A pandemic of fragility

That feeling you are feeling is fragility.

We are all feeling it.

Of course, at first glance I mean the fragility of our own precarious emotional, economic or mental states; but if we dig deeper we can also feel the fragility of the various systems, understandings and routines that make our contemporary lives possible.

We can now all sense, however subconsciously, that these systems, and thus civilisation itself, are as fragile as a thin sheet of ice over the deep and cold waters underneath. We skate around on that ice, going about our normal everyday routines, and for the most part we never think about the intrinsic fragility of our comfortable lives.  This unawareness is, in fact, deeply tied to our happiness and emotional equilibrium. We deeply need to not be worried about the everyday systems that support us. We need to feel they are so safe and secure that they are effectively invisible.

And the pandemic has stripped that comfortable ignorance away from us. We can hear the ice shifting and cracking. We remember, as if for the first time, how deep and cold and dark the water underneath us is. And we shiver.

The realisation that our systems, our lives, are fragile, is deeply disturbing.

For example, a recent piece in The Guardian touched on the widespread need for an ‘end point’ to this pandemic – the point at which we can all say ‘We made it!’ and return with relief to our normal lives:

Feeling like there was a neat ending in sight was a psychological crutch – one that helped propel us through bizarre and tedious weeks of social distancing, constant hand-washing and using skin-stripping sanitiser.

As a society we have been telling ourselves ‘This Too Shall Pass’ as an emotional and mental health strategy. While this is certainly a ‘psychological crutch’ to help us endure the first lockdown, is also reflective of a deeper psychological need.

As a society, as a culture, we residents of the industrialised and urbanised world are invested deeply in the perceived stability and permanence of that world. We base our mental health on this sense of stability; this sense that the reality of the world is essentially fixed, and that we will always ‘snap back’ to the bedrock permanence of our lives. We believe we can predict the future, and we plan our personal, social and economic decisions around that default certainty.

We get married, we buy a house, we study or work in the pursuit of our personal ambitions and goals – but only against the backdrop of an essentially fixed and permanent social reality.

To survive this pandemic, it is therefore perfectly natural that we would tell ourselves that this is merely an interruption.

Things will return to ‘normal’.

Our regularly scheduled program will resume shortly.

Time to wake up – and suck it up

The problem is that, no matter how much we want our world, and our lives, to be stable and permanent – they are simply not.

They never were – and they never will be.

This sounds like an easy thing for me to write, of course – but this dramatic statement is based on some personal and intellectual experience.

Like more people in this world than most of us realise, my partner and I have survived a number of years of financial and career instability, with myself working for over a decade now as a sessional academic at RMIT. The deep pleasures, and gnawing insecurities, which come from such a career ‘choice’ are the topic for another post – but anyone who doubts the effect that persistent insecurity can have on your mental health is a person who has never experienced such insecurity.

At the same time, I spent the five years of my PhD reading about the ways in which interconnected complex systems can collapse unexpectedly. About the inescapable truth that no system, no way of life, no civilisation, lasts forever.

At the end of all that reading and writing, I came out with one clear understanding: everything complex is simply, and inescapably, fragile.

Why there is no going back

One of the most uncomfortable elements of the pandemic, and the nature of our contemporary and interconnected world, is the realisation that the world, even were the pandemic to ‘magically go away’ (as one stable genius seems to be hoping), has already changed.

Even while we understand that in fact, yes, the pandemic will pass, there is no way in which the ‘normal’ we return to may be the ‘normal’ we remember. In such a complex and interconnected world as ours, you cannot ‘freeze’ part of that system and expect the other interconnected elements to remain frozen in place. In complex adaptive systems, a change or shift in part of the system can have unintended consequences elsewhere in that system. Systems don’t ‘stand still’ waiting for the pandemic to ease and normal reality to be restarted.

In the time that we have been socially distant, or in lockdown, other parts of our systems have been adjusting to these changes. They have been shifting, readjusting.

The example of Melbourne’s CBD

Take Melbourne’s CBD. I have worked for many years at RMIT, and I have a deep love for the crowded and bustling part of the city where that institution is based. The jostling of different cultures; the huge number of multicultural restaurants; the streets filled with young people full of ambition and life; the stimulation of differing ideas and worldviews…

Yet will all that be there, in the same form, once the lockdowns eventually ease? I know that things will, most likely, never be the same again, and there is a level of grief implicit in that knowledge.

Will the international students return, or will travelling to Australia for three years to study no longer be ‘the normal’ thing to do? What happens if the changes in tertiary education we see happening now become normalised? What will Melbourne be like without the foreign students? Who will fill the CBD accommodation we have built?

