The last few weeks have been a watershed of bad news from harrowing images out of Afghanistan to raging forest fires across the world, a poignant illustration of climate change in action. Sometimes the temptation is to put our heads under the duvet and scream in frustration and helplessness or just seek a few moments of peace and quiet.
And yet, there I was at a cross generational lunch table a few days ago with many young back from recent festivals full of challenging ideas and it dawned upon me that we are facing our own Woodstock moment of radical societal and financial changes!
The end of the Vietnam war in 1975 and ignominious retreat from Saigon, coincided with startling and fundamental changes in society. Gallup trends indicate that in 1969 the majority of Americans disapproved of premarital sex and frowned on interracial marriage; half opposed first-trimester abortions, and many thought gay relations should be illegal (1) . Today’s demands for greater equality and diversity and consideration for our planet are our Woodstock moment.
Finance was not immune either; on the 15th of August 1971 Nixon was forced to abandon the US$ currency peg to gold as the cost of war escalated and ushered us unexpectedly into a new monetary world of “fiat” money. Money was no longer backed by gold. Some of the unintended benefits of this were cross border capital flows financing innovation, delivering rising global standards of living and taking 1bn people out of poverty. However not everyone benefitted from this decades long globalization party and era of light touch regulation. Covid has starkly revealed a disenfranchised strata of society.
The next “r-evolution”, of how we live and finance the world is here. How does climate change risk influence our behaviour? Is Covid is challenging some of our societal norms? And how is the advent of digital finance changing how we spend and save?
Change is always uncomfortable but often provides significant opportunities for positive outcomes as well as interesting investment opportunities.