Productivity Growth and the Quest for Self-Actualization

It’s often said that art imitates life. A natural, albeit less sexy, extension of that truism is that economic progress imitates life. Three main forces drive the economy: (i) the short-term debt cycle, (ii) the long-term debt cycle, and (iii) productivity growth[1].

Fiscal & monetary policy drive short-term debt cycles, which typically last 10-15 years. Long-term debt cycles last closer to 100 years, and have historically culminated in large-scale wars, significant debt restructurings and transitions of global powers. For example, the German debt crisis and hyperinflationary period during the late 1910s and early 1920s set the stage for Hitler’s rise to power and World War II. These short-term and long-term debt cycles cause inevitable boom and bust cycles, leading to periods of minor and major economic progress and contraction. However, over the long-term, productivity growth – predominantly through technological innovation - drives sustained economic progress. Examples include:

• The Cognitive Revolution & emergence of fictive language[2] 70,000 years ago;

• the Agricultural Revolution & domestication of plants and animals 12,000 years ago;

• the Scientific Revolution, including the invention of the printing press, 500 years ago; and

• the Industrial Revolution, including the invention of the steam engine, 200 years ago[3].

These economic forces imitate the successes, challenges and opportunities for growth that drive our lives as human beings. Each of us experience the ups and downs of everyday life, like closing a sale, spilling our coffee, finishing a great book and losing a football game. These minor incidents collectively occur within the trappings of large-scale events that have major influences on the direction of our lives, such as the birth of a child, crashing a car, getting promoted, getting divorced, or surviving through a pandemic. While we often have little to no control over these major events, we do control how we respond to those events and can ensure a good life through the quest for self-actualization – or the search for one’s true purpose.

Abraham Maslow identified self-actualization as the highest form of human need, defining it as the desire to accomplish everything that one can and to become the most that one can be. Self-actualization is inherently unattainable as human growth is infinite while human lives are finite. However, we can work towards self-actualization and ensure a life of fulfillment through the process of CANI – constant and never-ending improvement[4]. Conversely, just as the global economy plateaued when productivity growth stalled during the 1,000 years of the Middle Ages, we as individuals stagnate when we stop growing, learning, and self-improving. As Ben Franklin said, “Some people die at twenty-five and aren't buried until they are seventy-five”.

Source: Dalio, Ray. Principles. NY, NY: Simon & Schuster, 2017.

We must strive daily for this most important goal in life – achieving one’s true purpose. As Friedrich Nietzsche said, “If we have our own ‘why’ of life we shall get along with almost any ‘how’”[5]. These feelings were reiterated by psychologist and Holocaust survivor Viktor Frankl, “Life is never made unbearable by circumstances, but only by lack of meaning and purpose”[6]. This quest for self-actualizing can appear to be a daunting task, but focus on progress over perfection. It’s easier to start by figuring out who you’re not supposed to be, eliminating those elements from your life, and focusing on what gives you true joy. Through a never-ending, relentless focus on our individual growth, we can optimize our contributions to society and our personal happiness, come what may.

[1] A subset of constructed languages, distinct from the former in that they have been created as part of a fictional setting.

[2] For a concise summary of these forces, see Ray Dalio’s 30-minute video How the Economic Machine Works.

[3] Harari, Yuval Noah. Sapiens: A Brief History of Humankind. New York, NY: Harper Perennial, 2015.

[4] Robbins, Anthony. Awaken the Giant Within: How to Take Immediate Control of Your Mental, Emotional, Physical & Financial Destiny! NY, NY: Simon & Schuster, 1991.

[5] Nietzsche, Friedrich Wilhelm. Twilight of the Idols. Berlin, Germany, 1889.

[6] Frankl, Viktor Emil. Man's Search for Meaning: an Introduction to Logotherapy. New York, NY: Houghton, Mifflin, 1946.