Austerity measures of the sort currently taking over Europe -- and the sort that will probably plague a Romney presidency -- may seem like the essential sort of "tough love" that a strict father might inflict on his wayward son; however, how often does it work? How often is the father's intention pure, innocent, and moral rather than simply manipulative and controlling with the only basis, "because I said so?"
Are severe austerity measures of the sort that have become popular on the world stage more akin to a terrible, abusive, and selfish father whipping his children because he believes them feeble, weak, greedy, pathetic and spoiled? Question is, who made them like that? Who "spoiled" them? Greedy? On who's behavior did they model theirs?
Like father, like son. The apple never falls far from the tree. Etc, etc. I am tired of politicians and fellow-citizens blaming the victims for the crimes that were committed on them. It seems to be a global threat. And yet, nobody blames themselves. Someone else is always the victim in this scenario -- and nobody's willing to ever admit to being the victim
Would the predators please raise their hands? Would the prey?
I love to pick up an FT whenever I am flying in order to fill that sweet spot between taking my seat and the bong that indicates I can turn on my electronic gear. While perusing such a paper on Oct. 25, I came across letter to the editor from Dr. John Whiteman entitled "Long on rabbits, short on foxes."
In it, Dr. Whiteman posits that we, as humans, are not outside of the very real predator/prey circle of life and, as such, we might be able to look at our financial crisis through a very similar evolutionary lens:
"I have long wondered if there is a rather obvious, even naive parallel (though not to be taken naively) between ecology and macroeconomics: one to be drawn from the predator/prey cycle observed in the wild. In the Lotka-Volterra equations for predator/prey relations, when predators become too numerous (the financial beneficiaries of satisfied demand - for which read "the new cash rich"), their prey (who have paid to satisfy their needs and demand with debt and residual risk) collapse in numbers (for which read 'become poor')."
I have been feeling something very similar. We go on and on about over-fishing, over-harvesting, and how we cannot allow our fields, our farms, our forests and our fisheries to die; however, when it comes to markets and how to rekindle our flagging economy, we seem to only be capable of blaming the crops, the trees, and the fish for not being more plentiful and for starving us.
Again, Dr. Whiteman:
"Many Keynesians rightly see the current crisis as a global collapse in demand. Is this collapse in consumer demand analogous in some way to a collapse in prey? Is it any wonder that the two worst economic crises in the history of democratic capitalism (the Great Depression and the Great Recession) have coincided with its greatest levels of inequality?"
If business is defined as the predator -- the fox -- and the consumer is defined as the prey -- the rabbit -- of free market capitalism, how can it be the rabbit's fault that he's too scared to come out of his hole? How can the rabbit be to blame if the foxes are starving? And why didn't the foxes take more responsibility for maintaining the viability and health of their food source? More from Dr. Whiteman's letter:
"Note that, in a Lotka-Volterra world of predator/prey relations, after prey collapse in numbers, given too many predators, so do predators themselves. But, note also that it is prey that recover first. Predators recover only when prey regenerate."
I suggest that investing in education (free and superior primary, secondary, and technical) and health (free universal preventative and curative care) is the kind of stimulus that would benefit the prey the most since abject poverty provides sickly, undernourished rabbits whereas well-trained, healthy, rabbits free of education and medical debt, tend to be the juiciest and least-wary -- willing to sunbathe in patches of summer sun and happily munch on clover.
Shall free market capitalism go the way of the American bison, the dodo, the North Atlantic cod, the Muskox, and any number of animals perceived as too dumb, too trusting, and too easy to hunt? Will we continue to over-hunt, over-fish our customers, consumers, and our market -- our prey -- until they're either extinct or just too savvy to fall for our seductive calls?
What is our responsibility to the health, happiness, and success of those who we fleece for money?
It isn't easy to be generous and kind to the same people who buy our stuff and give us their hard-earned money in exchange for our products and services -- especially when we're beholden to our shareholders, who demand constant growth and dividends, or if you've accepted capital investment from VCs, who expect 10x-100x returns on their investments, and quick.
Hockey stick growth -- and quick -- may well be what investors have gotten used to but maybe the sustainability of our free market economy is more in peril long-term, than is our environment -- at least domestically. For now, global finance and business can follow growth as it spreads across the globe, from Asia to Africa to Latin America; however, what will they leave behind in the United States? Will they leave behind fallow land, resting until it is again arable?
Or, will severe austerity measures, meaning to whip the prey, the victims, the people, into shape result, instead, of an economic salting of the land, laying waste to it, leaving behind all the bleaching bones and stinking carcasses of an economy that was sucked completely dry and then abandoned.I don't even need to ask Dr. Whiteman what he thinks; it's at the end of his letter to the Financial Times:
And what does this say about the outlook for the world's super rich? Perhaps it is time to go long on rabbits and short on foxes?