It’s starting to feel a lot like the story of “Peter and the Wolf” isn’t it? At the end of the day, what does a bailout for Greece even mean? What is it that is really being saved in the long run; a World Economy, an Economic Union, a Sovereign Nation, a failed attempt at Socialism, or the liberty of Greeks as individuals to govern themselves? Or do we look at it as something more sinister, such as a foreign power using economic leverage to subtly take away the sovereignty of a nation without firing a single shot, while trying to look like a savior to the nation that was just conquered? Is there deception in the air? Sometimes things that appear to honor you are intended to destroy you.
I don’t want to get caught up in the Greek issue specifically, but it leads into somewhat of an epiphany I had lately about how people visually represent Maslow’s Hierarchy of Needs, and how that might pertain to the economics of today:
First, is that mass psychology of a social unit tends to also follow ‘Maslow’s Hierarchy of Needs’ to some degree, not just the individual. As a developing nation, you will first focus on the basic needs of your people, which Maslow referred to as Physiological (food, water, sleep, homeostasis) and Safety (safety of body, employment, resources, health) and I must assume a degree of sovereignty is implied in these levels. If you do not have these resources, you will either attempt to attack a nation that has them in order to survive, or you will perish. A nation will grow into its social stages and eventually seek self-actualization by trying to provide (although it appears it is often by force) a path to other nations to reach the same self-actualization (that is self-actualization as interpreted by the egocentric nation pushing it.) Strangely, a nation will often try to secure lower level needs by throwing a shroud of ’self-actualization’ over the intent, such that the people find it easier to swallow. In other cases, I think it is possible that you can get so caught up in maintaining your visions of self-actualization, even as a collective social unit, that you can start to neglect your lower level needs. I think after a few thousand years of Greek history and myths, the Greeks, of all people, have fallen prey to this last scenario, which leads into the next observation.
Second is that Maslow’s hierarchy is often portrayed in the shape of a pyramid, with the most fundamental needs at the base level on the bottom, and the need for self-actualization at the top. The idea being that, as you achieve and maintain comfort at a specific level, you then work your way up the pyramid to the next level, at some point reaching the peak. What had not occurred to me before is that, when looking at it as a climb up the side of a mountain, past the precipice of the peak there is a sharp slide down to the bottom on the other side. Now, maybe the levels were volume based on relevance to a person’s overall motivations and desires when being envisioned as a pyramid, or maybe it was a subconscious depiction knowing that the less important something is to our actual survival, the harder it is to maintain. It isn’t represented as a square, such that once you reach self-actualization you have a nice platform on which you may rest. You are on a pointed peak that requires great balance and an abundance of your concentration. From a psychological perspective you are in a terrible position because your attention is distracted and you begin to take the lower levels for granted, not realizing when the bottom is falling out from under you until it is too late. From a scientific perspective, momentum is suddenly working heavily against you, keeping in line with the concept that the bigger you are the harder you fall. From an economic perspective, you become a sitting duck to other nations who want your remaining resources, because you are preoccupied with a sense of philanthropy. The Greeks were so focused on their self-actualization, they were oblivious to the fact that their foundation of the lowest level of needs was crumbling. With just a small slight of hand, the coveted vacation spot may soon be known as the German Isles.
But how does this really relate to economics today? Along with an incline, a peak, and subsequent decline in what I would refer to cumulatively as the Information Technology Revolution and its subsequent bubble, there has also been a parallel journey up the incline of the pyramid of ‘Maslow’s Hierarchy of Needs’, a peak, and now a quick decline down the other side back towards the basic necessities of life. It appears to me that most industrialized nations, after 15 years of easy money bubble markets and exponential technological growth, have become stuck in self-actualization and do not realize they are actually quickly sliding down the far side of the pyramid. Just as it takes people time to acclimate to a new economic reality, they are forced to acclimate to being on a new level of the pyramid. It appears the governments are still striving for globalization, while the people want their government to save “them”, not save the world. When there is a disconnect that large between the people and their government, people do not feel they can vote it away, and the people revolt. The first signs of it showed up with the Greeks, who individually do not want to accept extreme austerity measures for the benefit of individuals residing in the rest of the European Union. The point being that social unrest is replacing globalization as the new economic trend, and it is a bubble that is just beginning.
