Listening to an interview with an Iranian-American journalist about being detained in jails in Damascus and Tehran, I was struck by the contrast between the extremis of those experiences and the daily drumbeat of high emotions about money.
The level of hyperbole in our daily discussion of markets, economics, personal finance and public policy is on par with that which we use to discuss war in Libya and Afghanistan, the suppression of political dissent in China, the crime that still afflicts many troubled communities, and dire poverty in India, Haiti and throughout the world. Markets “plunge;” investors are “wiped out;” public coffers are “in a perilous state;” the credit rating of the United States risks being “destroyed” by a looming default.
I too have been guilty of using this kind of rhetoric at times, but it is vital at least to be aware that a decline in the value of our 401(k) is categorically distinct from, say, people being mowed down by security forces in Hama or Misrata.
Even in the context of our own history, the stakes are less than they used to be. Before the creation of modern individual bankruptcy protections, for example, when you went bankrupt, all of your assets would likely be seized. Today, debtors are allowed to shelter many of their basic possessions.
Likewise, before the creation of the Federal Deposit Insurance Corporation during the New Deal, when a bank failed, you lost every penny of your assets. The expression “run on the banks” exists because in the 19th century, when depositors became anxious that a bank might fail, they literally ran to the bank to get their money. The last ones there faced empty vaults and a complete loss of assets.
And these days, to be jobless is rarely to be homeless. In fact, most homelessness in the U.S. today is a result of slashed state mental health budgets, which in decades past were used to house the mentally ill in state institutions.
None of this is to downplay the fact that money and possessions tap our deepest emotions, from greed to fear to attachment. Behavioral psychologists such as Daniel Kahneman and Dan Ariely have long noted that money arouses emotions every bit as intense as physical threat. In short, whatever the material reality, people experience the ebb and flow of their economic fortunes with emotional intensity comparable to that of prison detainees greeting the prospect of torture or hospital patients facing surgery.
But unlike those facing state repression or serious illness, we have the capacity to step off the emotional roller coaster of money. Doing so won’t change the real material challenges we face. Pretending that the consequences of massive unemployment and underemployment aren’t socially debilitating would be foolish. But it does us no good to be completely subsumed in the emotions of money, or to ignore the profound differences between most of human history – when societies strove simply for sufficient food, security and survival – and the present. The stakes are high, but not as high as we often believe.
This is true whether you have just enough to get by (as was true for me for much of my life) or more than sufficient to meet ones’ needs (as is true for me now). It is easier to have more, no question. And it is hard and often deeply unfair not to have enough. But the only way we can, collectively, provide adequate security and material well-being for everyone is to invest, spend and save in a manner that is not in thrall to our most intense fears, desires and emotions. Those will always be part of the mix, but they cannot be our only guides.