Seven Sins, Inc.

Facebook, Financial Crises And The Corrosion of Society

Ev on Unsplash.com

I fear the Day technology will surpass our human interaction. The world will have a generation of idiots -Einstein/Powder (1995)

This week, Facebook’s CEO faced two days of intense questioning from members of the US Congress about Facebook’s inability to protect the privacy of its users data. I must confess I am a social media addict. The immediate gratification, that the red notification symbol on Facebook or the retweet of my tweets on Twitter offers, is second to none. I am hooked along with many in this day and age. From Snapchat to Musical.ly, I have an account on literally every popular social media platform.

All of these observations combined with Mark Zuckerberg’s testimony before congress led me to an examination of my own crude behavior. I am sure a lot of people share my angst. I do not know if a statutory warning that says “social media addiction is injurious to health” will be enough to deter our excessive indulgences but I do know that our behavior can corrode the foundations of social relationships. Sharing every moment of our lives may lead not just to loss of privacy but also the loss of our humanity. This article looks at how businesses and ultimately society can be driven by the seven deadly sins. From time immemorial, these sins represent primordial instincts that will never go away. They can just be managed and balanced.

Without self regulation, the outcome of societies and entire civilizations is not hard to imagine.

Greed

The list of financial crises is a timeline of greed peaking at various times in human history. We go from greed to restraint to greed again. The disturbing trend is that the number of bubbles across the world is increasing.

The Economist

The biggest global contagion the world has witnessed in recent history is the global financial crisis of 2008–09. By the end of 2009, half of the world was in recession.

Wikipedia: World map showing real GDP growth rates for 2009 (Countries in brown were in recession.)

The greed to profit from subprime mortgages engulfed not only banks but countries, rating businesses, the middle class, the taxpayers, and workers around the world.

Bloomberg/NYTimes

The after effects of the 2008 crisis still linger on. As per a McKinsey survey in 2017, asset bubbles have emerged as one of the top risk to country growth especially in developing countries. Developing countries also have a very vulnerable middle class that relies heavily on debt and typically has lower savings especially when real inflation outstrips wage increases.

McKinsey Economic Conditions Snapshot, Sept. 2017

While there is a lot of literature on the 2008 Financial Crisis, I would recommend reading the The Financial Crisis Commission Report and the Squam Lake Report to learn more about the crisis.

Envy

Fear of Missing Out (FOMO) is a modern day euphemism for envy. The crypto currency frenzy in 2017 resulted in rampant speculation in Bitcoin, Ethereum and Initial Coin Offerings (ICO’s) in general. China had to ban ICO’s because tokens became the passport for paper tiger businesses to raise money. Even without any business model whatsoever, a white paper became the prospectus for an ICO. When investors look at their neighbors becoming billionaires overnight, envy pushes many a soul to gamble hard earned money for explicitly speculative goals. As is the case with any new and disruptive technology, smart investors pull out their capital leaving the average joe with worthless assets and a future faced with destitution. It is hard to affix blame on Ponzi scheme operators because they cannot thrive without human envy. The sooner we understand that there are no free lunches, the better.

While ICO’s raised a total of $5.6 billion in 2017, many investors lost money due to FOMO or envy. It is also true that tokens, overall returned 12.8x the investment compared to 7.7x for Ethereum and 4.9x for Bitcoin (businessinsider.com), the overall story masks individual reality.

Businessinsider.com

In college, I interned at an equity research firm for a few months. I would walk through Dalal Street (Mumbai’s equivalent of Wall Street) and hear stories of people who mortgaged their house to gamble in stocks. The outcome, as you can guess, was never good.

Lust

An entire industry runs on lust (by some estimates, a $97 billion juggernaut) Countless magazines depend on lust. Websites that promote the pursuit of ‘Sugar Daddies’ to pay off student loans thrive along with websites that promote married men to have affairs.

Some might say all of these business keep marriages from breaking apart. While there may truth in that argument in some cases, lust drives a lot of movies, magazines and an entire industry. Most of all, it has driven the oldest profession in the world through the ages.

For all business bound by sin with their clientele, it’s hard to make even a small moral argument. But then again, it upon humanity to make the right choices.

Sloth

The word “sloth” is a translation of the Latin term acedia (Middle English, accidie) and means “without care”. Sloth is the hardest sin to define but can be viewed as unwillingness to exert oneself. It is also synonymous with not working, laziness and idleness.

In the modern world, not exerting enough in the right direction or lack of discipline to do the right thing are good examples of sloth. Mental exertion can take many forms such as reading about complex ideas or reading extensively in general ie depriving the mind of healthy nourishment. Physical sloth can mean not exercising, working hard and not putting enough effort.