Also, where does this leave universities in Australia? In 2017, education was ‘Australia’s largest service export and third overall behind iron ore (worth $62.8 billion in 2016-17) and coal ($54.3 billion). It is larger than gas ($22.3 billion) and gold ($19 billion).’

What will be the cascading effects of a collapse in foreign education revenues?

And it’s not just the universities, but the entire white-collar professional workforce which has, until now, been based in the CBD. More and more city knowledge workers, myself included, are able to work from home. In fact, many of us prefer that, and developments in technology have made it clear to organisations that working from home is increasingly practical. More and more workers say they want to work from home more regularly and reduce their times in the city. More changes may flow from this…

For example, the nature of (post-industrial knowledge-based) work may continue to change. How much can companies (many already in difficulties due to the economic slowdown) save in terms of rental costs if they downsize their offices? Will companies shift to smaller spaces, and increasingly let their staff work from home? Will that affect the commercial property market in the CBD?

What about the number of restaurants, and retail outlets throughout the CBD? Will we need as many, with fewer workers and foreign students there? How many hospitality and retail businesses will even be left there, after this next six weeks of lockdown is over?

With less students and workers, and less cafes, bars and restaurants, the need for service employment in the CBD will fall. This will further reduce the number of people needing to access the CBD on a daily basis, and thus affect the energy and vitality of the CBD…

This also affects public transport requirements; will we still need to shift huge numbers of people into and out of the CBD on a daily basis? What does that mean for our CBD-centric PT system?

What will the CBD look like in three months, or six? Or twelve?

These are big questions, and I certainly can’t claim that these changes will come to pass; lasting shifts in complex adaptive systems are intrinsically hard to predict. But it is clear that things will change in a number of ways when the pandemic finally is over… and our systems will continue to shift and change long after that.

This is what complex systems do, after they have been buffeted by a major disruption – they shift, adapt and settle into new equilibria. This then becomes the ‘new normal’ – until it shifts and changes again.

Individuals and the ‘attitude of the knife’

So what do we do to manage this situation?

First of all, in the face of this overwhelming systemic, and personal, fragility, it is crucial to manage our expectations in the light of new realities. The pandemic is here, and we must accept it. Our world has changed, and it is very unlikely that it will ‘change back’ to the way it was pre-Covid.

That pre-pandemic world is gone – and whatever grief, denial or anger might come with that realisation must be acknowledged and dealt with. We all have to live in the world that we find ourselves in, and throwing tantrums against masks, or trying to find an explanation for our fragility through childish conspiracy theories will help no one.

Children can retreat to fantasy worlds (5G! Bill Gates! Celebrity chefs are prophets!) in the face of systemic shocks and disruptions: adults are supposed to be, well, adults.

A wonderful quote from Frank Herbert’s Dune explains the shift in attitude that we need now:

Arrakis teaches the attitude of the knife – chopping off what’s incomplete and saying: ‘Now, it’s complete because it’s ended here.’

Anything in your life that you wish you could do, but now can’t – accept it.

The sooner we can all accept that this fragility was actually always there, the easier it will be to adjust and settle into whatever ‘new normal’ awaits us at the end of this tunnel. In the words of an old shampoo ad: it won’t happen overnight, but it will happen.

There will be a new reality there, and our systems will settle back into some form of equilibrium. It just won’t (can’t!) be the same as it was before.

An online panel on the implications of the pandemic…

Back in May I participated in an online panel (for the Melbourne PC Users Group) on the implications of the Coronavirus pandemic.

A fascinating discussion – three ‘take aways’ for me:

  • the gender implications of the pandemic – it is most clearly (and negatively) impacting women, and in particular single mothers
  • how good would a Universal Basic Income be about now!
  • after 40 years of trying we still don’t have a vaccine for AIDS – we should not assume the situation will be any different for Covid19

The permanent Youtube link.

Why the government should not bail out property investors

This second piece took a little longer than expected… home schooling is taking up every available moment, TBH 🙂

For this piece, I want to examine some of the philosophical and/or ideological arguments for and against government assistance in a time of systemic market failure – and particularly with regard to property investors.

Keynes and the collapse of the property investment market

AS the shutdown continues, government assistance has become an inescapable fact of economic and social life, for those who have lost their jobs or their businesses, or who face the loss of their homes.

Into the breach has stepped the government, however reluctantly: organising and monitoring the social response to the virus; controlling who enters our airports and ports; distributing medical resources and supplies as needed; offering financial assistance as our entire market systems grinds to a halt.

