was, effectively, a 3 week cycle of groundhog day with no break and no end in sight.

This was the same conundrum faced by Allied bomber pilots in World War II. As Dr. Shlomo Breznitz describes, the mortality rate amongst the bomber pilots running missions over Germany was high, and morale was exceptionally low. The reason that morale was low wasn’t just because the pilots were dying by the score, but also because they didn’t know when their work would end. Once the Army Air Corps set a limit of forty missions before a pilot went home, morale improved dramatically, because the pilots knew that forty was an achievable milestone, and once they had survived the fortieth mission, they were no longer going to be exposed to the danger. The cap of forty gave pilots hope, much as surviving a yearlong tour of duty in Vietnam was a goal of draftees. It’s a lesson, unfortunately, that seems to have been lost on the modern day military.

Thus, when provided with hope, the body allows itself to self-heal, whether psychologically or physically. This is when placebos work.

Who, though, can give you hope?

As Dr. Humphrey explains in the aforementioned article, there are three cases in which you acquire hope:

  1. You experience it yourself
  2. You can arrive at the conclusion by rational argument, or
  3. Someone you believe and respect tells you so

Why do you think that doctors’ offices are lined with diplomas? Those diplomas convey authority and respect, increasing the placebo effect of their treatments.

The determination of when to kick-start the body’s placebo effect comes down to one question: “Will my future be better off if I’m healed more quickly than if I’m not?”

That’s why hope and knowing the duration of your suffering are key. Sprain an ankle running after dinner, and you can afford to stop and let the ankle heal. Sprain an ankle while running away from a lion, and die if you stop.

Placebos and your wallet

While we think of the placebo effect with regards to physical well-being, it is just as pertinent when describing psychological well-being. A commonly cited placebo effect is the release of endorphins by the body to fight off depression or to reduce stress.

Naturally, one of the biggest psychological stressors in our lives revolves around money. 76% of people in an American Psychological Association survey stated that money was the top stressor in their lives.

Monkey Brain doesn’t like pain, physical or psychological, and will do darn near anything he can to reduce that pain.

Except, of course, deny himself pleasure.

That’s where the danger of the placebo effect kicks in.

In the conclusion of this two-part series, we’ll examine how the placebo effect can make your wallet even sicker. Click here to read it.

Author Profile

John Davis
John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.

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