What a World: Presidential Elections, Fashionable Pessimism and why you should be Optimistic

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The world is a wonderful place. This quarter, our ‘What A World’ segment takes a look at the upcoming Presidential Election, Fashionable Pessimism and why you should be Optimistic.


The wonderful thing about knowledge is that it is genuinely limitless. There is not even a theoretical possibility of exhausting the supply of ideas, discoveries and inventions. This is the biggest cause of all of my optimism. It is a beautiful feature of information systems that they are far vaster than physical systems: the combinatorial vastness of the universe of possible ideas dwarfs the puny universe of physical things.
The twenty first century will be a magnificent time to be alive. Dare to be an optimist.

– Matt Ridley from his book The Rational Optimist

Elections and Pessimism

I have always been amused by an interesting trait of human nature which I call “Fashionable Pessimism”.

For some reason, we all have a tendency to think that it is fashionable, “smart” and intellectual to be pessimistic, while optimists are generally considered naïve and childish. The chronicles of history are filled with the tales of famous “intellectuals” who were considered the great thinkers of their time because of their convincing dire predictions for how the world was headed for imminent disaster. I have come to believe that we like to celebrate the Pessimist, because there is something that seems “smart” about being the first to know about some coming disaster that nobody else knows about – yet.

I have also found that we here in the US also celebrate a special “Festival of Pessimism” every 4 years, called the Presidential election. It seems that every 4 years we nominate two very smart and educated candidates to appear on television several times over the course of 6 months, and remind us all of how many problems we have, how terrible our lives are, and to paint a dire picture of all of the horrible problems that will occur if they are not elected President on the 2nd Tuesday in November.

Indeed, this fall has been a classic example of this 4 year celebration of pessimism, has it not?

History Anyone?

Fortunately for all of us, the views of the Pessimist are in direct contradiction with the facts of history. In reality, consistent and relentless improvement in quality of life has been a central fact of human existence for the last 100,000 years, a fact which is difficult for the “Intellectual Pessimist” to explain away. Better yet, the pace of improvement in living conditions is clearly picking up, and that things have been getting better at an exponential rate in the last 50 years.

Roughly 15,000 years ago, mankind had the use of only very rudimentary tools like bows and arrows, spears and hand axes. Famine and starvation were a regular fact of life, and infanticide was common during times of hunger. Society was exceptionally violent, as warfare over food supplies was rampant. Chronic deformity, toothache, gangrene, tetanus, measles, smallpox, tuberculosis, plague, worms and many kind of parasites were commonplace. Slavery and wife beating were rampant in society. Not to mention the lack of soap, hot water, reliable shelter, plumbing, and many of the other things we take for granted today. It goes without saying that they didn’t have iPads.

If we fast forward to the 1700’s, a middle class family today has access to luxuries that Louis XIV the “Sun King” of France could never have dreamt of. The lavish meals consumed by Louis pale in comparison to the cornucopia of goods which greets us on a trip to the local supermarket, which is also far less likely to contain salmonella. With all of his tailors, Louis could never dream of browsing the internet to have fine clothing of silk, linen, or wool from all over the world delivered to his door within a few days. Louis had a fleet of carriages, but could never have dreamed of flying to his choice of cities around the world – in fact he could never have dreamed of seeing much of the world beyond the borders of Europe. Louis had an entire team of footmen to maintain the hundreds of candles he would need in order to provide poor quality light, which we can create at any moment by flipping a switch. Similarly, he would have required a team of woodsmen to provide his supply of firewood to create the heat that would have been far inferior to the furnace in your home. Louis had a team of messengers, but could never have dreamed of summoning anyone, anywhere in the world in a split second on his cell phone.

