“The good thing about being a pessimist is that I'm either always right, or pleasantly surprised.”
Robin Ayers, author
New Years are normally welcomed in a spirit of hope and opportunity, but 2022 is the exception which proves the rule. Whether it's the economy, the prolonged virus emergency or international tensions, there are plenty of reasons for people to feel pessimistic about the future - and the Economic Research Council (ERC) reports that this is indeed the case.
The Dow Jones finished the first week of 2022 reflecting this gloomy stance, possibly in response to President Biden's ‘dagger at the throat of democracy’ speech on 6th January, but more likely taking fright at the prospect of rising US interest rates. Major tensions remain in the United States, with the Republican Party still firmly under the influence of the former president. We need American democracy to be strong at a time of sabre-rattling in Russia, Kazakhstan and China - so this is not the time to revisit the American civil war.
The United Kingdom also reflects this pessimism, and in this commentary we look at the ERC's demographic findings in search of some clues for the way forward.
The Economic Research Council’s findings are that pessimism is rife at present, with the main pressure being on the middle-aged, on women more than men, and away from the South East. The inevitable conclusion is that anxiety over financial security is driving pessimism more than anything else; the exception to this being among high earners, who may be reflecting worry over potential higher taxes in their heightened concern.
It's not surprising to find that financial security is causing real worry - it probably causes more sleepless nights than anything else, particularly for those with family and other responsibilities. But there is a tsunami of insecurity at present, largely brought about by the virus emergency. At individual level, the combination of rising inflation and business instability is a toxic mix. The latter should prevent the former from becoming embedded through a ‘wages-prices spiral’, but it does imply downward pressure on the standard of living - hence the insecurity and pessimism.
What can we do to steady the ship? Just telling people that they must live within their means is not the answer. There are two major steps which could help rebuild a sense of security:
The first is a genuine determination to make levelling up a reality, and it's good to see Michael Gove making a start in his new role as Secretary of State for Levelling Up, Housing and Communities. As we've said in the past, levelling-up is not a geographical issue: it affects the whole of society. It means giving hope and opportunity to the young, and making it possible for all to benefit from the wealth which results from the technological revolution.
Our work on moving forward a more egalitarian form of capitalism provides specific answers, and the resources, sense of involvement and life skills that it brings should do much to address financial insecurity and provide the opportunity to be more optimistic for the future.
The second is to ask ourselves the question: is our modern secularism causing us to become too self-centred, too focused on ‘poor me’?
There was deep financial insecurity throughout the 19th century, and it's difficult for us to determine the extent of pessimism that this engendered – there were no surveys of general opinion and, although there’s plenty of literature from those days, it's all somewhat anecdotal.
However, there was a real difference in the extent to which people held and practised their religious faith, which provided rock of stability when times were hard. It wasn't just spiritual - it was community-centred, and drew extensively on the second commandment to ‘love your neighbour as yourself’. There's a good account of this strong community involvement in a book called 'Christians and Social Work' by Kathleen Heasman: published in 1966 but now sadly out of print.
Decades of affluence following the chaos of the Second World War have led to an intense secularisation of society, so that now less than 2% of the population attends church. So when we’re hit hard by insecurity, we no longer have anything to fall back on. Meanwhile the Church itself has not set a good example of selflessness, beset by internal squabbles and a failure to visibly connect its community action - which still carries on in abundance - with its ministry.
The level of pessimism identified in the ERC report is too important to be passed over - it needs tackling on many fronts: some personal, some governmental, some international. As we said before Christmas, we must democratise capital to provide a genuine levelling-up transition; but we must also stop feeling so sorry for ourselves by re-discovering the rock of faith.
And if such a recovery can take hold at an individual level, perhaps national leaders and governments will learn to stop taking such a belligerent stance towards each other.
There’s some hope for 2022 ..
Gavin Oldham OBE