And why not? Keynesian capitalism is based on the (radical?) idea that markets sometimes fail – itself a clear truism given the economic collapse we are currently experiencing. Government guarantees and stimulus, of whatever form, are sometimes necessary to enable the entire market system to survive.

Is this even in doubt anymore?

Hello?

Government provided bathers for all?

But can (or should) the government bail out everyone?

The answer to that must also clearly be no. And the reason comes from within one of the foundational tenets of market capitalism – individual freedom.

In Australia, this concept of individual freedom should lead to an understanding that the group least entitled to a government handout are the private property investors. Let me explain why.

A truism from the world of investment is that ‘When the tide goes out, you see who has been swimming naked’. This means in the good times everyone can dive in and invest, even if they don’t actually have the economic surplus to be doing so safely. In a boom, the returns keep coming, and everyone can share in them.

But once the tide turns, as it has most dramatically and drastically with the Covid-19 pandemic, then you start to see who is ‘swimming naked’ – overleveraged (in too much debt) and unable to maintain their investments.

In systemic terms, many property investors have clearly chosen their investment strategies on a ‘business as usual’ model, in which property prices will always continue to rise (the possibility of a Black Swan event like a pandemic was obviously even less on their radars). This basic misunderstanding of economic reality, that complex systems such as a property market will always function perfectly and prices will always go up, has meant that many property investors are now at risk of being left standing naked on the sand.

They have, quite clearly, forgotten that investment is, and has always been, a gamble. It is a risk, and always should be.

If investment is not a gamble, if the government stands behind everyone’s investment, then we face the moral hazard of a consequence-free investment regime.

And yet, we are already seeing their outstretched hand for government assistance

It would be logical for them to expect it of course, since negative gearing (another level of government market interference) exists to help them build their portfolios.

But there are two reasons why they should not (with the possible exception of self-funded retirees) receive assistance.

Coupon clipping in a crisis?

The first is the question of societal and economic value. Property investors, or to use the old term, landlords, are a sector of the economy with no meaningful or creative economic function other than to live off the proceeds of the property they control.

In this case, I am not talking about those who invest in the stockmarket, or those who live off what their Daddy left them (a big shout out to Gina!), for they are at least responsible for employment for thousands of other Australians as their capital is reinvested in productive enterprises.

There should also be an exception made for self-funded retirees; those using rental income to fund their retirement. They will be in a difficult position and are at the end of the productive employment age.

No, by ‘landlords’ I mean landlords in the most commonly understood meaning of the term. Those with their ‘portfolio’ of investment properties, all leveraged off each other and reliant on a steady and uninterrupted stream of rental income to service their debts.

They are not investing in new technologies, or opening new business and providing employment, or working directly in the wage economy. They offer very little in the best of economic times, and are worse than useless in this crisis.

For what this crisis has brought into focus, if nothing else, is the importance of those hitherto overlooked jobs that are crucial to the maintenance of society compared to the landlords. The essential workers such as medical and emergency staff, grocery retail staff, chemists and pharmacists, truck drivers, warehouse staff, cleaners and those working in the factories producing our essential products.

These are the people who need assistance – who deserve assistance – along with the many hardworking and productive Australians who have lost their jobs and risk losing their homes (whether rental or mortgaged).

The issue of economic freedom (or why there is no need to eat the rich)

The second argument against government assistance for property investors is a little different.

This is not a Marxist diatribe ‘bashing the rich’ – for landlords, by and large, are not rich. The great majority are debtors, for ‘property investment’ is merely a more polite way to describe debt.

But this is a debt burden freely chosen.

Yes, the problem is that this debt is repaid by others, who cannot, because of factors out of their control, continue to meet their landlord’s debt repayments. But the debt remains those who have chosen it.

So my second argument comes from within capitalist orthodoxy – the concept of individual economic freedom. This is why I do not advocate any government assistance to property investors and landlords, while supporting it for other economic and social actors.

Government assistance for businesses, renters, owner-occupiers and the unemployed – absolutely.

Government assistance for property investors – absolutely not.

The reason is because this is still an economically free society, in which private property rights are respected and individual economic freedom is still sacrosanct. But what goes along with this Individual Freedom (as any traditional conservative – if they still exist – or reader of Hayek can tell you) is the concept of Individual Responsibility.

This means not taking on unsustainable amounts of debt without accepting the personal responsibility for being unable to pay should your circumstances change. Any rejection of this bedrock assumption of capitalism (Caveat Emptor!) risks destroying the focus on individual responsibility which is, supposedly, the basis for the entire system of free exchange based on private property rights.

Bailing out property investors, in any form or method, is simply Socialising the losses while keeping the profits Privatised.