It is when we fast forward to the last 50 years that we understand the most exciting reality of all – that human quality of life is accelerating at an exponential pace, and that the improvements are now coming faster and faster. In the words of Matt Ridley in “The Rational Optimist”:

Compared with 1955, the average human being on Planet Earth in 2005 earned nearly three times as much money (corrected for inflation), ate one-third more calories of food, buried one third as many of her children, and could expect to live one third longer. She was less likely to die as a result of war, murder, childbirth, accidents, tornadoes, flooding, famine, whooping cough, tuburcleosis, malaria, diphtheria, typhus, typhoid, measles, smallpox, scurvy or polio. She was less likely to get cancer, heart disease or stroke. She was more likely to be literate and to have finished school. She was more likely to own a telephone, a flush toilet, a refrigerator. All this during a half-century when the world population has more than doubled, so that far from being rationed by population pressure, the goods and services available to the people of the world have expanded. It is, by any standard, an astonishing human achievement.

When I was born in 1969, half of the world’s population lived in extreme poverty – today only one in ten do. Most of the people on the planet were illiterate – today over 85% of adults are literate (and rising). For the last 25 years, 285,000 people have gained access to clean water EVERY DAY.

Most astonishing of all has been the massive growth of the impact of technology in our lives in the last 50 years. The iPhone was launched in 2007 – hard to believe but just 10 years ago. When I was born, if it was possible, in order to assemble all of the technological capability and functionality of an iPhone, it would have cost billions of dollars. Today, everyone has one in their pocket. However, the truly astonishing thing is that even someone with many billions of dollars back in 1969 could not assemble all of these technological capabilities in a pocket sized device – because most of them didn’t exist!

Indeed, the record of history is clear. Things just keep getting relentlessly better for human quality of life, and the last 100 years have experienced an explosion in improvement. Why should we expect that trend to stop?

A Dire Future?

During the election cycle this year, we have been reminded of the many problems we have, and the terrible future that awaits us. Our two candidates remind us that…

Terrorism and violence are on the rise, and that the world is a dangerous and deadly place…however the reality is that violence in today’s world is by far the lowest in the history of mankind.

Poverty and “income inequality” plague our economy…however the reality is that the “poor” in America today have access to luxuries that the richest man in the world 100 years ago could have only dreamed about. Today, of Americans officially designated as “poor”, 99% have electricity, running water, flush toilets, and a refrigerator; 95% have a television, 88% a telephone, 71% a car and 70% air conditioning. Cornelius Vanderbilt had none of these. Even in 1970 only 36% of all Americans had air conditioning: in 2005 79% of poor households did.

Our economy is stagnating, and recession looms ahead…however the reality is that in September the Census Bureau reported that real median American household income surged by 5.2% in 2015, the largest gain on record since the survey started in 1967. 2.4 million people gained full time work last year. The largest increase in 2015 incomes were for the bottom fifth of all earners. The official poverty rate dropped to 13.5% in 2015 from 14.8% which means that 3.5 million people climbed out of poverty.

Our health care system is doomed…however, the reality is that health care is likely to advance more in the next 10 years than it has in the last 100 years. [see Medicine Will Advance More In The Next 10 Years Than It Did In The Last 100 ]

What a world we live in, and how lucky we are to live in this country, at this moment in time. The future is indeed very bright, even though it is so fashionable not to believe it!

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About the Author:

Erik is one of the co-founders of Concentus Wealth Advisors and currently serves as the Chief Executive Officer of the firm. With over 25 years of industry experience, Erik guides the firm’s overall strategy.

After graduating from Amherst College in 1991, Erik spent a year working with Rittenhouse Capital Management, before joining Gerald in 1992. Erik currently holds his general securities registrations and insurance licenses, as well as CERTIFIED FINANCIAL PLANNER™ and Chartered Financial Consultant designations.

In addition to his formal designations, Erik has appeared on CNBC’s Worldwide Exchange, Fox News’ America’s News HQ, Live Well’s Mary on Money, CN8’s Money Matters Today and The Real Estate Connection.

In 2012, Erik was one of thirteen advisors named to Main Line Today’s Top Financial Advisors list.

Erik lives in Bryn Mawr, PA with his wife and three children. He serves on the boards of the Philadelphia Chapter of the Salvation Army, Acting Without Boundaries (serving young people with disabilities) and The Holy Child School at Rosemont. In addition, he is on the financial advisory board of the Sisters of St. Francis in Media, PA.

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