Adam Smith’s The Wealth of Nations is widely cited as the founding document of industry and classical economics. What’s most striking about this old treasure is just how little has changed. The Enron collapse of 2001 followed almost exactly the evolution of the Mississippi Bubble of 1720. We look at the world and see change, increased violence, environmental concerns, wars, famine, boom-and-bust cycles and stock-market euphoria followed by widespread panic. There’s a sense that the world is somehow getting worse. And yet nothing much has changed at all. We’re concerned about binge drinking and yet Smith talks about the multitude of alehouses and the ‘disposition to drunkenness among the common people’. At the time of writing the world is in financial crisis. This particular crisis, while exceptionally bad, is not the first and it probably won’t be the last. Adam Smith warns of the need for banking regulation, a prediction as relevant today as it was then.
He also writes of, ‘the extraordinary expense of fuel’ and yet it’s still a current issue. We are also warned about the ‘Avarice and ambition of the rich, hatred of labour and the love of present ease and enjoyment’—both still major themes in our society. Look at the banking chiefs, city traders and benefit queues, if you don’t believe me!
If we forget religious storytelling for a moment and concentrate on the facts, we can prove that the world has existed for millions of years, with human beings evolving for a great many of them. In the continuum of that lifespan we are still infants and so the repetition of history makes sense. Like a small child, we repeat a task over and over until finally our little brain thinks, ‘Mmm this hurts, I think I might stop.’ Unfortunately, as we brace ourselves for what many are calling Financial Armageddon, our collective penchant for hitting our head off the same wall seems far from over.
Sadly evolutionary psychology shows that we are still driven by the same basic emotions of our cave-dwelling ancestors. Fear and greed still drive human nature; corruption by those in positions of power is expected. Lies and broken promises become the staple diet of politics and the selfish pursuit of all things ‘me’ is admired. Bigger houses, faster cars, more clothes and bigger TVs go hand in hand with more stress, more envy, less love, less time, shallower relationships and greater isolation. Which begs the question - what’s it all for? Are we evolving in the right direction?
Perhaps the financial crisis of 2007–2009 will end up becoming the wakeup call that the Western world so desperately needs. Maybe it will herald a much-needed psychological adjustment in the way we view and live our lives. Perhaps home entertainment systems will be substituted with conversation and a desire for connection with family and friends replace the selfish lust for money at any cost. We might even start to reverse the damage we have collectively done to this planet and realise that plundering resources in the name of profit for another trinket or toy isn’t anything like as rewarding as being able to swim in clean oceans, watch the sun set on a winter’s evening or walk through the countryside with your family. To paraphrase the American rock band R.E.M: Maybe the end of the financial world as we know it will have us all feeling just fine … eventually!