What a time to be alive

This post is designed as an interactive piece with background readings and videos;
bookmark and return to them at some point if you don’t dive in on first read!

At the end of the day, we’re nothing more than slightly evolved apes on this rock called Earth. We live and govern ourselves through a set of patterns and behaviors that, in their sum, we refer to as society. Religion, economics, politics, entertainment, culture—all of these are simply a set of commonly agreed-upon myths and stories that perpetuate upon each other to build an edifice of shared understanding for this global society. For a group of monkeys, we’ve done pretty well for ourselves… but every now and then there comes a time to reshape the stories and myths we tell each other.

Like practically everyone else on the globe, this current epoch of social distancing has been a period where time is of abundance for me. The last few weeks have led me to dive into the basics of economics, public policy, and more. I won’t claim to be an expert, but I can say that my exploration has led to perhaps a clearer understanding of the broader challenges that confront us. Here’s a set of assorted reading/viewing that I’ve absorbed the last few days. Overall, it’s helped me better visualize some of the threads of our unspoken myths, some of the pieces of the puzzle that is our set of societal systems, and how it might be time to evolve yet again.


PART 1: NARRATIVE COLLAPSE

First: we’re in a mass narrative collapse.

This blog post by Venkatesh Rao expounds a bit more on the idea.


For the fourth time in my adult memory, humanity has collectively, visibly lost the plot at a global level. My criteria are fairly restrictive: The dotcom bust and the 2007 crash don’t make my list for instance, and neither do previous recent epidemics like SARS or Ebola. Global narrative collapse is a fairly severe condition, but apparently no longer as rare as it once was.

Here’s my shortlist:

Fall of Berlin Wall (1989, I was 14)
9/11 (2001, I was 27)
Trump election (2016, I was 42)
Coronavirus (2020, I am 45)

It always seems to happen relatively suddenly (but is not always entirely black-swan-level unanticipated; it is typically a gray swan), and in each of the first three cases, by my estimate, it took humanity 1-2 years to reorient.

The TL;DR of it is that a huge element of our shared global experience the past few weeks has been a sort of collective daze—an inability by individuals (and societies at large) to effectively frame this situation in clean terms that fit existing narratives (us vs. them, good vs. bad, in-group vs. out-group).

In recent days, as the pandemic situation has dragged on, we’ve seen an increasing popularity of fringe narratives and conspiracy theories (China intentionally started the virus; Russia did it; etc.) for this reason exactly. Humans need these kinds of clear narratives, true or not, to help us define our place in an uncertain universe.




Why are we in this kind of narrative collapse?

Since the Enlightenment era and the Industrial Revolution, Western (and by extension, global) society has revolved around a core idea: the power of rationality and science as a new God.

A Steve Jobs quote I saw recently sums up this idea:

He was struck by an insight that would prove central to his own reinvention, a subtle but significant shift from the spiritual to the practical: “It was one of the first times I started thinking that maybe Thomas Edison did a lot more to improve the world than Karl Marx and Neem Karoli Baba put together.”


Remember this quote: let’s call it Myth 1. This core belief, Myth 1, has been radically transformative to our planet by any measure. Technological and economic innovation since the Industrial Revolution have unleashed massive financial and scientific change.

image
“Almost all the gains in human well-being in history happened since the Industrial Revolution” (Vox)


But, this also means we’re now more connected and vulnerable than ever.

Globalization has led to massive unanticipated second-order systems effects that we’ve never had to confront at this scale.

  • With unprecedented levels of travel, interwoven supply chains, and immediate information sharing, we have an increased global vulnerability to pandemics that can move at breakneck speed. Something like this coronavirus situation simply wouldn’t have occurred 100 years ago.
  • The widespread effects of industrialization have increased the likelihood of tail events like climate shocks and mass displacement.

We’re now confronting these problems as an interconnected planet, and I would posit that the narrative collapse we’re in is because we’ve never had to deal with these kind of systems-level challenges before at a global scale.

Call it Frankenstein 2.0: The Global Edition—we’re confronting the machine we’ve built as a global society, and realizing how incredibly difficult is to untangle the complexity of systems-level issues. We may finally be at a global tipping point where we’re recognizing the logical extremes of Myth 1 and the Industrial Revolution-era ideals of unfettered progress.



A Bong-Joon Ho aside

These unanticipated global systems effects are compounding an existing set of issues with our economic and financial systems that were already coming to a head… thanks to increasing inequality, mass consumption culture, automation, and more.

