More than 6 years ago – in 2008 – something big happened. The world economy took its first big knock from which it has not recovered since. For many, it has set in motion a spiral that threatens to blow our livelihoods apart.
Who would not be intimidated?
But something else happens, something much more important as this crisis is only an immune reaction of the world to something that was fundamentally wrong. We were praying to the wrong gods and it cannot be a surprise that the real gods show us the metaphorical finger now.
We have become addicts of the financial industry which in a healthy economy would be a Meta layer on top of the real economy. In a healthy world, it would matter little to nothing what the financial world is doing as its size and business would be completely insignificant outside a small circle of insiders. Sausage eateries should not have to care how wagers are performing on the Wall Street casino.
But this is the world we are living in. It’s a grotesquely inflated version of the real economy. People doing real things are not important anymore. Only the gamblers in the numbers economy are important. Managers do not run their companies by what they do and how they should serve customers best but only by number metrics and how the share price fluctuates.
And here we are at the core of the problem.
I know that I am griping right now and that I have lashed out countless times against the managerial financial mafia but the problem is real. We have lost touch with the real world as we have always abstracted everything to the point where all connection to anything real has gone with the wind. We are dealing with derivatives of derivatives and not with the real thing anymore.
Don’t forget that the price of a certain company’s stock is a derivative of this companies past performance mixed up with future expectations in it. In no way does a stock price signify any real value but as managers bonuses depend on share prices, this is the only thing they push. It’s only natural that from here to fiddling with the numbers it’s not far and we cannot really blame the managers. They just do this because they can. As we have become so accustomed to the gimmicks of the financial world, we almost expect this kind of behavior from them.
In 2008, the grotesquely huge bubble started to deflate and the deflation process is in full swing now. It will take quite a while until it has reached the point where the real economy is in sight again.
We call this a crisis when in fact we are just going through a self-healing process. A sort of immune reaction, which will destroy a large part of our convictions. This always hurts.
However, there is worse. Booms and busts have happened before. The world has gone rampant on junk before, crashed and re-emerged from the rubble. This time though, all the destruction cannot be undone by administering the same old medicine. Shrink yourself to health and go on with your life does not work anymore for one single reason.
The very nature of how single persons generate income is changing in fundamental ways. We are currently being struck by the most massive wave of computerization and robotization the world has ever seen. Retailing, a domain where millions found employment as store clerks, drivers and back office clerks is going fully virtual.
Amazon just gives us a glimpse of what is going to be our reality in 10 years from now. A Siri on steroids will replace personal assistants, lawyers, counselors and even your medic in a while as bracelets will monitor your bio data in minute detail and smart programs will tell you exactly what’s wrong with you and how to deal with it.
All this is the topic of another post to be published soon but it serves a point here. Employment as we know it, is a thing of the past as computers and robots will do us away.
The only way to get out of this is by leaping out on your own as an entrepreneur. Those entrepreneurs will be motivated by one of the strongest forces in life – the urge to survive.
Armies of middle aged professionals on the search for scarcer and scarcer jobs will eventually turn entrepreneurs and start up their niche businesses and the very forces that have cost them their jobs will now help them to build a new life.
Many things that an entrepreneur needed lots of employees for in order to get them done in the past can either be outsourced or be done by the entrepreneur himself pimped up by modern technology. If your iPhone can do what your assistant once did, you are really free.
Those entrepreneurs are slim, lean and aggressive. They can offer a much better deal on virtually everything as he thrives on a much slimmer cost base than even the most efficient corporation would find comfortable. They will bring even the biggest beasts to their knees when they start gobbling their businesses up small bite by small bite.
The economy will go back to where it once started and it will soar far beyond that point – for real this time. Myriads of people serving their tiny speck of the market with extreme customization will be found in just about any domain. Mass is dead and so is the mass economy and all its fads. Its demise will take managers into the grave as nobody needs them anymore. We will all be entrepreneurs – or whitle away.