Taking Stock

Taking Stock

The current state of shock in which many Americans find themselves over the meltdown of U.S. capital markets is very similar to the reactions of my colleagues in the Soviet Union where I worked from 1986 to 1997. Though not quite expressed as colloquially, the question on everyone's mind now, as it was then, is: How could things go south so quickly?

Although cracks were appearing in the Soviet Union as early as 1985, the entire Soviet edifice came apart in just a few months in 1991. The collapse was devastating to my Russian friends. It was as though they woke up one morning to find out everything they knew to be true was a lie.

These folks were pretty cynical to begin with, but part of them did, or at least wanted to, believe the propaganda about the greatness of the USSR. A popular joke at the time went: "What's the difference between a Russian optimist and a Russian pessimist? The Russian pessimist doesn't think things could possibly get any worse, while the Russian optimist is positive they will."

As devastating as it can be, I'm a big fan of disillusionment.

As a boy, I learned the hard way the danger of living with illusion. I was a chubby little Boy Scout in California, newly transplanted from Mexico where I had developed an affinity for refried beans, deep fat fried tacos de pollo and agua dulce, Spanish for water with about 20 teaspoons of sugar in it.

Things went south fast. //
Each year the troop would go on a weeklong 50-mile hiking trip in the Sierra Nevada Mountains of California. All hikers were required to do a series of preparatory hikes of increasing length. For reasons I don't recall, I missed the majority of these hikes. I promised to make them up, which I did…sort of. Where I thought I was doing the requisite hikes of 5 to 9 miles, in reality I was hiking between 2 to 5 miles. I was sure I was ready.

Out in the wilderness my illusions and I were left without any excuses and on the second day I collapsed from heatstroke. I delayed the day's hike so that we didn't get in until dark and most of my pack's weight had to be distributed among the adults.

My illusion of preparation had endangered the group and myself. Although I got stronger as the trip went on and eventually "carried my weight," this trip was the most humiliating event of my life. But being confronted by my own false self-image, the hike also ended up being one of the most liberating events of my life. Taking stock after that trip, I vowed never to let it happen again.

So, as we wade out into the wilderness of growing environmental calamity and financial turmoil, will we be able to "carry our weight," or will we continue to ignore the collapse of our illusions? Maybe now would be a good time for us to take stock as a species, as a civilization.

How are we doing in the currency of human law, which I define as politics, ego-nomics and habit? A recent study by the University of Michigan found that world happiness has grown over the last 30 years, principally due to increases in perceived freedoms and tolerance. Rising global wealth also contributed, though once per capita income reaches $15,000 per year, its effect on happiness becomes minimal.
Mountain hikers carry their own weight. //
So, has the relentless pursuit of ego-nomics — or consequence-free accumulation and consumption —as epitomized by Bernard Madoff, made us happier? I think the clear answer is "no."

Interestingly we have defined wealth in terms of accumulation of money and goods, instead of defining it as how the money is spent. The latest wave of mortgage foreclosures is in the second home and speculative home market, which in 2006 formed nearly 40 percent of the new home sales. Does the spending on a second home that sits empty most of the time contribute more to wealth than taking a dream vacation, a contribution to charity or learning a new skill?

Maybe now is the time to redefine wealth as "the satisfaction of desires." As we cultivate fewer desires, our satisfaction increases, our wealth increases and our impact on the planet decreases.

The lessons that should be learned from the global financial crisis are identical to the lessons that will bring us into balance with the planet. Living within our means, which is to say living with "flows," whether it is money, renewable energy or rainfall, instead of dipping into "stocks," such as home equity, fossil fuels or aquifers.

If we don't make these hard choices, the "banker" — both ego-nomic and eco-nomic — will make them for us. At least we can negotiate with a human being; Nature (chemistry, biology and physics) is not nearly as forgiving.

Rob Watson is the Executive Editor of, and the chairman, CEO & Chief Scientist of the EcoTech International Group.