A few years ago, I read the account of a woman, Sue, whose teenage step-daughter Sandy became out of hand:
[Sandy] began to lie, borrowed money without returning it; she sneaked into Sue’s bedreoom, went through drawers, and stole Sue’s personal items; she left the kitchen messy, etc. All these actions effectively got Sue’s goat because she told herself, “Sandy shouldn’t act so sneaky. She’s crazy! It’s unfair!” 
But Sue was in error: Sandy should do bad things.
What “should” means
Was Sandy’s behaviour wicked and self-destructive? Yes. But is she a teenage girl? One whose parents are no longer together? Yes. I don’t mean that accepting the negative parts of her nature is what’s best for her, but when we say “Sandy shouldn’t act so sneaky,” we’re expressing an expectation which is contrary to her nature, her character, and our experience.
I find that “should statements” usually come out this way, and they are a recipe for disappointment, one which ensures that our behaviour shall be out of step and less effective than we want.
What “had better” means
Therefore, when I find myself in circumstances like Sue’s, I express myself with the phrase “had better.”
E.g. “Sandy had better change her ways.” I.e. it is in Sandy’s best interest but perhaps not what I expect from her.
Turning it on myself
Using the phrase “had better” can serve as a reminder of what’s positive, whereas “should” in the same context can emphasize the negative.
For example, when I tell myself, “I should get up earlier in the morning,” I focus on the idea that I or others will judge me negatively if I fail to live up to the mark; if I tell myself, “I had better get up earlier,” I explicitly say that here is a way to have things better for me.
I still use the word “should,” but now I use it either as the past tense of “shall” or to express an expectation which I truly anticipate (not just a burden of expectation to lay upon myself or others). E.g. “I should arrive at my destination in another five minutes” or “This code correction should make my application run.”
 Burns, David D., Feeling Good: The New Mood Therapy. William Morrow and Company, Inc. New York: 1980. p. 158
Interesting viewpoint, Markham. I would say that the difference between “should” (as used by Sue) and “had better” (as you propose) are still pretty nuanced. Do you really think we pick up on such subtle differences and allow them to influence us so heavily?One more thing, it seems a little awkward to ask a friend, “What had I better do?” than “What should I do?” Would you still advocate the use of “had better” at the risk of sounding archaic and overly formal?
The difference is probably be nuanced or even insignifcant for many people, but not so for me. Indeed, I suppose that a number of people would find one of my self-talk registers (voices) to be quite stilted. Perhaps this post is really not useful to others, but it has been so long since I last posted that it seemed anything were better than silence.
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