Business Musings: Fear And The Future (Fear-Based Decision-Making Part 8)
I wasn’t going to write much more on fear-based decision-making after the last post, “Fear And All Writers.” I figured I’d said what I needed to, even if the end of the series was (in my opinion) a bit lacking.
Then I saw an opinion piece on Bloomberg, thanks to my Twitter feed. What caught my eye was the tweeted hook (as it should have):
Humans normally respond to big unforeseen shocks in one of two ways:
- Recoil from risk-taking like we saw after the Great Depression
- Accept that risk is part of life and learn to embrace it — like they did in the Roaring Twenties
I’ve been searching for some analysis of the 1920s post-pandemic culture for a variety of reasons. I’m not finding what I’m looking for, and honestly, with what I do know, I’m not so sure that the folks in the 1920s are a great example. If Lost Generation’s lives and fiction are to be believed, they didn’t so much embrace risk as wander aimlessly and drunkly into their futures. There was a lot of PTSD underneath all of that illegal alcohol.
Still, I liked the tweet, which got me thinking about reactions to major crises. In the U.S., the Great Depression was followed by a war economy, which changed the way that we did pretty much everything. Yes, there was financial fear, but it was compounded by the uncertainty of war.
The 1918 pandemic came at the heels of a great cataclysm—another war, the First World War, or the Great War, as that generation called it. The two events seemed to be of a piece—the war and the flu caused millions of deaths worldwide, which once again, changed the world.
The Twenties roared here in the U.S. because we were largely untouched by the war itself. Our economy was more or less stable and we weren’t rebuilding from complete devastation. Europe, on the other hand, saw horrid inflation and more people out of work than people had ever seen before.
So the generalizations in the tweet aren’t really accurate, but they did intrigue me enough to get me to the article. Which had some lovely tidbits.
First, to the surprise of many economists, new business applications here in the U.S. are up 38% over pre-pandemic levels. (This according to the U.S. Census Bureau.) The Bureau separates the applications into two categories—High Propensity applications (for business that will grow and hire other people) and businesses that will stay small and probably only hire their founders.
Small business start-ups often grow after major economic turmoil. That’s why I wrote The Freelancer’s Survival Guide in 2009 and started to revise it in 2020. I got derailed from the revision when I couldn’t see what kind of future we were going to have, but now that I’m beginning to see it, I’ll need to get back to that.
According to Bloomberg, many economists don’t think that this entrepreneurial impulse will continue after a year or so. They’re blaming the growth in start-ups on the pandemic itself, which threw hundreds of thousands of people out of work suddenly.
Other economists think that’s precisely why we will see a growth in risk-taking and entrepreneurship. I agree with them. The worst has happened to these folks who lost their jobs. They were jolted out of their comfort zone (if they had good jobs) or forced to realize that they had crummy jobs and could do better.
If they were in the position to capitalize on their existing skills, these unemployed folks did, because they had nothing else to do—some of them for the entire year. Why not try to make money doing something they loved?
Bloomberg pointed out one other aspect of this particular downturn. It didn’t just break how we were all living—the way that previous pandemics, wars, and Depressions did. It introduced a massive technological change, which I will discuss in more depth in a future article. People had to learn how to work and go to school online, sometimes in the space of a single week.
(I still think of my Spanish teacher, who admitted in one class that she thought the internet was an actual physical thing and she had no idea how the cloud worked. Kudos to the techs at her school for getting her up to speed enough to handle online teaching. I know she wasn’t the only one who needed a big boost.)
Customers, consumers, workers, and business owners all crossed the digital divide together. People now know whether they can be comfortable working at home or working for themselves on their own schedule.
The other thing that made Allison Schrager, the author of the article, optimistic that an entrepreneurial boom is here is that the number of new business applications continued through the spring, even after many regional economies reopened and people went back to work—often at higher wages, because right now, hiring is very competitive.
That means a lot of people are willing to take on the added risk of running their own business.
It doesn’t mean these people will be successful. It’s one thing to open your own business; it’s another to make that business thrive. Most small businesses fail in the first five years. We haven’t even been at this post-pandemic economy for five months.
I did find the article hopeful, though, because of the acceptance of risk. Let me see if I can explain.
My parents were products of the Great Depression. My father’s father had a government job, and worked through the Depression. My father went to college and immediately got a job upon graduation. My father’s family had money.
