This is going to sound pretty odd to some of you, but it's one of those macro trends that have been on my radar since roughly before the crisis started in 2008. I'm talking about the current trend toward minimalism in general and its many offshoots in particular, what long term impact that trend might have on GDP, and whether or not there are any minimalists on Wall Street.
My grandmother was born in San Francisco in 1901. By the time Prohibition was in full swing, her and her younger sister accumulated a respectable pile of money selling wine they made using a recipe from the old country. My grandmother took her share of the money and bought a bakery, which struggled mightily before going under. Her sister took her end and bought San Francisco real estate. You can guess how that ended up.
I mention this because my grandmother lived with us while I was growing up. To say that the Great Depression made an impact on her would be a vast understatement. By that time she was married with three kids, the bakery was on its way out, and her husband was a struggling delivery driver. They didn't have it as bad as some, but it was no picnic. My mother was too young to really remember anything before WWII, but the austerity affected her a great deal as well.
Needless to say there wasn't a lot of waste in my house growing up. We weren't minimalists in the modern sense of the word, but everything in the house served a purpose and there wasn't a lot of fluff (save for the "living room", which was occupied by slipcovered furniture no one was ever allowed to sit on). Growing up in that environment, you'd think it would have stuck with me.
If coming of age in the 1980s taught me anything, it was that he who dies with the most toys wins. The heroes of the day were Tony Montana, Gordon Gekko, and Michael Milken. For those who've read Liar's Poker, you know what I'm talking about. It didn't matter how you made your money, just that you made it and spent it conspicuously.
This accelerated through the 1990s, the decade that brought us the McMansion. Everything got bigger, and keeping up with the Joneses became the national pastime. Nowhere was this more prevalent than on Wall Street, where we felt compelled to take excess to ridiculous levels. Hookers and blow became.
Then came the Zeroes, with the interest-only ARMs and Trader Monthly. Everyone in America was a real estate speculator, and Wall Street was printing money. Hell, even the ops guys were in on the act. Perhaps the high water mark that should have signalled that the whole house of cards was ready to come down was A.J. rolling out to Cain on a Thursday night.
The other side of the coin
I retired from. I hit my walkaway number and I walked away. I convinced myself that I'd make my next fortune as a novelist. That's where I first became aware of the countercultural movement that we now know as minimalism.
I joined a writer's group where we'd get together once a week and critique each other's work. One of the other writers in the group used to hand out copies of his work which were clearly typewritten, and one day I asked him about it.
"Bro, are you still using a typewriter?"
"Yeah," he answered, offering no further explanation.
"Well, isn't easier to write with a computer? And a word processor? I remember what it was like to make corrections with a typewriter. How do you keep from losing your mind?"
"It's just something we decided to do in my voluntary simplicity group."
"Your what now?"
"Voluntary simplicity. You know, leading a simple life, not spending money where you don't have to, trying not to be wasteful, that kind of thing."
Suffice it to say that in 1999, this was nothing short of revolutionary talk. The Internet was taking over the world and now I'm finding out that there are groups of people rejecting it all voluntarily because it complicates their lives needlessly? Absolute heresy.
Yet while society churned itself toward oblivion, more and more people dropped out and the movement evolved. The thirty-year binge that began in 1980 led to one of the worst hangovers in American history when everything ground to a halt in 2008. There has been a seismic shift on both Wall Street and Main Street ever since.
Enter modern Minimalism
The most obvious change on Wall Street was that conspicuous consumption was out. There were practically lynch mobs roaming the streets looking for bankers having a good time, so toning things down became a matter of survival. At one point in 2009 there was a company offering a tour bus to the hedge fund managers' mansions in Connecticut just so the hoi polloi could throw rocks.
Then Occupy Wall Street happened and anti-capitalism went mainstream. Dodd-Frank, though a poor substitute for Glass-Steagall, brought with it a bevy of new financial regulations. All of a sudden it wasn't as much fun to be a banker.
All the while, a generation of kids were coming up who experienced the whole boom-bust firsthand. Maybe their parents were over-leveraged and lost their home. Maybe they were saddled with a ton of student loan debt. Maybe they just saw all the negative things that overconsumption breeds and turned off to it. But today there exists a significant portion of the population, and a vastly more significant portion of the younger population, who are simply opting out of consumption in favor of minimalism.
This takes many different forms. There are the digital nomads who wander the globe at will, taking work online where they can find it, and paying for experiences rather than possessions. There are the tiny house people, who are opting to live in spaces 400 sq ft or less. There's the whole vanlife movement, who prefer a life on the road and living in a van down by the river. There are other offshoots of minimalist lifestyles too numerous to list.
I'll be the first to admit that they're all on to something. They've made the move from anti-capitalism to deliberate capitalism; i.e. there's nothing wrong with buying something useful or enjoyable, just don't buy more than that. As someone who was raised to believe that success meant making as much money as possible, owning a big house and fancy cars, and letting the world know that you had "made it", I find a lot to like in minimalism.
But now I wonder about the downside. Now that the bloom is off the rose of conspicuous consumption, what effect is that going to have on the economy? Our GDP is dependent upon consumer spending and, if we're being honest, having those consumers spend more than they make. What happens if an entire generation just checks out of that system?
If I were single and in my twenties or thirties, there's no way you'd catch me showing up at a job every day. There are just too many ways to make a living in your underwear these days. You're not going to get rich, but you'll keep a roof over your head and beer in the fridge, and you'll work when you want to, not when your bill collectors tell you to.
So that leads me to wonder about minimalism on Wall Street. Surely there must be minimalists in the business, right? I mean, it's the perfect career to get into, make a bunch of money, and then check out of before 30. With even $500,000 in the bank at 30, you could probably go the next 25 years without punching a clock.
Do they exist? Do any of you in the business consider yourselves minimalists? Remember, this site was basically established by digital nomads who came from banking, so there is precedence for it.
Should we be worried about more people doing more with less? Will it have a measurable effect on GDP, or is it just a fad?