Cyclical upheavals, routine shock

Every few years, we have a downturn. This is not a very surprising thing to say for

history has taught us that periods of prosperity are
interspersed with those of
economic tightness. This means that ever so often, good times will give way to bad, economies that were booming will stagnate (Japan for the last 15 years), companies that were star performers will struggle (Sony) and countries that were superpowers will find themselves going through a rough patch (Russia after the end of the Cold War). Sometimes these changes in fortune will be of a longer duration and occasionally, we will see a change in the order of a more permanent kind.

Things move in cycles. This is a simple truth. Then why is it that we find ourselves in such a tizzy when we come across a routine, frequently recurring phenomenon? Why are we so unprepared both commercially and emotionally, to face the transient challenge of economic hardship? In India's case we are not shrinking, merely slowing down our rate of growth. But even if we were to talk about the developed world why do we find ourselves in such a state of desperation today? The idea of the market is that there will always be losers; the market celebrates the unequal nature of the world and sees it as the reason why individuals are driven to achievement.

For everyone who is buying when the price is low, someone is selling at the same price. Why do we celebrate the discriminatory nature of the market in good times and run to the referee the moment the market as a whole takes a dive. Isn't that too part of the market mechanism?

More importantly, we know this will pass. Just as we knew this would happen, but for a large part, chose to believe otherwise. Experts told us that the growth would be sustained for longer. The story seemed compelling then just as today the recession story seems equally inevitable. Of course, this had to happen; hindsight loves inevitability, just as foresight skirts around the cyclical nature of reality.

And yet, the story of humankind is nothing but a sustained battle against the stubborn inevitability of Nature. For nature imposes its bloody-minded gods on us that do not allow any event or phenomenon to continue unhindered. Night foils day, winter shrivels summer, good monsoons get rudely interrupted by droughts.

Civilizations flourish and tumble, species multiply and die, mountains become oceans and grasslands turn to sand. Which is why the idea of progress is based on pushing back the constraints imposed on us by nature. Culture seeks to harness biology as well as to thwart it. The manmade replaces the god-given as we set out to dismantle the power of natural phenomena, physical constraints and cyclical upheavals.

Technology has helped us erase the experience of most cycles. Electricity has turned night into day, air-conditioning has made summers quilt-friendly and cosmetics and medical science have postponed both death and age. Viagra has reduced the consequences of age while contraceptives have eliminated the tyranny of the fertility cycle. Menstruation continues its reign, albeit with a little less certitude and it is only a matter of time before this cycle too, is tamed.

The rebellion against cycles and the belief in an unbroken journey towards more reveals itself in other arenas of life too. Classical music, with its carefully extended rhythm and its spirally unfolding structure, works over too long a period of time to be popular. Cricket too leans towards the T20 format with its compression of ups-and-downs. In the West, most marriages do not survive the first emotional downturn that couples encounter and the quest for unbroken excitement creates a sweeping disregard for the psychic debris that is gathered in its wake.

So why should business be any different? Why should it not pretend that the market should perpetually rise and why should it not judge individual companies on a consistently upward performance every single quarter? Why prepare for bad times when you can sack thousands ever so often? Why not feed into the huge anxiety that such downturns generate and cadge a few billions from panicky governments?

The animal kingdom understands the rhythm of cycles and works to create a sustainable future for itself. Mating, breeding, feeding and migration occur cyclically and are all geared towards long-term survival. The male emperor penguin spends 115 days without a meal while incubating its offspring while its mate spends the winter at sea. It does not see deprivation and abundance as two separate phenomena but recognizes that they are part of a single process, something we seem curiously unable to do. We react to these two phases as if they are unrelated and need to be managed independently. We do not prepare in good times for bad and vice versa.

So right now we believe that we need to do something dramatic to get out of this cycle. It's almost as if we don't believe in the market any more. For India, the disconnect is even greater as we rush to embrace somebody else's reality as our own. Eventually things will get better. And then we will again forget that they will, very soon get worse again.