WHO DAT?

It's often tough to remember "who said what -when?".

Sometimes it keeps a marriage together just because of the time required in trying to arrive at a mutually satisfying answer.

Recently I was pondering the source of the saying "neither a borrower nor lender be." The question came to mind as I was researching a future blog on "payday loans.".

I turned to my Bible first. There were various references to both "lender" and "borower" in Proverbs, Leviticus, and Ezekial - among others - but nothing to completely correspond with the above phrase.

I did find various references to "usury" which will be the subject of the future blog.

More research allowed me to discover - or re-discover - the saying  actually came from the first act of Shakespeares play, Hamlet, when Polonius is giving advice to his son Laertes as the latter prepares to leave for university in Paris.

Often, the most familar quotes with which we have become familiar over time come either from Shakespeare, and/or directly or indirectly, the Bible. One suspects the playwright occasionally referenced the Bible as a sort of cliffnotes resource for some of his ingenious plots and dialogues.

The Shakespeare quote regarding borrowing and lending attracted the attention of  a couple of  psychologists who investigated the logic of the advice and the "wisdom" of lending money to a friend. They surveyed  971 persons who described their experiences as either lenders or borrowers.

The unearthing of the so-called "phenomena" accompaning unpaid personal loans came down to what the researchers referred to as "blind spots", or a "mental malfeasance".

In street terms:  It means why we have a tendency to "stiff" someone by allowing ourselves to conveniently forget that we owe them money.

Forgetting things that are inconvenient for us is a common stress reduction tool.

We have addressed this defense mechanism in previous blogs via the term "homeostasis" - an internal healing system or equilibrium employed by us to recover from an often tragic or significant emotional event.

Apparently it's also not a new business trend either. Benjamin Franklin was once quoted as saying, "Creditors have better memories than debtors."

Because the researchers limited their study of the transactions and the principals involved to that of "loans" between friends, they concluded, similar to the fatherly advice of Polonius; "before borrowing money from a friend you need to determine which you need most".

It's amazing how the mind plays such a strong part in how we perceive the act of borrowing from a friend in a non-written contractual loan.

Here's our "Readers Digest" version of the study results.

The creditors were very upset about the unpaid loans, felt that even one missed payment probably meant the loan would never be repaid, but concluded the borrowers were feeling very guilty.

These conclusions were not necessarily shared by the delinquent borrowing "friend', many of whom were more likely to report some guilt but also strangely, relieved and happy.

Many borrowers stated they thought the loan was the lenders idea, reported far fewer delinquent loans than creditors, (as per Franklin) and, partly because they thought they would eventually pay the loan off, were often unconcerned about the unpaid loans.

Why the difference? Because of the "blind spot" of the borrowers who fail to pick up on the misery, anger, and disappointment of the lenders.

The researchers concluded "there is almost universal failure to write out a contract stating the expectations 'between the two friends' and - with no record, the self-serving bias can sort of prosper because there is no record of the terms of the loan or how much has been repaid."

So, in conclusion, the wife reporting that you had a phone call from a somewhat upset lender friend can often provoke the reaction, "Who Dat?"

Source: A study entitled "Lenders Blind Trust and Borrowers' Blind Spots" : A Descriptive Investigation of Personal Loans. (Journal of Economic Psychology.)