My mother bounced from household to household, finally ending up living with her sister, whose husband worked for a bank. My mother remembered eating from rusty cans because she couldn’t have other food, and she always thought that radishes on white bread was comfort food.
She was incredibly frugal. The fights I remember my parents having in front of me always came at Christmas time when my father splurged on a family gift. He came from money; he assumed a job would be there, so paying on credit or making an unplanned expenditure meant little to him.
Paying on credit or having an unplanned expenditure meant catastrophe for my mother. What if something happened? They could have used that money.
My father died seven years before my mother. Without his influence, my mother’s frugality took over—even though she had his full pension (at his salary adjusted upwards for inflation) and owned her home outright. When she died, her bathroom towels were so threadbare that my sister poked a hole through one of them just by picking it up.
That financial caution from that generation makes sense to me. I understand the cause and effect, just like I’m beginning to understand how the Roaring Twenties roared. After 15 months of constrained behavior, I want nothing more than to be around people, listening to music or going to a sporting event or laughing at a comedian. I want to spend time with my friends (those who made it through) and I want to move on, past that horrid year as if it had never been.
I, of course, kept my job, so I have no idea how I’d feel if I had suffered a serious financial hardship. I also work in the arts, so I did see a lot of people who lost their jobs take a risk and start expanding their artistic sides.
Dean, I, and WMG Publishing held a lot of sales on our writing workshops to help people learn during the pandemic, and we were surprised at the result. A lot of people took advantage of the half-off sales so that they could take the time to learn while they were at home or starting their writing businesses.
That showed a greater taste for risk than I would have expected during a tough year.
It makes sense to me, though. The world was already in turmoil. Doing something you loved while sheltering in place felt less risky. And doing so for months made it a habit, so coming out of the pandemic, a lot of people have learned how to do their art while something else is going on.
This is anecdotal, of course, but it coincides with something else I noticed here in Las Vegas. We got hit the hardest in the U.S. with the economic hardship. Most of our economy is based on tourism and hospitality, two industries that stopped one day and didn’t revive fully until the first of June, 2021. A lot of performers and theater people and artists had nothing to do. (Many of them were in my building.)
What do creative people do when they have free time? They create. The number of innovative new businesses that have started up in this city is so great that one of the local publications which tracks such things is having trouble keeping up.
What has this to do with fear-based decision-making? Well, I guess what appealed to me about that tweet is the bifurcated response to crisis. Fear can produce some major responses.
One of them is to retreat and fight hard to make sure that nothing bad ever happens again.
The other is to realize that the world is an uncertain place and risk is there, no matter what we do, so we might as well embrace it.
That second attitude is the freelance attitude. I’ve had it from the start. Looking at it, laid out in this piece, my attitude might simply have been a rebellion against my mother (yeah, I did that a lot). My father enjoyed life more than she did. He took risks. Ergo, risks were more interesting and a lot more fun.
We are all coming out of this pandemic changed. We all lived a year-plus in fear. That low-level of anxiety, whether we admit it or not, put our teeth on edge enough that dentists are seeing more cracked and broken teeth than they ever have before.
I think we all know that we can’t go back to that pre-pandemic comfort level. We’re all a bit shell-shocked and cautious. Yes, our jobs might be secure, but the world is not, and can literally change on a dime. We’ve all experienced it now—and we experienced it together.
We can make all of our decisions out of the fear that we might get hurt again (the Depression response) or we can realize that no matter how much we protect against catastrophe, something serious will happen in our lifetime. Better to take a risk now than to live in teeth-clenching fear for the rest of our lives.
I’m seeing a lot more risk-taking, and it’s cool that the statistics are bearing this out.
Our world is transformed, and one thing that might have transformed every generation that has lived through COVID is a great acceptance of uncertainty. If we accept uncertainty, then we are more comfortable with taking risks.
I’m actually looking forward to the next few years. I think we’ll see a lot of innovation and a great deal of change that we couldn’t have predicted in 2019.
I find that exciting.
As I said above, I’m ready to move into the future. I hope you are too.
When the pandemic hit, we paused our Decade Ahead classes because we literally could not predict what kind of future we would see. We’re starting it back up in 2022. We’ll also have a lot of discussion of the future of the publishing/writing business at the Business Master Class, which we’re doing online for the next year.
I plan to continue this weekly blog indefinitely. As long as I’m still learning, I’m going to share.
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“Business Musings: Fear and The Future,” copyright © 2021 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / iridi.