I found Bong-Joon Ho’s films to be pretty salient viewing in this regard. His trifecta of Okja, Snowpiercer, and (the Oscar-winning) Parasite are brilliant films in their own right. But together, they almost form a perfect trilogy, and represent necessary viewing for this era to underscore some core themes of the world we live in.

Parasite spotlights class inequality in the 21st century, and how climate change and coming shocks will disproportionally impact lower classes. Okja highlights mass production/consumption culture and its ethics, how our individual decisions shape society as a whole, and how redemption and change may only come from conscious choice. Snowpiercer, with its allegorical view of capitalism and class inequality, showcases how the system perpetuates itself and the difficult choices we must make if we want change.



Spoiler alert!


In sum, it’s tough to watch these films and not come away with a jarring recognition that the world we’ve built has some gaping problems. (A walk around the block these days will reveal the same.)


PART 2: ECONOMIC LEVERS

Government responses

We’ve now found ourselves in a situation where public health priorities necessitate the shutdown of our global economy. Governments are trying to figure out how to respond using the 20th century economic tools at their disposal.

The tools deployed by the US government and others in March were predictable:

  • Monetary policy levers in the form of Fed interest cuts to 0% and massive Fed borrowing
  • Fiscal policy levers in the form of direct stimulus to businesses and individuals

Here are some Econ 101-style videos about monetary and fiscal policy as a basic refresher.






Next up (once Congress is back from their recess [!]) is a rumored massive fiscal stimulus package in the form of infrastructure spending, designed to immediately get individuals employed and kickstart the saving/spending cycle.

These tools are typically applied within the context of our regular debt and business cycle to smooth out the impact of short-term fluctuations and overheating in the market.




The problem?

1) These tools are not nearly enough to resuscitate an economy shut down to this scale, with >20 million people in the US alone unemployed.

2) Printing trillions of dollars of capital will also lead to predictable outcomes like hyperinflation, unless carefully balanced with countermeasures.

Simply trying to apply our current tools to the problem is like putting a band-aid on a broken leg.


At this stage, given the sheer scale of economic and social impact, governments will likely need to drastically rethink their roles in society.

In times of global unrest, what does a nation owe its citizens? Healthcare, food, shelter, and other basic needs? We’re confronting, in real-time, these broader questions of the role of the state in a world where citizens are increasingly vulnerable to situations out of their control.

This Economist article highlights the mutable nature of nation-states… and how wartime changes their role and scope in ways that are often permanent.

This is before we even start talking about developing countries and their economies: they have an extremely limited set of tools at their disposal and the situation looks bleak (see Iraq and Italy for just a couple of examples). Global events do not affect everyone equally.


We were already on a collision path to confronting these questions. Again, for a number of reasons, the status quo economic systems were going to fail us sooner or later:
1) Globalization has led to second-order systems effects (pandemics, climate change shocks, and more) that demand better methods for global coordination and cooperation.
2) Automation and technological progress have been accelerating, and it’s clear that this would eventually lead to unemployment and economic displacement.
3) Growing global economic inequality would eventually lead to global social unrest.


The crazy thing? We are likely entering an era of abundance. Thanks to unprecedented productivity growth, indicators of wealth, health, energy production, and food production are at all-time highs… we simply don’t yet have the tools and systems to ensure that the needs of humanity are equitably met.

Bottom-line: we’re entering this period of abundance, fueled by our technological improvements, using scarcity-era systems. The cohesive vision of the world we had post-WW2, with the ideal of the American Dream spread worldwide, is on the brink of collapse.


PART 3: CHANGE

The EconoMonster

It’s not all doom and gloom. Pay attention to discourse about the economy these days; it’s quite curious. The economy is often treated like a 3rd-party actor exerting its will on the world—let’s call this Myth 2.

The entire world holds its breath at the same time, in collective consternation about the mythical Economic Beast. Global political leaders, financial mavens, and everymen alike are all scratching their heads thinking… “I wonder what’s going to happen to the Economy. Do you think the Economy will recover? How will we survive this?”

The entire world is facing the same problem at the same time, related to human-built systems that are entirely in our control, and we are collectively scratching our heads trying to figure out how to survive what we are framing as a purely exogenous shock. The lack of agency being exerted in unison is shocking to me, and signals how far down the rabbit hole we’ve come in being driven by systemic forces that we feel are out of our control.

Here’s the thing! Our set of economic principles is no more set in stone than our pre-16th-century principle of geocentricity. The economy is merely a tool defined by us; simply an arbitrary set of made-up rules that we can shape to our needs to coordinate a complex set of actions and incentives. Money, wealth, and debt are all human-made concepts conjured out of thin air to meet our goals.

This Dalio interview is worth a watch (ignore the interviewers’ questions, which miss the point entirely).



