History has shown us that most people only behave wisely once they have exhausted all other alternatives. Be warned.
As a new economic era begins, many people are looking back at what went wrong and trying to identify what led to the latest financial meltdown. But did we not see it coming? Although everyone seems to have had an opinion on the potential foreboding gloom and doom, many were caught out when the tide turned. No one could have picked the day the stock market would start its dramatic decline, but all the signs were there, pointing to some sort of looming disaster. The result is that many people are no longer going to be able to enjoy the wealth they thought they had carefully accumulated.
Everything in life has its natural cycles, and people that know their history should be able to see crisis coming well in advance. The factors that lead to a meltdown are always present. A few years ago Jard Diamond released a book titled ‘Collapse’, in which he studied historical meltdowns and predicted future trends, looking for clear tell-tale signs of potential disaster.
Although many business leaders would have Jim Collins books about building great organizations high on their reading list, how many focus on the other side of the coin – on how organizations and societies fumble and fall and what the predictive signs are? These signs are there every time, but does our blind optimism prevent us from seeing the inevitable and putting measures in place to avoid the pot holes? Do we look at these signs as if they are from another time and place, or can we recognize them easily in our own circumstances, even in our own organizations.
Machiavelli has said that, “Whoever wishes to foresee the future must consult the past; for human events ever resemble those of preceding times. This arises from the fact that they are produced by men who ever have been, and ever shall be, animated by the same passions, and thus they necessarily have the same results.” So what passions are now in play that may have led to similar crises in the past?
Let’s explore two interesting accounts of crumbling civilizations of the past to discover what may have led to the crisis today:
1). The Bricks of Babel: Thousands of years ago….
The July 2008 issue of the Economist magazine had an image of the Tower of Babel on its front cover, the lead in to an article which used a significant story from the past (an old testament story from the Christian bible) to reveal the passions that can lead to a meltdown. It cleverly outlines the individual desires which can hamper collaborative achievement. Was the tower of Babel the first recorded societal meltdown? Where the same signs present then as they are now? If so, what can we learn from this snapshot of the past to ensure prevention for the future, or will we be doomed in a cycle of repeated meltdowns, caused a lack of collaboration due to a strong self-focus.
Professor Charles Birch** has written a very compelling article (with an excerpt below) to help us understand what may have caused this first crisis. He describes how the society, according to the story in the book of Genesis, was well on the way to getting a mighty tower built, before disaster struck:
“There seemed nothing too hard for them to do. The sorry end of the story is well known. They no longer spoke one language and so could no longer understand one another. They stopped building the town which was called Babel and the great tower they had planned at its center. The magnitude and complexity of the offending tower involved specialists of all sorts, each with a special terminology and set of beliefs. So it was quite impossible for the engineers to understand what the priests were talking about, for the brick makers to share the architects’ vision, for the philosophers to agree on the function of the tower and for the conservationists and poets to overcome their revulsion against such a monstrous desecration. The higher the tower grew the more violent the disputes between the builders became. Eventually all communication broke down. Whatever purpose they may have started with vanished into thin air.”
The parable of the tower represents the human intellectual predicament we apparently find ourselves in today. ‘We seem to be compelled to shape facts and data, as we know them, into hard bricks, and stick them together with the slime of our theories and beliefs. And thus we continue to carry bricks to Babel.’ (Koestler). Today’s ‘experts’ appear to be confined to their standard approaches and responses, and it is becoming clear that only broad innovative ‘thinkers’ will be able to extract us from this mess.
“We build a tower of Babel when we suppose that knowledge is like a jigsaw puzzle. The bits and pieces are the bits of knowledge that the disciplines give us. When we try to fit them together they don’t fit. They don’t form a complete picture at all. That’s what happens when we opt for the substantialist (substance) prejudice in the field of knowledge. Knowledge is not a substance. It cannot be treated as such without great distortion. This is precisely the intellectual dilemma so powerfully symbolized in the parable of the tower. There is a difference between an expert and a thinker. An expert confines his thinking within arbitrary boundaries. A thinker sets no boundaries to his thinking. The expert can’t think across boundaries.” (Birch)
2) What happened to WAT?: Hundreds of years ago…..
Hundreds of years ago, there was a society that believed themselves to be invincible. They had developed a complex and elaborate civilization. Nothing could go wrong… or so they thought. Angkor WAT, the symbol of one of the greatest civilizations of all time – the Khmer civilization – fell into ruin and became derelict almost overnight. There is great debate about the exact cause of its downfall, but one of the main theories is that the rulers of the time got too greedy. They spent more time building the grand temple than caring for their society. They stopped putting money and resources into developing the aqueducts and farming the land and diverted it to the central temples instead. In the end the city destroyed itself from the outside in, but by the time the crisis caught up with those at the top it was too late.
In the last decade, with our race to build wealth, history may have repeated itself. Individuals have again started to try to build their own holy temples as symbols of personal power at the expense of communal well-being, oblivious to the danger signs and ignoring the lessons from the past. Compelled by ‘experts’ to ‘borrow, borrow, borrow’ and disregarding warnings about over-borrowing, in this process many people have focused on amassing bricks without a having strong mortar to build with.
Experts have all had their theories about how to make money fast, but few were willing or able to see the big picture. Not wanting to be left behind, banks have borrowed from each other (not even adequately checking credit ratings) in a bid to ‘lend, lend, lend’ to those wanting to ‘borrow, borrow, borrow’. All were hoping to cash in on the new temple, and the building of a civilization based on elaborate facades rather than solid foundations. Ironically the higher the experts have gone, the less anyone has seemed to care about the foundations.
In October 2008 the capitalist foundations we have based our civilization on crumbled, just as the tower of Babel and Angkor WAT had crumbled many years before. Did we really think we were invincible?
“Experts provide us with a wealth of information. They load the table with countless pieces of the jig-saw puzzle. How to put them together when they don’t fit? That’s our problem. Hence T. S. Eliot’s questioning in Choruses from ‘The Rock’:
Where is the life we have lost in the living,
Where is the wisdom we have lost in knowledge,
Where is the knowledge we have lost in information?” (Birch)
Jared Dimond says that a society is at its most vulnerable when it least realizes it, when it thinks it is invincible. By focusing on the pinnacle of achievements while ignoring the foundations, our society may have become vulnerable in ways we never expected.
Bill Clinton has been quoted as saying, “The more complex societies get and the more complex the networks of interdependence within and beyond community and national borders get, the more people are forced in their own interests to find non-zero-sum solutions.” It seems our best choice is to learn to consider collaborative solutions. It’s a shame it often takes a crisis to remind us of our need for interdependence. The worldwide ramifications of the sub prime crisis have reminded us again that ‘no one is an island’.
Through the ages philosophers have wondered: Do we only learn from history that we never learn anything from history, and are those who cannot learn from history doomed to repeat it? We can be almost certain of being wrong about the future if we are wrong about the past. As the cycle continues, may the wise have the courage to find solutions with better foundations before the next crisis hits….
©2009 by Andrew Grant