The difference between investors and owner-occupiers is one of choice

The difference with owner-occupiers? Those occupying their own houses, and who are facing unemployment and the inability to pay their mortgages, have not entered this same debt cycle as freely as the property investors. People, and families, need homes – and they will take on debt to meet that basic human right.

Businesses also should be protected as a public good – when the crisis passes, we will need still-existent businesses to start employing their workers again.

But this is all manifestly different from property investment. Property investment serves no public good other than supporting the industry which has grown up around the endless flipping of houses for individual profit – so by all means support real estate agents to survive under the crisis is over.

Once it is over, people are free to go back to buying and selling houses for investment again, and the real estate agents can go back to work.

But the individual investors invested as a matter of individual choice.

By all means, continue to invest in property – this us an economically free society still, no matter the increase in government assistance to those bearing the brunt of this coronavirus crisis.

By all means continue to insist on receiving rent – although those landlords who can afford to ‘take the hit’, or who are simply more public spirited, are offering a pause on rental repayments to assist their tenants. Hopefully government rental protection will help people stay in their rental properties.

But property investors cannot put our their hand for government largess in this crisis – the right to invest as a free actor in the market place is a matter of individual freedom, and comes hand-in-hand with individual responsibility. Private property investment is not a social good that needs to be specifically protected during the crisis.

The government does not owe you a pair of bathers if you are standing naked on a beach.

Covid-19 and the ‘Privilege of Ignorance’

This is a longer piece which I hope will be the first of an ongoing series of weekly posts on the coronavirus and the ongoing systems collapse it has brought about.

In this post I want to talk about the broader social responses to the reality of Covid-19, both across the globe but more specifically here in Australia. In particular, this post will focus on Socio-economic Class and its implications regarding the slowly tightening net of social distancing as we move inevitably to the total shutdown of Australian society.

The ‘OMG moment’

All of us have reached, or will soon reach, our ‘OMG Moment‘ with regard to the Covid-19 pandemic.

This is the moment when everyone, whether societies, groups, or individual people, inevitably switches from ignorance, indifference, denial or insouciant bravado, to a realisation that the danger from this epidemic is real.

All too real.

Many of us have not got there yet, like those those who spit on their credit card in a supermarket because they can’t use cash, or take the ‘Coronavirus challenge’ and lick a toilet seat (no, really…), or simply refuse to believe that there is any need for social distancing.

https://me.me/i/social-distancing-at-st-kilda-beach-australia-379884c17faf42fe9c1e53ce4104b605

The question is – why have some people been able to adjust to this new reality, while others cannot – or more importantly, will not?

The doxa – the social construction of reality

The French sociologist Pierre Bourdieu called the shared reality in which we all live the doxa (ie the orthodox understanding of reality). What this means is quite simple – we all carry an understanding in our head of how the world works, ‘the rules of the game’, the way we all interact with each other, and the set way our relationships with those around us (and physical reality itself) are supposed to work.

You could call this our commonsense understanding of ‘the way the world works’.

The interesting point about the doxa, from Bourdieu’s perspective, is that our relationship with this commonsense reality is a ‘two way street’ – we are both constrained by the doxa, while at the same time reinforcing it for others (and ourselves!) by the way we act and think.

Take, for example, the social behaviour of waiting in lines. We do it because it is a generally accepted social norm of behaviour in Australia (while it is less so in other cultural contexts). We find we constrain our own behaviour to match this social norm, while at the same time expressing disapproval of others who break that norm.

We are both policed by the norm, while policing it ourselves – and thus reinforcing it for both others and ourselves. It is a ‘two way street’.

Social distancing and the changing doxa

The point about Bourdieu’s concept of the doxa, and the whole concept of the ‘social construction’ of reality, it that these realities can change.

Sometimes they change slowly, such as attitudes towards wearing seatbelts, smoking, or physically disciplining children. The slow nature of the change allows people time to adjust to new ‘social realities’, and as more and more people accept the new reality they enforce it (often unconsciously) through the simple fact of their behaviour. A tipping point (the ‘OMG Moment’) is eventually reached, and all of a sudden the social enforcement becomes so entrenched that holding out becomes intolerable except for the most socially intransigent.

The doxa changes.

We have seen this happen with marriage equality around the world, for example.

And here’s a classic visual example – it’s explained through terms of leaderships (and followers) but it is also a clear demonstration of how the first dancer eventually changes the entire social reality.

The first dancer (the leader/early adopter) is at first completely uncool and faintly ridiculous – but by the end those who don’t join in are the outliers. The pressure to join in (the social enforcement) becomes too much to resist).

