Depression, stalemate, and gridlock

A friend of mine was wondering about the Great Depression. The problem they saw goes something like this. Before the stock market crash, you had people doing needed work and receiving needed wages. There was a positive economic cycle: money changes hands between lenders, employers, workers, and consumers, each of them, so far as he remains in that cycle, becoming richer and getting more needs met. But then – boom! – a problem in New York, on a particular fall day…* and suddenly no one around the country is working any longer.

Now, what sense does that make? The work is still there to be done. The people are still there to do it. The tools are available, there is time in which to do the work, there is time and nothing but time, there is too much time and nothing to do to fill it, and yet there is no work getting done. Everybody wants the work to get done, they can do the work, and they have the tools and the time; but nobody works. How can that be?

It’s a striking question. It remains interesting on closer examination, in that answering it doesn’t seem to blunt it. So if you were to say, for example: They don’t work because there is no money. The lenders can’t loan money to the employers, for whatever reason. So the employers don’t have money to pay the wages, can’t maintain the machinery, can’t order supplies, can’t transport completed goods to market, and can’t sustain operations between goods creation and sale. So the workers don’t get paid, and don’t have money to create their own operations, and are idle. So no consumers have money to buy, so other operations dry up as well, fewer lenders are making money, so lenders have less to loan, more employers are losing funding, more workers are remaining unpaid.

Well, and if you were to say that: that answer gets you nearly nowhere. For what after all is money? Isn’t it just a measure of value? We measure this much of that kind of labor and say it’s such-and-such a number of dollars, this much of that kind of material is such-and-such another number. Why would a loss of the measuring instrument result in the loss of the thing it measures (for surely in a depression labor and goods do seem to disappear)? If you destroy or damage a person’s bathroom scale, they won’t starve to death, or even lose weight as a result.

How can money, this man-made pseudo-thing, very much internal to and created by our political processes and social structures, have this power over them, as if it had substantial existence outside of them? – and how does it vanish, if no one of the people that created it and maintained it wants it to vanish and is trying to make it vanish. You return to the original question. Why should some problem, on the stock market, with the money supply, which is extraneous to people’s needs and desires, keep them from pursuing and meeting their needs and desires.

It is strange. But it isn’t singular, I don’t think. There are parallels elsewhere. For example, in love. Let’s take a couple. They love each other. They express their love to each other, they give each other energy and support, they make each other feel good, they care for each other and meet each other’s needs while each gets their own needs met. There is a kind of economic cycle of increasing happiness and well-being. Person A feels happier and more secure, so is able to aid Person B, who becomes happier and more secure, and more able to help Person A. They maintain firm boundaries and their sense of self while sharing burdens and covering weaknesses with strengths. The demonstration of love becomes a habit, which becomes a foundation for a better and deeper love.

But then take that same couple at another time, in a difficult time. Watch how their interactions with each other seem to rob them of energy. Watch how minor problems become aggravated by the other’s presence, absence, interference or non-involvement. Looking closely: the needs are still there, the skills are still there, the desires and intentions are all present, just as before. But the needs are not getting met, the skills are not being applied, weaknesses are exaggerated and insecurities increase. There is hostility and mistrust; every interaction, far from creating energy and pleasure, reduces it and robs pleasure from other activities. Far from being a refuge, the relationship becomes what you fear most. And any effort you make to turn it around or make it better involves you in so much pain you are doubly reconfirmed in your fear. The habit of distrust only finds confirmation for itself.

I think this situation will be familiar to anyone who’s had a relationship fail, or nearly fail, or observed others’ failing. And of course every relationship is different and fails in its own particular way. It’s impossible to detail the multiple reasons why any particular one fails, or why another that seems so toxic manages to continue. But a result of whatever the core problems happen to be is lack of trust, or faith, or hope. I don’t have faith that my lover isn’t trying to hurt me, I don’t believe what they say about where they have been, I can’t trust them to take care of their problems in their own way, I have no hope that they will even recognize the problems that I see. Without trust, it is and becomes increasingly more difficult to get the benefit of a relationship, because you must be continually on your guard.

