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Monday, February 18, 2008

Back To The Future: The Economic World Of Hunter-Gatherers


The story of human social evolution goes roughly as follows: for eons people were hunter-gatherers, collecting food while moving from place to place. Such a life was VERY in tune with nature, resulting in very short life spans. Nature, after all, is not that friendly.

Then people discovered they could grow their food in one place. This was called farming. This method lasted to modern times, although in a very mechanical and corporate form.

The industrial revolution, starting in the 19th century, led more and more people to forsake farming for an urban existence. This also created a complex co-dependency between industry and those who worked in them.

Today in, Rich Karlgaard has this piece, THE DEEPER ROOTS OF ECONOMIC ANXIETY. I highly recommend the article, as well as the comments left by readers. They are quite revealing.
The U.S. economy is in better shape than the pundits, polls and press say it is. I don’t believe America is in a recession now. I don’t think one is coming. After eight months of anxiety and stock market turbulence, if the bad event hasn’t happened by now, I doubt it will happen at all.

The Fed is on the case. Bargain hunters like Warren Buffett are moving in, signaling a bottom. Small business is curiously robust despite the credit crunch. Employment is strong. Every commercial flight I’ve taken this year has been oversold.

Much as Barack Obama and Hillary Clinton would like us to believe 2008 is a trap door to the 1930s, they’re wrong.

So, there IS no recession, there is not GOING to be a recession, and all it takes is one man...Warren signal the bottom of something that isn't happening. Unless, of course, one considers Wall Street as the American economy. With all due respect, rather than Senators Clinton and Obama wanting us to believe 2008 is a trapdoor to the 1930's, it could also be said that Mr. Karlgaard's words could have been written by Calvin Coolidge or Herbert Hoover. In the economic funhouse that set up its tent in the 1970's, lip service is paid to the vast pool of unwashed consumers. The REAL decisions; the true engine of the economy, are those of the "investing class" who are better-educated, and therefore wiser, than a bunch of chocolate cherry-chomping chumps watching TV.
Cheap production technology combined with vast pools of talent, capital and consumers around the world guarantee a world of “extreme competition” (to borrow a McKinsey phrase) and ever-accelerating business-model evolution. What could slow it down? Nothing I see. Not even war.

What goes for companies goes for careers. Your career and mine can be disrupted more easily than before. The best personal career strategy is to assume that our jobs will be disrupted. Everyone needs a Plan B.

If you and I face up to these facts and trends and likelihoods, the world will look scary but thrilling, and full of opportunity, too. If we cover our eyes or imagine that politicians can protect us from change, the world will look scary, period.

As my MIT Sloan School host on Wednesday, Howard Anderson, likes to say: Welcome to a world where you will eat well or sleep well, but not both.

Question for the day: Economic populists such as Barack Obama and Hillary Clinton call for "change," yet ironically claim they can protect Americans from change. In a world where ideas and capital can move anywhere in the world at the speed of light and flock to cheap production technology and talent, what protections against the future can politicians give us?

If one is to accept the premise that this "new" economic mold is to be unquestionably adapted to, there lies a problem right on the surface. Hunter-gatherer mentality requires cooperation, whereas capitalism requires competition. As Herbert Hoover liked to say, "A man who builds a factory builds a temple. And the man who works there, worships there." Certain forms of capitalism require slavish devotion from labor. And slavish devotion TO the concept that all taxation is evil; that spending is good as long as it's not paid for, and acknowledgment that certain well-educated experts know all the pitfalls of capitalism. Of which there are none, of course.

It is amusing to hear the phrase "creative destruction" in the context of economic activity. If such were applied equally across the board it might make sense. The problem is, some destruction and creativity is more equal than others.

As regards Mr. Karlgaard's Question of The Day, economic populist is synomous with communisim to the investing class. There is great offense taken at "class warfare," even if it's been going on forever and it doesn't take an Einstein to know who has been winning. Senators Clinton and Obama offer some form of change....their policies do not differ all that much. However, they DO differ from the status quo, which as we all know is Latin for "the mess we're in." The protections that government can give us against rampant unchecked corporate supremacy is the only hope the 95% of the population have for a future that MIGHT be brighter.

Welcome to a world where you will eat well or sleep well, but not both. This is a credo for hunter-gatherers. There is no stability, only uncertainty. In a Sim-City economic theory bubble it sounds so exciting, so dashing. It prompts me to ask why some people get so incensed at "big government" (which they should) but bow to illusory "market forces" when it comes to big corporations. At least with big government you have SOME rights as a human being.

I believe that this nation cannot withstand another four years of Bush economics (a contradiction in terms anyway). Should a Democrat sit in the Oval Office with the same fealty to large corporate donors then we're confronted with the choice this November between a moderate Republican and a moderate Republican.

In 1942 a Japanese general warned that they were suffering from "victory disease." Everything was going too smoothly; every goal was met and all opposition crushed. Such can be said for dedicated adherents to the status quo.

As regards making a choice between eating or sleeping, it's best to be reminded of an old saying, "The castle is safe as long as the cottage is happy."
Cross-posted at
This post kindly featured at MemeOrandum

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Blogger Papamoka said...

Another amazing post my friend! When it comes to Sim City I prefer the cheat codes as I am sure the top 5% do as well.

Great post Michael.

5:55 PM  

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