However, when the doxa changes quickly, most obviously through a rapid crisis or event, like the spread of Covid-19, the situation changes faster than many of us are able to adjust to. This is the dynamic at play with social distancing and the movement towards a total shutdown.

Some people (and some political entities, such South Korea, HK and Singapore or the Australian states of Victoria and NSW) are shifting more quickly than others (and yes, I’m pointing at you Trump and, to a much lesser extent, ScoMo).

Intransigence: explaining the hold outs?

So what can explain the resistance on the part of many to changing our behaviours, and accepting (and practising) social distancing? One explanation is that people often resist the changing of their shared social reality depending on the extent in which they are invested in it.

If we are doing very nicely, thank you very much, in the current social reality, then we will obviously be much more loath to change that reality (and thus our behaviour).

We can see that in the backlashes against feminism and ‘political correctness’ – realities are changing, and those who feel most threatened by those changes are the most likely to resist them. In these two examples, the resistance may well come from identity.

But the impact of coronavirus is a little different, I feel.

Covid-19 and the influence of socio-economic class

I think socio-economic class becomes really important with respect to the impact of coronavirus. And the reason is once again connected to the extent to which someone has been invested in the pre-virus doxa.

That is, those who have been ‘winning’ in our hyper-connected globalised world, whether socially or economically, will be more invested in the continuance of that reality.

They will not want to change their behaviour, because this only happens if you accept that the reality has changed. No acceptance of a change in the doxa – no change in behaviour.

And there will be no change in a person’s acceptance if this implies a change in their economic or status situation.

My comfortable wealthy life is a result of my own hard work, and it is intolerable that it may change through no fault of my own…

This does obviously not apply to those super-wealthy who are isolating themselves, but it might well apply to those who cannot accept the reality of the change facing us all.

Evidence for this hypothesis?

The prevalence of coronavirus cases in the wealthier suburbs of Melbourne, for example, would seem to bear this out. Stonnington, which includes South Yarra and Toorak, and the wealthy seaside enclave of Portsea, are perhaps the biggest infection hotspots in Melbourne.

These are areas where people have been travelling overseas, and manifestly do not want to change their behaviour upon their return.

Thus we have the case of the couple that just returned from Aspen Colorado (a famous winter holiday spot for the wealthy) and did not think it important to socially isolate themselves… instead heading ‘out and about’ in Sorrento. I cannot speak to their thought processes, of course, but I wonder to what extent this behaviour is indicative of an unwillingness to accept that the social reality has changed?

We have seen such an unwillingness in the recent pronouncements of Elon Musk, or members of the Trump administration and the Trumpist right wing in the US.

Ok – but now I want to stop bashing the wealthy and turn the lens of ‘wealth’ onto all of us, more generally, as Australians.

‘Relative wealth’ and The Privilege of Ignorance

Therefore, at this point, I want to introduce a new aspect of privilege that I think is very much in evidence today – and that is the Privilege of Ignorance. This is not merely a privilege of the super wealthy within Australia and other countries, but is widespread amongst the relatively wealthy citizens of the developed world as whole.

In other words, this is not applicable to those sheltering in Portsea… but too all of us as Australians.

We have become, in the evocative words of John Howard, extremely ‘relaxed and comfortable’ as a society. The biggest example of this is the willingness many of us have had, as the virus spread, to choose to not watch the news or follow what has been happening.

Choosing to remain ignorant of the uncomfortable realities of the world, especially of the possibility or inevitability of unpleasant change, is a privilege. It is the privilege of being able to believe that ‘nothing like this could ever happen’.

It is the privilege of postponing the OMG Moment for as long as possible, in the comfortable complacency that it will not be as bad as ‘the experts’ are saying.

How could it be as bad as they are saying? That would imply that everything is much more fragile than we are comfortable imagining or accepting, and thus we postpone the awareness for as long as possible…

It is a privilege – and one worth acknowledging for the collective safety of us all depends upon us acknowledging it, and rejecting it.

Remember, this Privilege of Ignorance, the privilege of ‘not thinking’ about the essential fragility of our comfortable lives in any meaningful sense, is a symptom of wealth. The poorer citizens of developing countries have ever been able to entertain such a privilege. They live, day in and day out, with an uncertainty of existence that has, ironically, made them much more resilient than we, in the ‘developed West’, currently are.

We need to wake up, and quickly.

Our comfortable Australian lives are enmeshed in an interconnected global world in which events anywhere can affect us in Fortress Australia more than we think.

Like the Hobbits of the Shire, we are not untouched by the events of the world, however much we want to ignore ‘Far off tales and children’s stories‘… and have another beer.