To my mind, watching excessive entertainment and idling away time without physical exertion are clear examples of my laziness. Taken to its extreme, it may mean not willing to earn money for family or abdicating basic duties as a member of the family.

For instance, nobody knows how many jobs Artificial Intelligence (AI) will take away through automation. However, what I see as sloth on my side is not doing anything to reskill myself for the new world order.

Gluttony

Gluttony included excessive indulgences of any kind ie sugar, fat, alcohol, opioids or other controlled substances especially damaging to the youth of any country.

OECD.org

Although gluttony is defined with respect to food and there are many victims of overeating, the modern world has seen something more sinister and that is addiction.

Wrath

While all out conventional war is inconceivable and assures total destruction, the world always seems to be swinging between diplomacy and saber rattling. In addition to countless lives lost, the severe economic burden of war is unimaginable.

Anger comes in many shades.To me, getting angry at loved ones, using inappropriate language and posting negative comments on social media that publicly display my anger are all forms of wrath.

Pride

In Greek mythology, Narcissus’ undoing was that he fell in love with his own reflection. The modern day equivalent is being smitten with our own image on Facebook waiting for those likes to pour in.

To my mind, my display of narcissism has surpassed my need to stay connected with my friends and family. Truth be told, I don’t need Facebook to stay connected to my closest friends and family. We have to collectively assess if all of us are caught in the same warp of comparing our lives to others and highlighting the times we feel superior and then pasting those photos on Facebook. I don’t remember having opened an album of old family photographs or even an old high school photo and smiling. However, I do remember feeling like Narcissus each time I open Facebook to admire my supposedly perfect life by looking at my most liked photographs.

I keep asking myself these questions in no particular order: is this why I post on Facebook? Are my narcissistic tendencies getting the best of me? Is this what everyone does today? Are we sharing every single moment of our life just to realize they were not private? Rather, they were data points and the lifeblood of marketeers exploiting my narcissism to create a never ending cycle of consumerism.

Honestly, I don’t have an answer. While Mark Zuckerberg was testifying before congress, I realized that a part of the blame lies on me for sharing every data point in my life. That there are no guarantees of privacy was always my default assumption.

Don’t Argue With The Devil

When the balance in a business tilts towards one of the seven deadly sins, our behavior that drives that business has passed the tipping point of humanity. When a society becomes a collection of such actions driven by sin, that society faces an imminent collapse. I am not a doomsday prophet. However, my own mistakes scare me. The darkness inside me comes out often enough for me to wonder about the collective future of humanity. Hubris and hedonism have been a human trait since time began. What is needed time and again is self control.

Pope Francis, the Argentinian Pontiff, advised people to not argue with the devil. The devil is much more intelligent than us and will win. The Telegraph (UK) reported Pope Francis saying: “He is evil, he’s not like mist. He’s not a diffuse thing, he is a person. I’m convinced that one must never converse with Satan — if you do that, you’ll be lost,” he told TV2000, a Catholic channel, gesticulating with his hands to emphasise his point”

Pope Francis’ words ring true in my mind each time I decide to indulge in comparison with other people, entertain negative thoughts or think bad thoughts in general. The problem with conversing with the devil is that it is a slippery path. He always wins and the lure of sin becomes too powerful to overcome.

Treasure The Conscience

I am not certain that Seven Sins, Inc. could overshadow global GDP which is estimated to be around $85 trillion. That is because it is a dark, empty place devoid of humanity. Also, toll on society and human lives cannot be quantified. It is certainly higher than the collateral damage i.e. the monetary value of our actions.

My intention behind writing this article is not to criticize Facebook or any other business for that matter. I don’t have any authority or expertise to do so.

My intention is to curb my own unbridled pursuit of some of the seven deadly sins through self criticism which begins with curbing my narcissistic tendencies on Facebook. It is also to empathize with others who feel the same way as I do. It is amazing how frequently our society faces a crisis in several different spheres.

An active conscience is a great asset. I hope we treasure it because when all else is done, the onus is always on us. It is very easy to blame others for mistakes. However, it is very hard to acknowledge our role in the largest mistakes namely the financial crises or the loss of our privacy on social media.

Charlie Munger says “Incentives are a superpower”. I agree. The incentive to give up indulging in the wrong behavior is to get love and respect in real life. Two things that are becoming increasingly difficult to get. Add to that, the fact that you need money to pay your bills everyday.

This has been my hardest story to write because I am no expert on the wide array of topics I wrote about and the above words represent my feelings. Secondly, I am guilty of some of the sins as many would be.

Finally, I leave you with these words from the great poet Jalāl ad-Dīn Muhammad Rūmī, on god:

Finally, I looked into my own heart and there I saw Him; He was nowhere else.

As they say in opera, it’s not over until the fat lady sings. Using that metaphor in real life, it is our job not to give her the microphone.