The interdependence of all and everything
What do ship-owners and stock traders have in common?
Two things: both buy when the markets are down and they both live in a continuous cycle of ups and downs. For either of them, it does not mean that life is good when all indicators are in their highs, on the contrary: all it does is indicate that the markets are overheated and collapse or a downturn is imminent, therefore they are looking for protection.
Ship-owners and stock traders both know that throughout history there never has been a plateau — the markets are ruled by cycles: birth is followed by death and new birth, spring is followed by summer, autumn and winter; the heart rate goes up and down — and once there is a flatline, we are dead. These are the rules of the universe, not only the markets, and we all live in a continuous cycle.
Ship-owners, traders and economists know this well. For many, it seems that the present crisis is the biggest and the most important one, simply because we are experiencing it today, in real-time. Throughout the past one hundred years, however, the world has experienced a number of very challenging crises and Black Swan moments, and many who suffered through some of them in the past, are still alive today. The Stock Market collapse of 1929 and the Great Depression that followed, World War II and the societal and economic downfall caused by its consequences, the 1973 oil crisis when OPEC imposed an oil embargo against the allies of Israel — an event that was preceded by stagflation for nearly a decade — the serial bankruptcies of Latin American countries throughout the 1970s and the subsequent IMF bailout, the collapse of the Japanese asset price bubble in the 90s that led to economic stagnation, the collapse of the Soviet Union and many more bear witness to the cyclical nature of crises and catastrophic events…
Today, mainstream media tend to remind us only about the last significant crisis of 2008, when Bear Stearns and Lehman Brothers were allowed to collapse in a spectacular manner, and the Goldman Sachs-led Greek bailout produced a catastrophic outcome for the country.
Such cyclical behavior throughout the world is no surprise for ship-owners, stock traders or economists: they eat market downturns for breakfast while their goal is to remain calm and focused in order to manage any situation: they observe and wait for the most promising opportunities to be created at the lowest risk. This applies to doctors as well: painful and distressing situations are their bread and butter and they must remain calm and establish how to resolve a problem. Politicians, however, are often elected for a certain period of time, and they must rise to the occasion or be eliminated forever. Naturally, this does not apply to all of them — many politicians remain in the world of politics for an extended period of time, although they can never be certain when they are no longer the flavor of the day. The political game can be crude and rough. Maybe that’s a good thing.
Nancy Koehn, a historian at the Harvard Business School, said that ‘leaders are forged in crisis’. Leaders become real when they inspire and lead people through difficult times. Today, we are facing multiple crises: the COVID-19 pandemic is bad enough but its secondary effects that are starting to become apparent are possibly even worse. We are in the middle of an economic crisis, a situation where in some countries half of the businesses are at a standstill; this is accompanied by a societal crisis, where already more than 26 million Americans are unemployed and foodbanks are working overtime (at the same time, French and other European farmers are throwing away milk and produce because logistics have collapsed).
Imagine if Australia with its 26 million inhabitants were out of work.. because that is the number of unemployed in the US: it is more than the entire population of Australia…. The same applies to the rest of the world — Italy, Spain, France, Russia are in total distress, while other countries are still waiting to experience the full effect of the crisis and its impact on employment and mental health figures.
Presently, politicians are discussing various options and possibilities how to revive the economy, how to help businesses, how to stimulate demand (at a time when many people are still locked up without the opportunity to leave the house), but many forget that the number one focus of all efforts should be the people.
Throughout the history of the world, great leaders understood that in order to stay in power and to avoid unrest and collapse, people must never be forgotten. The Romans coined the phrase ‘panem et circensis’ and referred to the plebeians of the Empire. The citizenry that had no means and lived from hand to mouth. It would suffice, they thought, to provide food and games to keep them quiet and content. The same applies to present-day Egypt, where the main food item, bread, is heavily subsidized. No need to remember how the Arab spring started and engulfed more and more nations, when the price of wheat rose dramatically, not least as a result of the speculation of Wall Street commodity traders. Of course, this was coupled up with brewing political and military circumstances, but it only takes one card to fall before the entire house of cards collapses.
The Maslow pyramid highlights the needs of human society, and it starts with physiological needs, such as air, water, food and shelter, followed by safety. The safety of employment, health and personal security. The rest of human needs such as status, intellectual growth and philosophy come later, he claims. However, without satisfying the core human needs it is not possible to think about any others.
We need to focus on developing technologies that have a high added value, we need to think about innovation, robotics, AI, machine learning, and more in order to make our economies more efficient and add more value at the lowest possible costs of capital. However, one cannot think about Robespierre if one is faced with having to satisfy one’s most basic needs: food, shelter, employment. All humans need a raison d’être, a reason to exist. We need to have self-worth, we need to feel being cared for. That is why the Mafia is taking over in Italy again amidst COVID-19 crisis- because they are providing people with basic foods and a level of ‘protection’. Thus they are exerting control and claim leadership.
People need to feel cared for and they need purpose. They need vision and leaders. A crisis is a perfect situation for real leaders to emerge, to give their followers a direction, inspire them and protect them from doubt and fear. President Roosevelt said in his inaugural address in 1933 in the middle of the Great Depression:
‘The only thing we have to fear is the fear itself. This is no unsolvable problem if we face it wisely and courageously. There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly’.
The talk about universal basic income (UBI) has been a topic of interest for a while in many countries. Perhaps, in times of crisis, this would help people to satisfy their basic needs of food and shelter and could feel more secure as a consequence. For some, the UBI may well be the last chance to get them out of poverty and prevent them from developing serious mental health issues. However, in addition, all people need a purpose to exist. We need activities, we need work and fulfillment; we must feel needed, feel that we are together in this world and we care for each other. People need leaders and faith. Today’s crisis is a great time for leaders to emerge and fix what is broken, while preserving and adhering to the core values that should define humanity.
