What’s New Is Old and What’s Old Is New
The year 2020 began with much news and many “news.” It was not just a new year, but a new decade bringing with it new innovations, new candidates (and some old), new streaming services and even a new mission to our planetary neighbor as America prepared to launch the Mars 2020 rover mid-year to join the Curiosity rover already cruising about the Red Planet. I love that name “Curiosity”—what a great name to reflect human nature’s desire to explore the unknown. Unfortunately, as we all know now, 2020 has also brought with it a new virus and as a result, many plans and many people have been thrust into the uncomfortable unknown. Let’s take a moment to examine things as they now stand, the known and the unknown.
The known: We know that pandemics have occurred in the past, with various degrees of severity and impact. The 19th century found several rounds of cholera raging throughout the world at various times and places. In 1918, the world experienced the so-called Spanish Flu and, on a smaller scale but very personal note, my great-great grandfather’s first wife and three of their children died of diphtheria in the late 1870s when that disease ravaged many small settlements in southeast Minnesota. What is also known is that all of these pandemics ended. Medical advancements were made and improvements in societal organization were developed to better contain and even prevent such maladies. Best of all, the process of vaccination was greatly refined throughout the 19th and 20th centuries, building on the foundational work done by the pioneering English physician Edward Jenner.
The unknown: What was unknown during those phases noted above, as with the current situation, is the length of time needed for things to level off and then to improve. It is this unknown that causes financial markets to decline, economic growth to stall and the human emotion of fear to rise. It is said that fear of the unknown is the greatest fear of all. It is also said that the only thing we have to fear is fear itself. I subscribe to the latter view and I believe you should too. Human beings are the most resilient, most adaptable and most intelligent creatures on the Earth. Collectively we’ve survived everything that Nature has thrown at us and even the things we’ve thrown at ourselves. There will always be unknowns but, along with that, there will always be our intellect, our experience and our very human ability to use logic and reason to compartmentalize the emotions of anger and fear. Gone is the time for fear, now is the time for logic and reason.
Probing more into the known: We also know that economies recover, nations recover, and the process that the great 20th century economist Joseph Schumpeter called “creative destruction” evolves forward. We know that in the early 20th century Sears revolutionized retail with its catalog and home delivery service and we know that in the late 20th century Wal-Mart and Target displaced Sears, only themselves to be forced into an evolutionary process by the innovations of Amazon in the early 21st century. All these changes initially brought positive and negative forces into play—the loss of hundreds of jobs at the “General Stores” of rural America when the Sears catalog arrived, but the creation of hundreds of thousands of jobs by Wal-Mart, Target and now Amazon. In 1983, when a revolutionary software program called Lotus 1-2-3 emerged, fears ran wild that the accounting profession would be displaced by this new technology and the personal computer. According to the Labor of Bureau Statistics, there were approximately 856,000 accountants and auditors in the United States in 1984. Today the Bureau estimates there are approximately 1,300,000. Creative destruction indeed, but the creative elements outpace the destructive ones and the economic evolution continues upward.
Flipping the coin again to the unknown: We don’t yet know when an effective treatment will take hold for the virus, nor when a vaccine will be found, but the odds are overwhelmingly in our favor that such advancements will indeed be made, and likely be made faster than at any time in human history given the pace of innovation and the global efforts now underway. Remember that Salk introduced the first vaccine for polio in 1955 and with it went away the crippling effects of that disease. We have vaccines for measles, mumps, rubella and diphtheria and every year newer and more effective forms of vaccines are developed for the common flu. The example that shines best of all, of course, is that of the total elimination of the smallpox disease, “the scourge of the world,” which was eradicated off the face of the Earth by 1980. Mankind had gone from the great unknown to the greater known.
When reflecting on the current economic downturn and the uncertainties many people are naturally feeling, it helps to separate out that which is needed versus that which is convenient. I need food, clothing, shelter and water. I find it convenient to press a button on my TV to watch a baseball game. I need a sense of purpose. I find it convenient to watch YouTube videos. I need human companionship. I find it convenient to have an airplane take me to an island. My point here is that NONE of the needs have changed or disappeared, nor will they. My needs and your needs are met. Our conveniences…well, most are still in place and a few have been disrupted, but just as with the force of creative destruction, that which has been displaced will soon be replaced and even more likely by something better than the old. Perhaps instead of watching a baseball game on TV, I’ll play a game of catch in the backyard with my sons.
What’s new is old and what’s old is new. Nothing is permanent. This too shall pass and on the flip side of this currently dark coin are amazing things to come.
This article is for general information purposes only and is not intended to provide legal, tax, accounting or financial advice. The information in this article, and any opinions expressed therein, do not constitute a recommendation or an offer to buy or sell any security or financial instrument. Viewers should consult with their financial and/or legal professionals before making any financial decisions.