No, I’m not an economist, but I do have a theory about what influences financial decisions, and it has nothing to do with anything Wall Street ever discusses. It’s called the zeitgeist.
This is a wonderful German word for which there is no English equivalent. It denotes the collective thoughts and feelings that dominate the era we live in. While the word zeit means “time,” geist has two meanings: “spirit” and “ghost.” Loosely translated, it means “the spirit of our time” or “the ghost of our time.”
For example, the zeitgeist in the Y2K era was paranoia about computers crashing on January 1, 2000.
The zeitgeist of the dot-com boom was marked by euphoria caused by the illusion of growth without limits. It was a Pied Piper that invited people to join in a happy parade celebrating greed.
The zeitgeist of post-9/11 was like a fire-breathing dragon that attacked at dawn, killed thousands and vanished into an invisible cave, which left us in a cloud of fear and anger. It was marked by severe disappointment. We paid a heavy price for harboring the illusion that our financial, economic, and military power would make us invulnerable.
Today’s zeitgeist is dominated by the bomb blasts at the Boston Marathon, the nuclear saber rattling of North Korean leaders, the political debates about gun control and government spending.
Today’s zeitgeist is also influenced by mobile technology, social media, cloud computing, big data, a shift to an interconnected world that sets the expectation that delays are a thing of the past, since we want to do everything in real time. While technology mixes excitement and hope into the zeitgeist brew, the failings of humanity -- such as killings in schools and at marathons and other threats to our safety -- add a taste of futility and despair to the mix. HG Wells once described the character of civilization as a race between education and catastrophe.
The pendulum of time keeps swinging, and so does the zeitgeist. Psychologists tell us that people who suffer disappointment tend to retreat and rediscover their true strength. What feeds the zeitgeist in the month of April is fear -- fear of acts driven by human insanity or natural disasters. What will change the zeitgeist of our time is courage. It takes a lot of courage to objectively appraise who we really are and what we truly want to get out of life. Upon closer reflection, we begin to realize that the zeitgeist does not really control our lives, we do.
History tells us that periods of disappointment are always followed by periods of going back to basics. For CEOs, that means trustworthy and responsible leadership. For managers, it means that their actions must inspire trust. For salespeople, it means more genuine face-to-face contact and more handwritten thank-you notes instead of hastily punched out texts, tweets, or emails.
Visionary leaders know that the zeitgeist is really a composite of the past that often ignores future possibilities. While today’s zeitgeist urges us to examine the past, we may elude its grip by envisioning and consciously planning a brighter future. Progress demands that we accept the basic insight that’s been taught time and again: our inner strength comes from hope, progress springs from our imagination, and greater meaning comes from building a better future for the generation that follows.