A Balance
Balance — the importance, I should say — is it so unapparent to us as humans, or do we simply ignore it? If chocolate is delicious, should we eat all that we possibly can, as quickly as we can?
Humanity in general seems to have a tendency to move in the direction of extremities. Call it crowd psychology, but the US political system is based on the same tendencies. A pendulum of socialist versus capitalist ideals swings to and fro, creating an almost predictable pattern of Congressional and Presidential offices. (On a tangent note, I don’t know if I’d mentioned it here on my blog in the past, but I claimed victory for Senator Barack Obama when he won the Democratic nomination. I still voted for McCain, but vainly, knowing that our recent economic situations would be blamed upon capitalists. I’m not proud to be correct — I’d rather have been wrong — but it does demonstrate my point.) When the people are happy, they ask for more of the same, until we reach such an extreme that everyone’s stomach is aching in pain, and the outcry is great enough to push us in the opposite direction. Thus, the cycle continues.
Take, as another example, the state of the US economy in the 1870s, just prior to unions and a consumer-based economy. During this era of American history, our economic climate would be considered a “business-to-business” economy, where one business existed to supply goods or services to another. The natural result of this was two-fold: first, the entire economy was based on several resources (oil, steel, and railroad transportation), which meant that the economy was poorly diversified; second, and more to my point, the consumer or, as I refer to them, “little people,” were essentially ignored in terms of health, prosperity, and potential success. Sweatshops, child labor, workman’s compensation, insurance, and so on were poorly regulated and largely without legislation. This extreme pro-business, anti-consumer economy naturally led to a public outcry, which caused the formation of unions and ultimately the implementation of laws and regulations at both state and federal levels to protect the public. I’m not claiming this to be a bad thing, but any business owner will tell you that the cost of doing business is extremely high purely do to two primary factors: legislation (taxes and regulation) and payroll (which includes insurance policies, workman’s compensation, and so on), and these factors are closely tied together. Allow me to reiterate: this isn’t necessarily a bad thing if in good measure, but I’ve had conversations with many of my great friends at Starbucks who have come to expect their employer to not only pay them, but support them in other circumstances. It sounds like a great idea for the workers, but the workers are merely small vessels: the real money that is being moved is going through the large company, and it isn’t about whether Starbucks makes money or not — if they provide a product or service that people want, the market will naturally keep the company alive — but rather the fact that money is moving through the economic system. This movement creates additional incomes for the government in the form of taxes (they have their place and should be paid duly) and furthermore allows the investing and expansion of economic activity for both Starbucks and related (or unrelated, as witnessed by Starbucks’ contract with Apple for the iTunes free song of the week or the Starbucks Music franchise) areas of the economy. It is what allows growth. By forcing unreasonable expectations upon a company in the interest of protecting consumers, the government essentially caps economic activity. This is bad when these protective laws become outrageous.
It doesn’t stop there, however. The company I’ve been using in this example is Starbucks, but what about small businesses, entrepreneurs, or new start-ups? These companies often require low overhead in order to procure profits and prove their business to be profitable (or convince venture capitalists, but that’s a different subject beyond the scope of this entry, which has already expanded vastly beyond my original intentions). If you have laws in place that are too extreme, the number of new businesses created is reduced significantly, which results in a less diversified economy. The more diversified an economy, as we all know, the more resilient it is to market crashes; take for example, the current economic situation, which is based largely on sub-prime mortgages and bad loans. Our economy was over-leveraged and poorly diversified, as all the institutions took the same trade (that is, all bought the same type of instrument), assuming that no significant amount of loans would default to cause any problems, but that assumption was based on the fact that real estate prices had gone up consistently in the past and the very incorrect belief that they would continue to do so indefinitely. Fortunately, the remainder of the US economy is diversified enough to withstand a large portion of the problem, but how long can it withstand such a heavy blow? In any case, more diversification helps to mitigate these types of economic bubbles. Why would you prevent that by instituting laws that limit the feasibility of creating new business (and new jobs, and new wealth, and the list goes on).
Now, I’ve said all of that to come back to my original point about balance. When the economy in the 1870s was so extremely centered around businesses, the people pushed back and got what they wanted. That’s fine that it was brought into balance. However, the way that people think nowadays is that the company they work for owes them something; it’s a very unfair sense of entitlement. The company you work for owes you nothing more than what you work for, and that amount can be negotiated or other benefits may apply instead (i.e., your hourly rate may be lower at Company A than Company B, but Company A provides better benefits). We seem to be approaching the extreme of pro-consumer, anti-business, and I anticipate that the next four to eight years may be very difficult for businesses and our economy in general. However, a decade or two from today, I fully expect another shift in the direction of businesses. Unless he’s just taking a huge bet, I’m in agreement with Warren Buffet, who recently bought Goldman-Sachs in a long-term position, betting (and I use the word “bet” here loosely) that the market will be higher in a decade or so. (Correct me if I got the details wrong.)
I’ve thus far used economics, politics, and crowd psychology (a.k.a. voting) as examples to make my point that balance is critical. Let’s take a physical example: an acrobat walking a tight rope balances himself by shifting his weight and adjusting as gravity pulls him downward on one side or the other. If he reaches one extreme or the other, he falls, and I can imagine the ensuing pain is unbearable. It’s very delicate. Let’s take a better physical example: riding a bike. As long as you’re moving forward and shifting yourself appropriately, you’ll avoid falling to one side or the other. If you stop moving altogether, it’s much the same as reaching one extreme or the other. You don’t fall forward, but you won’t be able to balance without movement (I’ll avoid making another reference to economics here, but feel free to connect the dots).
Going out would be another great example — and I’ll use my personal experiences here, but feel free to fill in the blanks. Personally, I am an “at home” type of person. I wouldn’t say “indoors,” as I very much enjoy sports, swimming, and other athletic activities, but I enjoy them at home. Going out to the movies, the park, the store, a party, a concert — they are fun, but my preference is generally to stay home. This isn’t a bad trait, but neither is preferring to go out. What is a bad trait is taking it to an extreme, a familiar theme. I recently noticed this pattern vividly in my own life. The less I go out, the less I feel good about myself as a person, and the less motivated I am to work — the less happy I am. The result, of course, is that I’ve seen this and have begun planning to go out more frequently. Mind you, I won’t be going out every night for four hours, as that would take it to the opposite extreme and result in other unfavorable symptoms, but going out more will allow me to live my life, and have stories that I lived, and have experiences that are invaluable, and see new things, and meet new people… There are many things that need to be part of my life, if for nothing other than psychological reasons (“feel good” emotions). Experiencing these emotions seems to be very important to maintaining a productive lifestyle. If I feel like crap, it’s reflected in my work, my relationships, and my inability to enjoy any free time I may have. Conversely, the more elated I feel, the more motivated I am to work, the more positive I am around my friends and family (and, as a result, the better they feel), and the more I can enjoy the free time that I spend.
Balance — or the importance thereof, I should say — is overlooked so easily, and why? We see something want, we taste it, our appetites are whetted, and we pursue it; we bite, and we’re hooked, but what lies at the end of the line is a knife and a frying pan. It’s important to evaluate your position and center yourself at the peak of the bell curve — change is good, adjustments are needed, but too much (i.e., over-compensating) can be painful and irreparable.