As Warren Buffet has said, “The average person now lives better than the richest person did even 150 years ago.” The truth of this statement is striking. How often do you hear politicians and talking heads discussing the difficulties of our time or how critical our time is? In some ways, it is (terrorism, mass migration, other external problems), but in most ways, it is not; especially when it comes to the economic standing of the average American.
Picture this: throw away your TV, your refrigerator, air conditioning, central heating, the water filter in your fridge, your freezer, universal plumbing, your computer, your phone, your iPad, your credit card, your car, airplanes, welfare (including food stamps, Medicaid, Medicare, most VA benefits, and the myriad of massive programs we have at the federal and state level), cheap and mass produced clothing, worker’s rights, women’s rights, racial equality, most medical products (like antiviral medications, antibiotics, x-ray, MRIs, etc.), supermarkets, affordable food shipped from around the world, and so much more. What would your life look like?
You wouldn’t recognize it. If you lived 150 years ago you’d heat your house with a fire and cool it by opening the window. When the doctor comes he would be more likely to blood-let you than he would to tell you to wash your hands. Your income would most likely depend on your physical labor on a farm or in a small factory. If you lost your job there would be absolutely nothing but charity from your neighbors and church to depend on.
The advancements we have made since the industrial revolution are shocking. They are a blessing. They happened so fast. And we take them for granted. In fact, much of America has gotten to the point where our continued prosperity is assumed. Predictions of our demise as the world’s economic and military hegemon are entertainment.
Because of this assumed perpetual prosperity and the comfort that the Fed will save us from ourselves if we get into trouble, individuals have acted increasingly irresponsible over the last few decades.
Baby Boomers and Generation Xers have gone about buying houses they can’t afford, boats they don’t need, running up their credit card bills, and generally misusing the prosperity that they were born into thanks to prior generations. Not to say that there are many industrious and upright people in those generations, nor that we haven’t grown in prosperity during their time. It’s just that entire generations of Americans never seemed to grasp the fact that the prosperity we are so lucky to have is fleeting and depends on the amassing of good economic decisions by individuals. No, that variable rate mortgage with 1% down is not a good idea!
However, there is a massive bright spot. I believe that Millennials are making a noticeable improvement when it comes to self-awareness of both our country’s good economic standing and the fragility of that condition. According to the Fordham Political Review and a study by UBS, because we came into adulthood in the midst of the Great Recession, as well as numerous Washington budgetary showdowns, Millennials are more fiscally responsible than their parents — a reaction similar to the generation born during the Great Depression. Not to mention, many of us saddled ourselves with massive student loans (this Millennial included). That economic upheaval and our early experiences with debt have made a huge impact on how we view and make economic and business decisions.
Just take a walk through the blogosphere and you’ll see dozens and dozens of personal finance and entrepreneurship blogs. Minimalism has taken root across the country thanks to Millennials like “The Minimalists.” No, most people don’t adhere to dramatic forms of minimalism, but the tenant of only buying things you need is taken to heart by many.
While economic stagnation and student loan debt has caused many Millennials to delay starting a business, that is definitely going to change as our generation gets older. According to a study by Bently University, we are a very entrepreneurial generation with 67% of us saying that starting a business is a goal of ours. And when we do take the entrepreneurial plunge we don’t simply focus on making a profit, but also on how to do it responsibly.
Combine our early-life economic experiences with our responsible industriousness and you have a generation that might just realize what they have and what they need to do to keep it. Warren Buffet is wise to point out our relative prosperity compared to prior generations and we would be wise to take that reality seriously because it is going to be up to us to not only maintain it, but to grow it.
Thankfully the entrepreneurial spirt of America doesn’t seem to be going away anytime soon.