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In Praise of Failure

Jeffrey Tucker

Posted July 28, 2022

Jeffrey Tucker

Every major investment banking house has sent out communications to its clients to provide a real-time assessment of why so many people have lost so much money. These are interesting to read. They are perhaps more truthful than one would expect, in fact. 

The latest is from Goldman Sachs. It fascinates me how the economists there do their economics. They work not from theory, not from fundamentals, but purely from probabilities based on history. Based on this, Goldman has discerned a 30% probability of a near-term recession. That seems low, but at least they are admitting the incredibly obvious point that the whole economy is slipping into the territory of doomed. 

And they add reasonable speculation that the money in the next few years will be made in energy, food, and commodities generally, the stuff the people need to live. Think about what people have to consume and there’s your answer to what one of the world’s largest investment banking firms thinks will be the highest performing assets. 

But the whole topic also gives rise to a different issue. It concerns the efforts on the part of governments and central banks to stop the inevitable by resorting to means that have never once worked in the past. Governments don’t work based on probability theory; they work based on keeping danger to themselves at bay. 

No way will they just let the recession unfold naturally, shake it off, and move on. Instead, they will sling around every conceivable policy nostrum from their grab bag to stop it, same as with the virus they could not control but tried to control anyway. 

And over the last decades, this general ethos of safety first seems to have become the entire prevailing philosophy of the West, afflicting generations of people under 40 years old. 

Never Take a Risk 

The whole subject occurred to me when reflecting on this new policy ethos and how pervasive it is in the culture. It is likely a product of prosperity. Probably one-third of the public has been raised without the usual risks and stresses that defined life in previous generations. The trouble is that this is not real. The illusion of a risk-free and still happy life is a myth, created by adults who want to make the best possible world for children. 

The trouble starts as this same ethos continues to shape parental habits as children get older. Then the birthday parties start. You know this if you have kids: classic competitive games are practically banned now. No more musical chairs. No more pin the tail on the donkey. Everyone has to be a winner all the time. It’s true even in sports for kids. Everyone has a chance. No strikeouts allowed. No one is better or worse than anyone else. And don’t get me started on the participation trophies!

It continues throughout education, in which now the curriculum is adapted to the students rather than the reverse. This is because trying and achieving has been deemed too stressful and impactful on delicate young psyches. 

The issue continues through college, which has turned into a four-year vacation from reality, paid by someone else’s credit card. Then they hit the workplace and bring the same now-deeply-embedded fear of discomfort, complaining to HR about every not-safe thing that happens. 

And then the same people bring this attitude to politics, voting only for candidates that promise to continue the same safety priority to everything, from climate to disease to economics. 

This ethos creates safety and assuredness, to be sure, but also boredom and dependency. It also instills an allergy to all risks. That is not friendly to capitalism. In fact, it leans people toward socialism. Ironically the impulse toward socialism comes not from the working class and poor but from the privileged and rich. They are the ones seeking the safety of despotism over the riskiness of freedom. 

How to Fix This 

The trouble is profound and pervasive, which we discovered during the pandemic when the most masked and afraid were 20-somethings who hail from financial privilege and for whom the stress of the traffic of driving to work was the most intense they had ever faced. So staying home and staying safe worked just fine for them. 

This is a deep philosophical problem that afflicts the West today, that longing for a world of maximum comfort, high income, and as little work as possible. Lockdowns were a perfect world for them. 

How to fix this? Well, the problem might fix itself in time. The truth is that the real world cannot be forever made safe. To live means to accept danger to some degree. And we are likely to be surrounded by it very soon, as all the systems designed to promote infinitive prosperity, with no work or sacrifice are all failing. Inflation is a virus that is eating paychecks and has a whole generation panicked about the future. Rightly so. 

Parenting 

If you are a parent of young children, I have a suggestion. Put them to work. Help them experience discomfort and difficulty early on. As they get older, resist the temptation to coddle them forever. Let them fail. Consider even the most difficult thing of all: a straight-up financial cut-off. No more co-signed notes. No more paying the cell phone bill. No more endless access to the family funds. Yes, this can create loathing but it is short-term. They will thank you in the end. 

The systems of safety built up over decades will not protect people for much longer. We are headed to a world that restores the natural order of things, one in which those who dare, gain the reward. And those who do that must also experience failure too, and all the pain that comes with that. 

In Praise of Failure 

There should be another word besides “failure” to describe what I’m talking about. When business doesn’t go as one hoped, when plans don’t turn out, when you have to take lumps and learn to adapt to new realities, that is just part of life. A life without what we call “failure” is a life without adventure, even without meaning at all. That’s what so many have tried to manufacture, but now we see how this vision is running against the brick wall of reality. 

The reality is hitting oddly quickly, with something most living people have never experienced: both inflation and recession. Staying ahead of this vice grip is not easy. No system we can construct can provide perfect protection. It will be this generation’s crucible. Maybe it ends with the realization that there are just some forces at work in the world that neither government nor central banks nor parents can control. 

Not even Goldman Sachs. 

Regards,

Jeffrey Tucker

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