As people worldwide are beginning to rebel, some governments are crumbling and other governments are quickly jockeying for power in an attempt to come out of this as the new world superpower. Allegiances among nations appear to be quickly changing, and globalization may once again quickly stagnate as people demand that their governments prioritize their economic survival over the survival of foreign nations. Crumbling governments also restrict information to the people, in order to limit propaganda which entices them to rebel, and limit their ability to congregate in order to rebel. Governments in fear of revolt begin to take away your freedoms. As governments provide fewer social services, people will have less leisure time with a shift back towards actual labor for survival. Employers will most likely demand a higher level of work and less acceptance of personal internet usage. In scenarios such as the current societal trends, people tend to focus more on circles of close family and friends and less on acquaintances. There is an undisputable trend away from “the easy life” we had for a decade and a half, and once again away from globalization.
So what seems to be the epitome of representing the absolute peak of this pyramidal trend, and the paradigm shift we are about to experience? It will most likely go down in history as being Facebook. It represents a peak in globalization, a peak in socialization, a peak in information technology, a peak in entrepreneurship, a peak in maximizing revenue from the intangible and a peak in the masses providing the bulk of the resources (content) for the benefit of the few (Facebook Inc) once again in history. Facebook’s existence relies upon its 845 million users globally to provide the content with which Facebook makes an advertising revenue stream, yet we have seen how easy it is for a government to shut off access to a specific website, or the entire internet, to an entire nation. In reality, restrictions to Facebook’s website are in essence controlled by individual governments primarily and only secondarily by Facebook themselves. China doesn’t care if U.S. stock holders of Facebook get hurt if they restrict Facebook access to the Chinese…and why should they? Facebook is already being acknowledged as a political tool which has helped topple regimes across the Middle East, do you think these governments will continue to allow access under those circumstances in the future, when governments themselves feel threatened? People will most likely have less and less time to play on the internet, as employers demand that employees once again work in order to increase profit margins. People may be more likely to start using it for political propaganda, and less for leisure, thus increasing the odds that you will be restricted or monitored. If Facebook already dictates how you may and may not interact with your peers on their website, how much effort do you think it would take to restrict certain topics of discussion entirely? Once you have reconnected with an old peer, do you really need Facebook to maintain it, and if you don’t care to interact with that peer by other methods, did you need to reconnect with them at all or was it really just a superficial addition to the quality of your life? As governments tend to monitor social media to a greater extent to search for potential threats, and demand more power to fight a perceived threat without trial, do you think people will continue to be so free in their posts and providing content that displays their personal beliefs? Will people continue to frequent the site as their freedoms of speech become more and more restricted, and the risks of doing so become greater? Without the user provided content, where is the revenue stream? Facebook’s profit last year was about 1% of the estimated value of the IPO. If this is truly the peak of the “need” for Facebook, and it can’t find a way past the obvious obstacles towards accelerating that growth, which the current trend suggests may arise, then that is a long time to wait for a return on investment. There aren’t that many barriers to entry with social media and people are fickle, do I even need to say the word MySpace? Is Facebook really a service that you feel the current 845 million users can’t live without nor could never be restricted from, in order to validate the $100 billion valuation, which is based solely on advertising revenue in a declining consumer market and driven purely by a users willingness to upload personal content?
Which once again brings us back to the Greeks, and a reference to another relevant story. The Greeks had spent 10 years trying to conquer Troy, just as Facebook has spent about the same amount of time trying to conquer the masses. The Greeks knew that the circumstances that allowed them to continue an attack on Troy were coming to an end. As somewhat of a “Hail Mary” to keep their efforts from being spent in vain, they came up with the idea that is now known as the “Trojan Horse.” To the Trojans, the Greek’s parting gift of the wooden horse appeared to be a representation of the Greek’s self-actualization as an offering for the goddess Athena, which appealed to the Trojans own self-actualization as well. What it turned out to be was the catalyst the Greeks used to remove the Trojans from their basic needs of survival. The Trojans were entranced with the wrong part of the pyramid, as many seem to be today. Ironically, the Trojans must have also believed the phrase “Greek Bailout Imminent”, in order to fall for the ruse. I think Facebook realizes that the circumstances that allowed them to continue an attack on the masses with social media are also coming to an end, and now they present you with a “Trojan Horse” which they are calling an Initial Public Offering. They’ll pitch you the peak of the pyramid, but watch out for the crumbling foundation.