The business world is not dissimilar. Any routine business transaction depends on credit, that is to say, trust. Even the existence of money is dependent on this trust, in that I trust, in receiving a dollar bill for my labor, that I will be able to convince someone else to take it, in return for goods. Likewise, in shipping goods, I trust that I will receive payment in thirty days. In paying, I trust that I have received quality goods or that I can pursue the manufacturer and recover my losses. But when lenders begin to lose trust that their loans will be repaid, or lose trust that their holdings of collateral can be redeemed for the value of the loan, when employers begin to lose trust in their ability to successfully market their goods, when workers lose trust in the payment for their labor, the cycle doesn’t continue.

I don’t mean to take away from the question. I’m not saying witnessing the failure of love might make widepsread economic failure any more comprehensible, or any more ordinary. But I do believe it is something we are familiar with, it follows a pattern that can be recognized elsewhere. Maybe the best way to describe what money is, is trust, or that its flow in a system is indicative of the level of trust in the system. So it’s not directly a measure of value, or if it is that, it is this as well, an indicator of trust, such that the disappearance of money from the system isn’t the cause, but the tell-tale sign, of the breakdown of the system.

There is another, possibly simpler analogy. Imagine automobile traffic. Take a situation where people are content with the speed they are going. Traffic flows freely and in an orderly way. Merging traffic onto a highway is allowed into the stream. Lane changes are not contested. In this situation, studies show (I don’t have a citation but I might be able to find one, I read something on the internet once, you know the way it goes), traffic actually will go faster than in the contrasting situation: Merging cars have difficulty finding space to join. The drivers in the main stream of traffic are jealous of their space and don’t allow lane changes or mergers in front of them. In this situation, the cumulative effect of each driver’s individual lack of trust and desire to ensure the fastest possible speed given the amount of traffic is that the overall speed of traffic is reduced. This reduction in speed has then the result that drivers are more anxious to increase their speed, are less likely to allow mergers or lane changers ahead of them, and contribute more to the overall reduction of speed.

Again, the issue here is a lack of trust. The aggressive driver does not trust that the flow of traffic will get them where they are going in a timely way. The trusting driver, provided they are in a system populated by other trusting drivers will, all other things being equal, arrive more quickly than the driver who is trying to go more quickly than their fellow drivers, provided the fellow drivers are also concerned about their speed and don’t trust the flow of traffic. Of course then, the trusting driver, like the trusting lover or the trusting lender, if they are in a system populated by their opposite, will find that through no fault of their own, or perhaps entirely their own fault due to their own actions, that they will arrive more slowly, be in more pain, and lose more money than their fellow citizens.

What does this amount to? Well, I don’t know that I understand my own answer. Certainly it doesn’t seem to make the question go away. How does it happen that money, or trust disappears from a system? Why do two lovers stop loving? Is there a way to make drivers just relax? These are just restatements of the original issue, in modified form. They’ve been blended, and combined, but not processed or consumed or transformed from the suspended, hanging state of the question to the settled state of the answer.

I wonder if the real portrait that emerges here isn’t of the question, which seems to have meant something different to my friend mind than to mine. Rather, it seems as though the real subject is my own mind, and my own preferences: I prefer the question not to have an answer, and I will allow myself to explore an answer only if I can feel that at the end of the exploration I will have returned to the question more puzzled than I was at the beginning. There is something in me that doesn’t want to trust an answer, that would prefer to dwell with the question, because something as problematic and untrustworthy as a question is less challenging than the answer which asks you to depend on it, and use it to solve other problems. Like the well-fed cat, I play with it and put it in terror of its life before getting bored and going elsewhere, leaving my prey as alive as when I first encountered it.

* I think this is actually a disputed point. It is an open question, from what I read on the subject, which was little and long ago, so I don’t know that I could direct you more firmly than I am about to, it is an open question whether the Great Crash really was a cause of the Great Depression. I believe the issue is that the Depression did not begin in earnest until 1931, but there were already indications of the problems to come before the crash in October 1929.