Rip-Roaring Success is a funny thing: we assume it’s the goal of every person, household, enterprise and nation, but we overlook that rip-roaring success can be as destabilizing as failure.
Rip-Roaring Success can destabilize in a number of ways.
One is the result of human nature. Those who didn’t make it onto the Roaring Success Bus feel the gap widening most keenly. Indeed, psychological studies find we assess our wealth and social position not by the actual material prosperity we have, but by the narrowing or widening of the perceived wealth gap with our peers.
This is precisely the situation in the U.S. and China. Both economies are supposedly expanding smartly, but the gains are concentrated in relatively few hands; the Roaring Success Bus has few seats.
The vast majority perceive themselves as being left behind. That is highly destabilizing.
The second is a function of systems and human nature.
Every extreme eventually tends to revert to the mean, which is another way of saying that extraordinary growth rates of profits, stock market advances, etc. that characterize Rip-Roaring Success eventually return to merely average rates of growth.
This inevitably disappoints all who thought outlier rates of growth were permanent features of the system: Apple iPhone sales, China’s GDP, etc.
This disappointment greatly exceeds the actual decline in the rate of growth, and the oversized reaction tips the system out of stability.
The collapse in the price of oil can be seen as an example: once oil was no longer behaving as expected, i.e. holding to $100/barrel, the reaction was swift and outsized.
The third is a function of organizations and systems.
Organizations that are hugely successful quickly lose interest in controlling costs. The money is pouring in so fast, every idea is presumed to be worthy of development, every functionary is presumed to need an assistant, and lavish parties celebrating the organization’s roaring success become the norm, along with hefty bonuses and grand expansions of benefits.
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