I find it useful, refreshing even, to take a step back from time to time. Especially when the market narrative gets unduly tedious or otherwise descends into semantic quibbling.
Perspective can be a source of respite when the debate (the macro topic du jour) is couched entirely in labels referencing the series of overlapping, intersubjective constructs that we (incorrectly) identify with reality, having many of us long ago forgotten what it means to be truly alive.
“Recessions,” “bear markets” and all other labels in the financial and economic lexicon are nothing more than nicknames for arbitrary thresholds associated with games we created to make our lives worth living. Some of those games are connected to the fulfillment of real human needs, others not, but it’s rare we feel that connection. Paper stock certificates representing my share of a company whose products I eat for dinner are now an options chain at an online broker where I can buy a contract I don’t intend to exercise conferring the right to purchase shares of a company whose products and services I’ll never use.
As I’m fond of reiterating (and this irritates some readers to no end), there’s no such thing as money, stocks or bonds in the first place. Options, swaps and futures are just abstractions of abstractions. In the first half of 2022, we relearned that at the bottom of it all, there actually are at least some real things that real people need — wheat, oil, corn, natural gas and so on.
But like most of the games we play with one another, the majority of this is pure fiction, useful for the extent to which it facilitates the efficient procurement of sustenance and, beyond that, helps us live “fulfilling” lives, the definition of which changes over time and differs (sometimes dramatically) across societies. It’s to that latter point I want to speak below.
“Growth,” in the modern sense of the term, is important, and without the incentive structures embedded in capitalism (and the relentless pursuit of growth), it’s likely the world would be a more primitive place. But “primitive” isn’t always a pejorative. And if pre-economics counts as primitive, then our already truncated conception of history is now confined to the mere blink of an eye. Economics, as a discipline, is just 300 years old. Capitalism in anything like its current form isn’t much older than that, although you can obviously find elements of what, today, we’d identify as “market principles” in countless societies stretching back millennia.
Yuval Noah Harari famously suggested humans have come to understand famine, plague and war as avoidable tragedies that are fully within our capacity to prevent. Disciplines like economics have helped us along, as have medical advances and a better understanding of how cooperation is preferable to conflict, especially in a world where our species is the only species capable of large-scale cooperation in pursuit of dominion. Although Harari’s assessment is still technically true, the last two years have certainly raised questions about the contention that hunger, disease and conflict are no longer at the top of the list when it comes to human concerns.
Purportedly, the intersubjective constructs, myths and ordering principles (all the -isms, theories, doctrines, systems, disciplines, games and so on) that together allow for cooperation on a global scale in pursuit of everything from international trade and finance to cooperative space exploration to shared medical advances, have left humankind immeasurably better off. How could it be otherwise? Surely humans weren’t happier without modern medicine. Surely the agricultural revolution was a positive development. Surely it’s better that every person is, in Western democracies, at least nominally free to choose his or her own path in life without feeling pressure to conform to some template that says, for example, a male child born to a farmer must grow up to be a farmer too. And so on. We hold those truths to be self-evident, as history’s most famous slaveowners once put it. But how true is any of that?
Even the most superficially irrefutable manifestations of that narrative don’t always conform neatly to reality. Let’s take modern medicine first. I have perhaps four real friends in this world. I had five until last year, when a kind soul I’d known for a decade died of pancreatic cancer in New Delhi. Modern medicine gave her the diagnosis and ensured she had no pain, but unlike someone born 500 years ago, she was compelled to live for three months knowing she was going to die. Imminently. She also knew that although, in the final analysis, the outcome would likely be the same wherever she lived, were she from an affluent family in the United States or any other advanced economy, she likely would’ve lived longer. Much longer, even. She was 41 years old. Modern medicine was no help and, depending on one’s capacity to cope with the unimaginable weight of knowing one’s approximate death date, modern medicine may have been a bane.
And what about freedom? Plainly, liberation, where the word means freeing sentient beings from literal bondage or from tyrannical attempts to perpetuate inequality, is a good thing. But consider the term in a broader sense, where humans, especially in advanced economies, are compelled to write the story of their lives chapter by chapter, largely on their own, with nothing strictly prescribed beyond basic education. The psychological distress associated with limitless optionality can be onerous indeed. “Who am I?” can be a very vexing question. “Whatever you want to be!” is, in some cases, the most terrifying answer of all. As Erik Erikson once observed, “The patient of today suffers most under the problem of… who he should be or become, while the patient of early psychoanalysis suffered most under inhibitions which prevented him from being what and who he thought he knew he was.”
Lacking the capacity to change the past, we have a tendency to claim we’re unequivocally better off than our ancestors, if not each of us, individually, then certainly all of us, collectively. Sure, most of us have lists of things we’d do differently if we could “do it all again,” but by that we don’t mean we’d prefer to live in a time before antibiotics or modern transportation or during a period when being born to a farmer meant being a farmer yourself, and not necessarily because you liked farming.
Likewise, we almost universally contend that economics and market-based principles have created unparalleled prosperity, where “prosperity” is everywhere and always equated with happiness. How many truly prosperous, truly happy people do you know?
Looking back across history, it simply isn’t true that the intersubjective constructs and ordering principles that make the world spin today are the only ones capable of providing for the needs and wants of our species. Countless societies dating back to the dawn of human history were able to procure sufficient food, water and shelter. Many of those societies were doubtlessly far happier on balance than today’s disaffected Western democracies. Indeed, it’s almost surely the case that, during periods of plenty, some of the world’s poorer nations have happier people in modernity than rich nations.
In Homo Dues, Harari wrote: “Today, more people die from obesity than from starvation; more people die from old age than from infectious diseases; and more people commit suicide than are killed in war.”
He presented those statistics as though they’re an unequivocal testament to human progress. I’m not so sure.