The 21st Century’s Oedipus Moment

Robert McGarvey © 2021

Every century has its own violent passions and historical blueprint; the 17th century was a struggle for religious freedom, the 18th brought us the Enlightenment and political revolution, the 19th launched industrialization while the 20th century was a violent struggle for democracy and human rights. Each epoch had its deeply entrenched establishment and in each case that establishment was deferred to, then tolerated, and finally tossed over - sometime violently.

The 21st century is just starting and already it appears that we’re in for more excitement and another establishment that’s about to bite the dust.

This time it’s the aging boomer establishment that will be facing the wrath of history. Born in the aftermath of world war, the boomers enjoyed the spoils of that war and the peace that followed. Almost unprecedented opportunity awaited this privileged generation; a strong growing economy, relative cheap commodities, including housing and almost free education. These advantages set the boomer generation on their way with relative ease.

The generation that will lower the historical boom is the millennials. Compare their situation with their parents. Unlike the perfect storm of opportunity the boomers inherited, the millennials are facing a stagnating economy, riddled with debt. Sadly, the prospects for personal advancement are stacked against them.

Whereas the boomers enjoyed an economy where wage growth matched productivity growth in lock step. Today globalization and other changes have created an economy where productivity (the value of labor) is continuing to expand, while wages (the price of labor) have basically flat lined. For millennials there is no chance of working hard at a wage paying job and getting ahead - the game is fixed and labor loses every time.

The present generation has been told that if they get an education it will set them on the road to success. That advice turns out to be somewhat dated; yes a post secondary degree is valuable but opportunities to apply these skills are few. Moreover, university is shockingly expensive today; students carry a mortgage-sized debt burden before they’ve even started.

If a millennial decides to settle down and have a family, they’ll want to buy a house. By the time they’re in the housing market they’ll have so much debt that when (not if) interest rates return to normal they can expect to lose everything in a giant default and foreclosure panic.

But the biggest betrayal is much more subtle; boomer parents encouraged this generation to ‘be all that you can be. Millennials rejected the idea of becoming ‘cogs- in-the-machine’ and became the most creative generation in history, with vast numbers of designers, musicians, dancers, authors, playwrights and other wondrously creative talent. Regrettably after decades of support and encouragement from their families, they’ll enter an economy that has limited ability to accommodate these talents or desires.

Will the millennials collectively shrug their shoulders and lower their expectations as they come to maturity, awaiting their pitiful fate humbly? Not if history is any guide. This generation will soon tire of tolerating the establishment and, when pushed beyond the point of no return, will toss aside that establishment and reinvent their own much better future.

This Oedipus moment for the millennials will come with when the debt crisis blows up. Facing ruin they’ll launch one of the most profound revolutions in the history of humanity.

It’s not exactly murdering your father, but it amounts to slaying the mindset, institutions and structure of financial power that father built.

Step one will no doubt be a market induced collapse in asset prices (including housing) which must be followed by a giant debt Jubilee. Ironically Jubilees’ have a long history and were very popular in the ancient world. From that point onward, the millennial knife will start to carve up primary institutions.

How do you finance a new economy so that individual creativity has a chance to breathe? You start by blowing up the existing capital markets and altering the flow of capital in our economy. At a minimum dismantling so called financial ‘service’ industry and reforming the present central bank dominated monetary system and replacing it with a new monetary system that’s not placing a debt burden on each dollar created in the economy.

And the irony is, it will not be difficult to accomplish. Few of us today realize how arbitrary the rules of the game are, and how simple it would be to change the rules and radically alter the future.

Hang on to your hats, we won’t have long to wait for this exciting historical moment, and I for one, am anxious to see what a new generation can do.