Cyprus is my island
When the going’s rough
I would love to find you
Somewhere in a place like that
David Bowie, ‘Move On’
I wonder how many retirees in Cyprus imagined they would be facing the possibility that their life savings would be either, arbitrarily taken by the government, or vanish in a run on the banks, or disappear when the bank’s go bankrupt. Makes the adage saving for a rainy day bad advice.
Regardless of the outcome, people all over the world are now wondering if the same thing could happen to them.
Uncertainty about the future will have a greater impact on societies than any new technology. When the future is unknown, or perceived as threatening, everyone goes into survival mode. Look at any company that is teetering on the brink of closing down.
Human experience and wisdom is based on the events that happened to the previous generation (the parents) and themselves. Children are still being told today that by getting good grades, going to college, working hard in a career, buying a house and saving for retirement, all will be well. College costs are exceeding the benefit. The value of a degree is declining. Very few people will have a career but several. Working hard is necessary just to stay employed. Nothing is too big to fail and unemployment can happen at any point. Home values collapsed. Now the final piece, saving for a retirement is called into doubt.
Uncertainty at the societal level shakes one’s faith in institutions. To continue with retirement savings, it is built on the premise that the current economic structure or something similar, will be in place in the future. But what if it is not?
There is the old saying that generals are always preparing for the previous war. Generations have been prepared to live a life that is fading away. The ensuing uncertainty can change behavior significantly. The danger is it will descend into survival mode.
Or to put things another way, we now live in an era where people will live longer than ever. At the same time, all assumptions about the future are going away, making the course of their long life uncertain. What are all those people going to do?