By Dian Cohen
You may remember this old parable: Once upon a time, six blind men come across an elephant for the first time. They each imagine what the elephant is like by touching only one part, such as the trunk or the tusk. They then describe the elephant based on their limited experience. Since their descriptions of the elephant are different from each other, they suspect that the others are dishonest and they come to blows. The moral of the parable is that humans tend to claim absolute truth based on their limited, subjective experience and ignore other people’s limited, subjective experiences which may be equally true.
That’s my impression of life today. We’ve never experienced a pandemic such as COVID-19. Armies of analysts are struggling to understand what lasting damage it has done to the global economy. Each is trying to predict what “normal” will be and when. Not a lot of consensus. Consider the economy as an elephant for a minute to focus on its many moving parts.
Imagine how one simple device – say a leaf blower — gets from manufacture to your neighborhood store. You need spark plugs, mufflers, carburetors or rotors, blower tubes and collection bags. All done in one or more factories. Once made, they have to get packed, loaded, shipped across the continent or the sea, unloaded and delivered to the place you buy one. The modern economy is a complicated web of production, transportation, storage capacity and division of labor among millions of people around the world. When it works, it works. But every step in any process is a chance for something to go wrong.
We all know about supply chain disruptions – analysts who dwell on them say all the inflation we’re seeing will disappear as soon as COVID recedes. Other analysts worry that inflation and lower volumes of manufacturing and services growth will lead to stagflation or even the big R-word: recession.
Nothing to date explains what’s happening in the employment market. We all know that millions of people were forced not to work or to work in very difficult situations. Analysts were relieved when unemployment bottomed last spring – it seemed like only a matter of time before the unemployment rate would drop to pre-pandemic levels. That just hasn’t happened. Derek Thompson who writes for the Atlantic Magazine has a few other R-words for the unprecedented number of labor force quitters: he calls it the Great Resignation. He has lots of explanations: leisure and hospitality workers are saying “to hell with this” on account of customers deciding to behave like a pack of escaped zoo animals. He calls it the Great Rudeness.
McKinsey & Company has conducted surveys in Australia, Canada, Singapore, the United Kingdom, and the US. Their surveys tell them that employees are reflecting on their purpose in life. Nearly half said that they are reconsidering the kind of work they do because of the pandemic. They want a renewed and revised sense of purpose in their work. They want social and interpersonal connections. They want to feel a sense of shared identity. Yes, they want pay, benefits, and perks, but more than that they want to feel valued by their organizations and managers. They want meaningful—though not necessarily in-person—interactions, not just transactions.
Thompson writes about the Great Reset: more families today work at home, cook at home, care for kids at home, entertain themselves at home, and even school their kids at home. For many, remote work is collapsing the boundary between work and life that was once delineated by the daily commute. Finally, there is a Great Reshuffling of people and businesses around the country. Migration to the suburbs is accelerating. Business formation has surged since the beginning of the pandemic, and the largest category by far is e-commerce.
The point is that there’s not just one thing in the economy that’s not working – the myriad complex systems that comprise it are seriously out of whack. As I said before, when it works, it works. But when it doesn’t, well, this is where we are.
George Friedman, who studies big geopolitical cycles, predicted in 2015 that the decade of the 2020s would be a decade of social and economic dysfunction and pain, and that political institutions would become unstable and ineffective. Last week he wrote, “ I had expected and predicted social dysfunction, but I had not expected the division to be along the lines of life versus death. I knew America would be filled with mutual loathing, but never thought it would be about face masks. I wrote of economic dysfunction. I did not imagine that the dysfunction would be caused by a virus that would disrupt life on a global scale, such that the economy would be wracked by shortages of fuel, parts and people… I wrote of all this, but when the future arrived I was unprepared for its enormous strangeness.”
It’s no wonder so many of us are stressed. Yet there is much in our lives we can control. These are the tasks on which we must focus. What else do we have to do? And what can be more important for our peace of mind?
Dian Cohen is an economist and a founding organizer of the Massawippi Valley Foundation.