The takeaway: we’re soon to be in the midst of a once-in-75-year major shift in how we think about the economy. (The likes of which we haven’t seen since post-WW2 when we adopted our current monetary policy system and adopted GDP as our core metric)

We have the ability (and need) to shape our economic and political systems to adapt to the new reality we’re confronted with. The sooner we all are able to collectively recognize this truth, the better.

That said, what is most likely going to happen once the public health issues have been sorted out? Most actors in the economy will push to restore business as usual and convince us that this was a collective dream. Businesses and the government will tout a massive economic “recovery”, increase ad and marketing spend, and try to work around the margins to restore the status quo.

This would be the worst-case scenario of ignoring this wake-up call. It would be a colossal waste to look at this once-in-a-generation opportunity to revisit our systems, and instead try to push for a return to the status quo: a consumption-driven society, growing inequality, no cohesive vision, massive ecological impacts, and more.



What does the solution look like instead? That’s a complex maze.

Pull at any one thread: globalization, mass consumption, funding welfare and social services… and you’re in a morass that includes fiscal and monetary policy, supply-side economics, deficit spending, and more. Again, this is part of the narrative collapse: there are no simple answers in a complex, system-driven society.

This 3-part set of essays from Andrew Kortina (Venmo co-founder) may untangle the knots a bit, and is well-worth the read.

A salient quote:

It is unsurprising we have a crisis of meaning, when you recognize this feedback loop implied by demand generation:

→ We want more productivity, so we can produce surplus reserves to endure hard seasons.

→ We use wages to encourage participation in labor.

→ We use profit to incentivize productivity increasing (labor saving) innovation.

→ We innovate and reduce the need for labor.

→ There’s not enough work to do, and workers don’t get wages (because profits go to capital).

→ We incentivize over-consumption to create demand for labor by teaching people that consumption is their primary means of self expression.

→ We continue to invent labor saving technologies, and an increasing portion of labor serves demand that is artificially generated through ads.

→ An increasing portion of people recognize their work is not essential, but the result of artificial demand generation. With respect to meaning and dignity, we’re not in a great place. But, with respect to generating / extracting profits, we’re pretty efficient.


An exploration of potential solutions is out of scope for this (already unwieldy) post, but a topic for future discussions.

We don’t have simple answers so this will no doubt be an involved exercise (to say the least), but it’s important that we don’t let sorting out the details keep us stuck in the status quo. Moving forward will need a hefty dose of creativity and a lot of application of systems thinking best practices… but the solution is entirely in our hands.


In Conclusion

We’re in a mass narrative collapse. That’s because we’re at the end of one driving Myth in global society (science and rationality as core forces above all). We’re in the midst of global systems challenges to be expected in any major epochal shift. To resolve this, we need to recognize another core Myth: that the economy and our invisible systems are separate from us somehow. It’s time to dig deep into the assumptions and constraints that built the system we have today, and reshape it to meet our needs.

We were already on a collision path with these issues… this pandemic is merely the accelerant. Never let a crisis go to waste.

“What is it about basketball? Alexander Wolff, in his book “Big Game, Small World,” reports on this addictive mystery at the heart of the game, first observed by its founder, James Naismith. According to Wolff, one day Naismith walked past a young person throwing a ball into a basket. An hour later he saw the same boy, still shooting. “I stopped and asked him why he was practicing so long,” Naismith wrote. “The boy answered that he did not know, but that he just liked to see if he could make a basket every time he threw the ball.””
“When a man reaches this stage of ‘spiritual’ development, he is the Zen artist of life. He does not need, like the painter, a canvas, brushes, and paints; nor does he require, like the archer, the bow and arrow and target, and other paraphernalia. He has his limbs, body, head, and other parts. His Zen-life expresses itself by means of all these 'tools’ which are important to its manifestation. His hands and feet are the brushes and the whole universe is the canvas on which he depicts his life for seventy, eighty, or even ninety years. This picture is called 'history’.”
— DT Suzuki // intro to Herrigel’s excellent Zen in the Art of Archery
“In the era of the iPhone, Facebook, and Twitter, we’ve become enamored of ideas that spread as effortlessly as ether. We want frictionless, “turnkey” solutions to the major difficulties of the world—hunger, disease, poverty. We prefer instructional videos to teachers, drones to troops, incentives to institutions. People and institutions can feel messy and anachronistic. They introduce, as the engineers put it, uncontrolled variability.”
Slow Ideas, New Yorker

“Our battered suitcases were piled on the sidewalk again; we had longer ways to go. But no matter, the road is life.”