Status quo bias and what to do about it

I had a really interesting lunch with a friend yesterday… He’s a worldly guy – extremely well-read, brilliant political thinker, great understanding of economics.

He’s always fascinating to break bread with because he can bounce around so authoritatively on so many different subjects — the slow-motion implosion of the EU, China’s massive construction bubble, the global debt de-leveraging.

Ironically, we were sitting in a restaurant right across the street from the park in Washington DC where the Occupy protestors have encamped for the winter. Every square inch of the park was covered with blue tents giving off the feel of a squalorous UN refugee camp in some war-torn third world hellhole.

Looking out at the park I told him that as ambivalent as I was about the Occupy movement (I agree with much of their sentiment, but part ways with some of their nuttier solutions which see even more government as the answer) my sense was that this was the Occupy movement in hibernation – settling in for a long cold winter — but by the Cherry Blossom’s first bloom the movement will stir from its slumber and be more energized than ever.

In fact, I’ll make a prediction here as an aside that by the time the political conventions roll around later this summer, the level of our national dissatisfaction may make the violent 1968 Democratic convention look like a 1920’s Women’s Temperance Union march by comparison.

My friend summed it all up by looking out at the Occupy folks across the street, saying, “Here’s the bottom line… We’re all f***ed. Even they know it.”  If that’s the case, I asked him, what was he doing to prepare.  To my surprise his answer was “nothing.”

Nothing? If there was one guy I would have thought had been taking steps to prepare for a future reality that will be wildly different than today, it would have been him.

All of which leads me, in my typically long-winded fashion, to two insights:

Understanding doesn’t equal action.  Sure many of us are blissfully unaware of the magnitude of the challenges we face.

Seduced by the modern day equivalent of Roman bread and circuses, we sit enraptured dribbling over the latest exploits of Jersey Shore’s Snooki, or take at face value the vapid infotainment spoon fed to us by Stepford-news readers on Fox, MSNBC and CNN, utterly oblivious to the tsunami gathering on the horizon.

But there are others of us who “get it” and still do nothing. Why? I can only speculate, but I believe it’s because they are too invested in the status quo. In other words, they have status quo bias.

Look, the status quo is a powerful thing. People tend not to change established behaviors or beliefs unless the incentives to change are compelling. Acknowledging that the status quo (everything we’ve lived, believed, and prepared for) is no longer operative is tough. It means starting from scratch… It’s going back to square one and facing up to the fact that a vastly different future awaits us. It’s simply naive to think that this doesn’t have a huge impact on the psyche that results in head-in-the-sand paralysis for many of us.

So, what to do… As I explained to my friend, start with baby steps. Yes, it’s a pain in the ass to do the big things – hedging your sovereign risk by opening a foreign bank account or buying foreign real estate for instance – so don’t start there. Begin with little things: Start a small vegetable garden in the backyard; Buy a few gold coins now and again; stockpile some food; learn a new marketable skill that will be valuable in your local community.

Baby steps. Do this and you will gradually ease yourself into the bigger things later as you gather momentum.

Which gets me to the second insight…

We’re not f***ed

Things will be wildly different in our lifetimes and we will face huge challenges, yes, but humanity has been through this many times before and always managed to come out the other side.  Think about the cataclysmic changes of the industrial revolution – which by the way was rife with just as many apocalyptic prognosticators as we see today.

James Howard Kunstler had a great piece yesterday about James Dines, whose work over the years has focused on collective cognitive psychology. Dines suggests that what we are witnessing today is a “murmuration” – an unexplained set of behaviors among living species that respond to things at the exact same time, similar to the way a flock of starlings all turn in the sky at the exact same instant without any communication between them. Think of the almost simultaneous uprisings in Tunisia, Egypt, Europe, the U.S. and many other countries in just one year – 2011, and you’ll get an idea about how murmurations work with the opposable thumb crowd.

Humanity’s murmuration today is an acknowledgment that the status quo is no longer operative. It’s a recognition that’s occurring globally and simultaneously across nation-states, cultures, societies and borders. The changeover will be every bit as calamitous as the changeover from an agrarian to an industrial society but it’s not the end of the world.

In our case, I believe humanity is recognizing that the era of centralization is coming to an end. The Internet and communications are largely responsible for the wave of decentralization sweeping the globe, giving us a collective recognition that we no longer have to rely on fraudulent centralized institutions for our care and well-being. In essence, we have suddenly awoken to the realization that we are all on the downward slope of the centralization marginal utility curve.

Why is this a good thing? Because the massive centralization of the later industrial age placed less and less of a premium on individuals taking any responsibility for our own actions and decisions. At least in the developed world, we came to rely on big government to feed clothe and protect us, big corporations to employ us until retirement, an industrialized food system to put food on our table, and a massive health care bureaucracy to keep us healthy.

Those days are rapidly waning. The wave of decentralization sweeping the globe will force us to get back to the core values of resilience and self-reliance… Our lives will likely be simpler with less focus on the acquisition of things, more community oriented and more entrepreneurially driven. Exponential economic growth is out for certain, and resource constraints will require us to be more creative in doing more with less. Inevitably (and paradoxically) however, this will once again unleash a new wave of human ingenuity and creativity that will rise to the the challenge.

It’s a fascinating time in world history, but to fully reap the benefits we must start turning our back on a status quo that’s like an old doddering has-been that keeps trying to recapture the glory days and start seriously preparing for a much different future.

With that, I’ll leave you with some murmuring starlings…