I know this topic may seem a bit of a departure from my usual venues—and yet I hope that mentioning the M-word in the title is not so unappealing that you feel like leaving already. Several experiences and events stimulated this post. I will briefly mention them and then do my best to provide a very short description of what I think is going on.
- stock prices have increased (for a long time) faster than inflation
- the American work environment has become more competitive
- people in the U.S. are more politically divided than at any other time in my lifetime (the past 45 years)
- 9/11, the housing/banking crisis, and now COVID each provided a shock to Americans’ trust in “having a good future”
- crypto-currencies enter the stage, and are now booming
- for people who do not trust those, non-fungible-tokens appear
Each of these relate to trust, and many of them also directly relate to money. For the purpose of this post, I would like to invite you to consider money as a crude, that is to say a kind of poor man’s, measure of trust in, or credibility of, the notion that one will have a decent life in the future. This does not hold true for the overall quantity of money—here the relationship is almost reverse: as the amount of money grows, people may lose trust or faith in its utility.
Money can become a measure of an individual’s trust and credit precisely due to the belief that people cannot, as individuals, create it out of thin air. And so, if someone offers you money in exchange for your work or something you own and may want to part with, you can trust that someone else will, at a later time, accept it in turn.
Critically, this trust does not come from the money itself. It is a symbol of trust and credit, a token. If you meet someone you have never had any interactions with before, and this person offers you money, humans have come to associate that with the belief that if they accept it, they will have the same option open to them in future. But the amount of money offered is merely a symbol for that belief.
What has happened in the more recent past is, once again, factors coming together that, to me, suggest an erosion of the actual trust that people have in their ability to live the good life and, in consequence, trust in one another:
- through legislative change, people started to push money into the stock market without necessarily wanting to purchase stocks; this happened as a means to “save for retirement”, which artificially yanked up stock valuation and provided an incentive for managers to shift their attention towards measures further increasing valuation by becoming “attractive stock”
- this has led, as explained fairly well in “Can’t Even” by Anne Helen Petersen, to a vicious cycle: worker-consumers saw their retirement accounts grow in the belief that their future is safe, corporate managers start seeing workers more and more as mere tools, and many jobs have been outsourced elsewhere or have become very unappealing, given the meager income
- pressure on individuals to perform and to demonstrate their abilities has become of paramount importance, which in turn has fueled the belief that getting a college degree is a necessary requirement for securing a job that pays well enough for having a decent life outside of what have become precarious work conditions
- the three mentioned crises each triggered some fear that the belief in a good future based solely on how much money one has accrued in one’s retirement accounts might not, in itself, be sufficient to feel safe, further decreasing overall feelings of trust
- through crypto-currencies and now NFTs, a supposedly safe mechanism of storing value—given the proven inability to grow the amount of tokens—appears on the stage, and a Wild West style gold-rush kind of run on these tokens starts to emerge
So, after this very long preamble… How does this matter?
Well, here is where in my mind our tendency to swing between two opposing poles of behavior comes in. For every unit of effort I exert, I can choose between two basic options: I either do actual work by improving my skills or using my skills to create something of value, or I can devise of ways in which I can try to convince others that I have skills or am contributing something of value. In short, I can either be virtuous or use virtue signaling. And for the latter I like to use the word bullshit.
I guess the American culture has always been a bit more susceptible to the swing between virtue and virtue signaling. My intuition is that people in the U.S. grow up in and with a culture of anxiety around personal security and safety. Individual liberties are a big issue, and so are guns, a highly competitive labor market, and a desire to show oneself as virtuous and righteous. It is all a very stressful environment, really. At the same time it offers incredibly dynamism and growth opportunities.
Fundamentally I believe that we may have to go through one more (and possibly big) crisis for the pendulum to swing back to the truly virtuous behavior, to let go of virtue signaling as sufficient to make it. It will of course take a lot of courage and determination, and it seems to me as though many people are waiting for that moment. They just do not want to be the first one to stick their neck out.
One important belief that needs updating is the utility of money chasing money—in other words the ability to “make money” by shifting around money in an attempt to gain for one’s personal security in the future. This may work for individuals for a short time. Once it becomes a pattern that a large number of people engage in however, with every person that shifts their behavior from true value creation (virtuous work) to attempting to increase their personal security through money-making (virtue signaling or bullshitting), the security of the community decreases, given that fewer and fewer people create value through actual work.