How do you think the economy has been going the past couple of years? David Brooks and Marginal Revolution note that despite the fact that US economic growth has been fairly strong in recent years (ignoring the current credit market crisis) and that US income inequality is not only comparable to the reputedly more egalitarian European economies (and is in fact improving), there seems to be a general perception amongst the public that the US economic system is in shambles. While some of this can probably be attributed to the public falling out of favor with the Bush administration (and hence the years they’re associated with) and to misguided expectations that a strong economy would be like the late 1990s tech bubble, a big piece of this certainly pertains to anxiety from complexity.
While I am loathe to parrot the reactionary yearning for the “good ol’ simple days”, the truth is that the world we live in today is a brave new world very different from the one from only a few decades ago. Post-World War II America emerged as the uncontested military and economic power on the planet. Europe and Asia had no choice but to enrich America’s businesses and its people at little real risk to Americans. The tri-partite alliance between business, labor, and the government acted as a check against the extremes of socialism and of income inequality. The lack of the advanced telecommunications and infrastructure rendered cheap, long-distance, high-speed communication and transportation moot and hence kept everything local. You knew your neighbors. You all shopped at your neighborhood grocery store. You all read the same local newspaper, went to the same Church, had the same style homes and car, did the same type of job for many years in a row, etc. In short, simplicity was the name of the game.
Flash forward to the post-Cold War era. We now have more choices than most people know what to do with. You can choose between multiple major cell phone providers, in addition to niche players, in addition to the home phone service that you have on top of this new voice-over-IP thing. Each provider carries multiple plans each carrying pages of fine print which are intimidatingly incomprehensible — there are multiple phones to choose from with multiple, non-overlapping features — the phones also have multiple accessories that you can buy. And this is just talking about cell phone choice!
At their jobs, people now face an unprecedented degree of uncontrollable complexity. What once was a secure job protected by the triple alliance of business, labor, and government, has now been replaced by a system where all three members of that alliance have diminished in strength in the face of increased competition and complexity. Obstacles to career progression are no longer one’s colleagues and one’s boss, they are now the invisible millions in other cities, states, and countries each vying for top position. Detroit’s big three auto manufacturers have learned this the hard way — where once they could build and push new car models out at a leisurely pace and expect the consumers to buy whatever they sold, they are now facing the horror of an incomprehensibly (to them) efficient and high-quality Japanese auto industry. Labor, once able to make demands of a growing manufacturing sector, now find themselves choosing between the current economic well-being of their workers and the future competitiveness of their firm.
Increased globalization has led to much higher capital mobility and, as a side effect, much greater complexity in our lives. As late as the 1980s, mergers and acquisitions were rare and only executed by the largest of players acquiring moderate sized firms. The rise of hedge funds, investment banks, and private equity groups have changed this to the point where all but the largest of Fortune 500 companies are now accessible targets. This means that today’s employee is not only facing greater competition than ever before, but he/she is also facing the grim specter of being downsized by giant market forces that no layperson has any real understanding or control over. Three and four letter acronyms pertaining to arcane financial concepts now dictate the future of your job, not necessarily how well you got along with your boss or how hard you work. Gone are the personal relationships with your bank — these days your mortgage and bank accounts are in the hands of large institutions who see you as merely a cell in a spreadsheet.
Even things like healthcare have become increasingly complex. With fatalities from infectious diseases on the decline, the former “magic bullet” treatments (low side effects, high efficacy, rapid turnaround) such as penicillin are no longer the wonder treatments of healthcare productivity. Instead, because of modern antibiotics, humans now face diseases which cannot be truly treated, but only managed. This is a major improvement morally and medically from being completely unable to treat cancer and various viral infections, but the added complexity has added anxiety in terms of (1) avoiding the myriad risk factors for diseases where we don’t clearly comprehend the cause (cancer, heart disease, diabetes), (2) dealing with the stress and randomness which comes from being diagnosed with one of these conditions (e.g. you can be a lifelong smoker and not contract lung cancer, and you can be completely smoke-free and still get it), and (3) getting care (e.g. long periods of debilitating chemotherapy/watching what you eat for your whole life, etc).
On a foreign policy front, we see complexity has dramatically increased. No longer is the enemy of the United States clearly the Godless forces of Soviet and Chinese communism, the enemy today is a faceless group of terrorists. And, unlike the Communists, they do not all report to the Kremlin, they are decentralized, belong to different (and oftentimes conflicting) groups with different views and methods. The big threat is no longer the simple instant and massive destruction via nuclear bomb, but the potential destruction of a building, of infrastructure, of our comfort zone.
So yes, we have more money. The era of history which showed a reasonable chance of complete nuclear annihilation ended. We have more understanding. More choices. More power. But with it, we have so much complexity — no wonder people are anxious.