06/04/2012 11:34 am ET Updated Aug 04, 2012

Fortuna et Melancolia

What is causing the confusion and malaise that permeates our society or at least the world as reflected in the mirror of our Argos-eyed media? "Grexit" a parodic shorthand for the imminent ejection of Greece from the European Union symbolizes not just the economic woes of the European Union but the disillusion and despair of our era. Yet never before has such a broad swath of humanity enjoyed so much privilege and luxury: the eradication of disease; new life-enhancing and life-prolonging technologies and medicines; the ability to travel long distances quickly and in relative comfort, to communicate across continents and time zones, to access foods and other products regardless of season or location. In many ways, our lives surpass in quality and longevity those of former monarchs, approaching standards that that were once only dreamt of in fairy tales and myths. As a child I remember being awe-struck by a story about the cup of omniscience that allowed mythical Persian Kings to glimpse the entire world -- the so called Jame Jahanama. Today I can easily and freely do that through skype from the comfort of my living room. This should be a cause for daily thanks-giving and celebration. Instead, from Grexit to Iran's off again, on again nuclear program, from inflation to deflation and financial repression, we are bombarded with messages of despair, as if the world we lived in were Durer's Melancolia.

What is happening? Why has the spread of prosperity led to increasing disillusion and discontent? A very compelling answer can be found in Philip Bobbit's book, The Shield of Achilles. Bobbit explains that new technologies are forcing a transition from the nation state to what he terms the "market state". The nation state promises its citizens security, welfare and cultural integrity; promises that can no longer be kept because the state has lost control over its key infrastructure, such as telecommunications, energy, finance, and transport. Control of these industries has shifted from governments to private hands and has been globalized. As a result, the state no longer has the capability of providing the security, welfare and cultural integrity that its citizenry have come to expect and demand. This leads to a crisis of legitimacy that causes a transformation of the state itself. Incidentally, as Bobbit convincingly explains, this is not the first time that such a transformation has occurred. In the recent history of the western world, there have been no less than five such transformations, beginning with the feudal state in medieval Europe, spanning the kingly state epitomized by Louis XIV's France to the great empires of the nineteenth century. The nation state itself was born out of the ashes of the empires which were delegitimized by forces wrought by the Industrial Revolution, just as now, the technological revolution spells the demise the of the nation state.

These epochal shifts bring about new forms of state. The emerging market states do not make the same promises as the nation state; instead they promise one thing: "opportunity" -- the opportunity to create companies like Facebook and Google and the concomitant riches and rewards for the creators. The transformation of the state from nation state to market state provides in my view one of the most plausible explanations for the despair that accompanies increasing prosperity in our time. No-one denies that we are better-off than our ancestors, but the loss of security, welfare and cultural integrity after a century of nation state rule has a profoundly destabilizing socio-economic and psychological effect. Welfare benefits are cut, public education shrinks and governments the world over appear helpless in the face of international terrorism and inexorable immigration. The unimaginable riches amassed by a few who are able to take advantage of the opportunities promised by the market state, continuously paraded in the media, only exacerbates the problems perceived by the vast majority. Despair and despondency permeate the era as people helplessly watch the Facebook IPO and the decision of one of its twenty something year old founders to renounce his United States citizenship to avoid future taxes on his Croatian wealth.

The Shield of Achilles provides a satisfactory but not satisfying answer to these concerns. For that we need to turn to the world of literature. Unconstrained by factual and historical accuracy, stories provide ontologically compelling answers that elude historical tomes on political economy. One such story is Edgar Allen Poe's "The Masque of the Red Death". In the story, Prince Prospero (the name itself evokes prosperity) retires to a sumptuous palace with one thousand of his courtiers and enough provision to ride out the "Red Death", a devastating plague. In the midst of this self-imposed isolation the Prince has a masked ball. Each room in the palace is decorated in a different colour: blue, purple, green, orange, white, violet; each room surpassing the other in grandeur. The last apartment which is also the most opulent is all black, except for the window panes which are a "deep blood colour".

As the ball progresses all the rooms except the black room are densely crowded and in them "beat feverishly the heart of life." The appearance of a tall and gaunt stranger dressed in a superb but macabre black outfit, wearing a death mask causes great consternation. "Even with the utterly lost, to whom life and death are equally jests, there are matters of which no jest can be made". Unnerved by the stranger in black, the Prince orders his arrest and unmasking. The fearful courtiers don't dare lay hands on the stranger and task falls to the Prince himself. As he draws a dagger and is about to stab the stranger, the Prince falls prostrate to his own death. The courtiers follow the stranger into the black room, and though fully aware of the fate that awaits them in there, the pleasure is too intense to be resisted. One by one they perish as they embrace the Red Death.

The story provides a satisfying explanation of our times. We all know instinctively that we are hastening our own demise: the destruction one by one of life giving forces through human pollution and environmental degradation; the exhaustion of energy sources to power increasingly exotic lives of travel and consumption. Do we really need that third runway at Heathrow despite all of its monstrous wreckage? Yet we will have it. Is the pollution of ground water through fracking the answer to our energy problems? You bet it is. Like a bad hangover after a night of orgiastic hedonism, our unbridled consumption leads to despair and despondency as we helplessly contemplate our inevitable doom at the altar of pleasure.