Everyone who knows me knows that I’m cynical, perhaps even overly so. So, for me to say that I’m cautiously optimistic, especially with the economic and social world descending into an interminable abyss, is perhaps a bit shocking. I think, though, that if I lay out my thought process here, it will shed some light on how this came to be and perhaps spread some my that cautious optimism.
Ironically, my optimism is in large part due to those very conditions which everyone, including myself, currently finds so redoubtable. While I don’t accept the notion of basic goodness or evil when it comes to human beings, I do believe that evolution has endowed us with some amorphous, poorly defined, subconscious entity that I’ll call human nature, and that one aspect of that nature is inertia. That is, humans continue to do what seems to be working until it doesn’t. It takes a significant external shock to the system to cause people to change their behavior in a meaningful way. Empirical evidence and behavioral psychology support this concept, and we even had a chance to observe such a shock within the past year. When gasoline prices spiked above four dollars per gallon, something happened that hasn’t happened in quite some time, namely people drove less and gasoline cosumption actually decreased.
The current economic environment is another such shock. For the last two decades we fueled economic expansion by inflating huge credit bubbles, by leveraging up to our eyeballs, and by profligate consumption of resources, all of which led to the crisis we are currently experiencing. An important function of a crisis is that it indicates that we are doing something wrong, in this case drastically so, and that we should change our behavior to avert similar crises in the future. Now, obviously there will always be financial crises, but I see glimmers of hope that the intense pain caused by this crisis is enough not just to change people’s behavior for the foreseeable future, but also to convince us that our entire economic model of excessive exploitation of leverage to encourage economic growth based on consumption is flawed.
History has a way of repeating itself, and I can’t be sure that people really will modify their habits. But we know that anything having inertia responds to force, and the energy and economic crises are enormous forces, as will be the future environmental crisis that will result if our behavior continues. My suspicion and hope is that these forces will divert our path around the brick wall that currently lay before us, an obstacle that, if not averted, will not merely change our direction, but instead stop us in our tracks.
