Opportunity and Hope

Hi, all! Thanks for writing with ideas on what you’d like me to cover. Keep ‘em coming! One request was FTX, and given how the details of that debacle keep changing, only one thing seems constant: this is a governance story. So I’m working on a piece about denial in corporate culture and how to foster the opposite of that in any business. More to come.

This week, as we move through the holiday season, I want to write about opportunity and hope.

I’m defining hope as “belief that a better future is possible” and opportunity as “the available possibilities to improve one’s situation.” Hope and opportunity are intertwined in a reinforcing loop: the more opportunity I have, the more hope I tend to have. And the more hope I have, the more motivated I tend to be to work to increase my opportunities. (As an additional benefit, the more hope and opportunities I have, the more goals I tend to achieve, and—ideally—the happier I tend to become.)

But reinforcing loops don’t always act as virtuous spirals.

That’s true. One of the worst sensations in life is hopelessness, because then the reinforcing loop starts to work against me: the less hope I have, the less motivated I feel to work on increasing my opportunities. And the less I work to increase my opportunities, the fewer opportunities I tend to have. And then the fewer opportunities I have, the less hope I have. Yikes. 

In broad strokes, that’s what’s happening among younger generations bearing the brunt of various opportunity-decreasing trends like: 

• Public education budget cuts and teacher shortages; 

• Rising college tuition and burden of student loans; 

• Disappearance of pensions as a job benefit; 

• The rise of high-deductible, narrow-network health plans and long wait times;

• Housing, food, and healthcare inflation outpacing wage increases;

• Projected shortfalls in government pension and medical care funds;

• Massive and unavoidable future costs of mitigating climate change.

Ouch. Opportunity is taking a beating. But until now, a segment of the population did well despite these pressures by exploiting the remaining opportunities. Bank savings accounts paying 0.01% instead of 5%? People got on board with the stock market because TWNA (There Was No Alternative). Wages in most industries not keeping pace with inflation? People re-trained and entered technology and finance. 

What’s happening now is that those engines are finally sputtering, just as climate change crosses the threshold from distant bogeyman to imminent catastrophe. Opportunity is starting to shrink even for the segments of the population that previously found safe harbors. And as opportunity shrinks, hope almost always suffers. 

We’ve seen the results of faded opportunity before. In general, unless they become completely hopeless, people tend to take more risk to reach for whatever opportunity still remains. And if opportunities aren’t available, people will try to create them—or fall for people who promise them. It’s a human tendency. If society and government don’t foster environments for healthy risk taking leading to real and significant rewards, people will engage in more unhealthy risk taking because YOLO.¹

In large part, this explains the Gamestop mindset, the willingness to take bigger risks because many traditional paths upward don’t work anymore but there aren’t enough high-potential alternatives, so these risky paths are honestly better than nothing.

Reversing the vicious spiral

On the other hand, if people are getting a fair deal from a societal system, they generally will roll with it instead of trying to upend it. That’s why shocked cries of, “No one wants to work anymore!” are almost comical. People typically will take on work if the short- and long-term rewards are commensurate with or exceed the effort asked. But if they’re not keeping up with inflation, and they have limited benefits, and their future prospects are dim, why would they want to? Why wouldn’t they just play video games and try to eke out enough to survive? Or, alternatively, invest in long-shot stocks and play options and take a moonshot with whoever is willing to promise the moon? 

Franklin Roosevelt understood this important truth: the way out of a downward spiral isn’t to fuel anger by taking away the remaining opportunities and flexibility that people have or perceive they have. The way out is to invest in creating better opportunities with real and significant and lasting returns for people and thus, eventually, for societies. The Inflation Reduction Act, with its funding for green energy, is a good although not perfect example. Building more starter homes would be another. Implementing single-payer healthcare in the US could be another, lowering costs and increasing flexibility (and thus opportunity) for businesses and individuals almost across the board. 

Opportunity and hope are leverage points. Not just to increase growth or profit (though they can do that), but also to increase well-being and spark innovative approaches to problems. So, this holiday season, despite all the stresses and debacles raging outside, I wish you opportunity and hope. 

1. You Only Live Once.