Monday, January 16, 2006

Maslow’s Hierarchy of Needs and the U.S. Economy

This article was written as food for thought:

Today, when all is well in the economy, rarely does one need to worry about physical survival or safety, as there just isn't enough time in a day, and it's not relevant to the life we live. With a decent paying job, a roof over our heads, food in the refrigerator and gas in the car, we are content with our personal survival & safety, but we tend to worry about other things... Things that we believe will enhance our love life, our family, self-improvement or the larger society as a whole. We think of our career progression, how to improve our relationships or sexuality, improved material status symbols (a big house, Hummer in the driveway, Plasma TV, etc), morality issues (equal rights for everyone, abortion issues, gay marriage, feeding the homeless, welfare, etc), and we make an attempt to figure out and solve the world's problems (this Blog is a good example).

You are probably asking: Why is this relevant? How does this relate to Maslow's Hierarchy of Needs and the Economy? Well, that is an excellent question, and I'm glad you asked. Allow me to first try to explain Maslow's Hierarchy of Needs and then show how the two are interrelated.

Maslow's Hierarchy of Needs is a hierarchy of five levels of basic human needs (illustrated in the pyramid below). Beyond these needs, higher levels of needs exist. These include needs for understanding, esthetic appreciation and purely spiritual needs. In the levels of the five basic needs, the person does not feel the second need until the demands of the first have been satisfied, nor the third until the second has been satisfied, and so on. Maslow's basic needs are as follows:

Physiological Needs
Our biological needs: The need for oxygen, food, water, and a relatively constant body temperature. They are the strongest needs due to mans need to survive

Safety Needs
When all physiological needs are satisfied and are no longer controlling thoughts and behaviors, the needs for security can become active. Adults have little awareness of their security needs except in times of emergency or periods of disorganization in the social structure (such as widespread rioting). Children often display the signs of insecurity and the need to be safe.

Needs of Love, Affection and Belongingness
When the needs for safety and for physiological well-being are satisfied, the next class of needs for love, affection and belongingness emerge. Maslow states that people seek to overcome feelings of loneliness and alienation. This involves both giving and receiving love, affection and the sense of belonging.

Needs for Esteem
When the first three classes of needs are satisfied, the needs for esteem can become dominant. These involve needs for both self-esteem and for the esteem a person gets from others. Humans have a need for a stable, firmly based, high level of self-respect, and respect from others. When these needs are satisfied, the person feels self-confident and valuable as a person in the world. When these needs are frustrated, the person feels inferior, weak, helpless and worthless.

Needs for Self-Actualization
When all of the foregoing needs are satisfied, then and only then are the needs for self-actualization activated. Maslow describes self-actualization as a person's need to be and do that which the person was "born to do." "A musician must make music, an artist must paint, and a poet must write." These needs make themselves felt in signs of restlessness. The person feels on edge, tense, lacking something, in short, restless. If a person is hungry, unsafe, not loved or accepted, or lacking self-esteem, it is very easy to know what the person is restless about. It is not always clear what a person wants when there is a need for self-actualization

OK, you get the point. These basic human needs impact everyone and the later needs can't be achieved until the lower needs are fulfilled. So, how does the issue relate to the economy? I'll try to explain that next.

Today, all seems to be well in the U.S. economy and we have money in our pockets, so we rarely have to worry about the lower level needs (food, water, shelter, survival, etc). But what will happen to us if we experience a drastic change in our lifestyle and we lose our job, lose our car and house, and we don't have enough food to feed our children? No longer will we care about material things, looking pretty or "equal rights for all of humanity". Our whole train of thought will change and we will concentrate on the instinctive need to survive! We will do anything and everything possible, including risking life and limb, to support that survival instinct.

What then, happens to a society when millions of people simultaneously lose their jobs and homes due to an economic crisis, and the little savings they have left is made worthless through rampant inflation and massive monetization? It will be real ugly my friends! The Social fabric of society will break down, survival instincts will kick in and it will be a dog-eat-dog world.

Remember Katrina and Louisiana? The Government had several decades to plan for this worst-case scenario... Did they do anything? Was there an effective plan?

If you think the government has a "Master-Plan" for fixing the problems with our economy, we really need to talk because some of my prime swampland in Florida is currently for sale--CHEAP!

I personally hope it never comes to this, but our economy is in such serious trouble, an economic crisis is not an impossibility several years down the road.

Worst-case scenarios are not pleasant to think about, but they are worth thinking about. Everyone needs to plan for their future as best they can, with what they know and understand. These future plans are usually developed by forecasting what is likely (or possible), and then adapting the plan to that condition.

How would you and your family react to something like an economic breakdown and the ensuing chaos? Are you ready today? Are you preparing towards that end, or do you feel this could never happen and even if it does, the government will take care of you and your family?

Personally, I do not believe the government will look out for my family's welfare and in the event of economic chaos, we will be on our own...

Remember, everything that we think is important today is really trivial with respect to our need to survive. When man has lost all hope and becomes desperate to feed his family, nothing remains sacred... Ethics, Values, Morals and the fabric of society is thrown out the window... SURVIVAL is the dominant need... everything else is secondary.


Anonymous said...
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Anonymous said...

Yes, good post. I would like to take it further and say, we are going to have an economic crisis. So let's assume the dollar collapses and people's paper wealth is wiped out by 70-80%. For example your 401K which is worth a million dollars loses 50% of its value, and at the same time hyperinflation inflates all prices by 50%. Well, you are now poor. What will people do when they realize they are broke or their dollars are worthless and all the material crap they have accumulated is worthless? Let's talk about the socio-economic effect. What does society do? What do people do? Better yet, how can we prepare? Should we run to the hills? Stock up on ammo, food, etc? Liquidate all our paper/dollar bases assets? I personally have been liquidating everything I own that I don't need. I started by selling my house in 2005. I cashed all my paper investments including 401ks and bought precious metals. I have 6 months water and food supply and bought extra ammo. What else can we do?

contrarian2day said...

"What do people do? Better yet, how can we prepare? Should we run to the hills? Stock up on ammo, food, etc? Liquidate all our paper/dollar bases assets?"

If I had a crystal ball and the ability to answer all these questions, I would most certainly be far better off than I am today.

Sounds like you are preparing for the worst and I can't fault you for that.

If I had the financial wherewithal and didn't have to worry about career, family stability, etc, my plans would be much different, but I'll most likely have to ride out (in place) the economic storm until it passes, and hopefully I will be able to keep my Job and won't have to resort to guns/ammo for safety nor have to tap into savings for daily survival.

Though I honestly feel I am far better prepared than most, I still feel woefully unprepared none the less.

Though not financial advice, I would encourage folks to get out of debt,convert any agressive 401K or stock positions into conservative areas, purchase as much gold/silver as possible, and yes, possibly convert some of your excess dollars into Hard currency funds (e.g. MERKX) or currencies (e.g. Yen)

Though not really and answer, I really hope this helps.

Bottom line: Do what you feel is best for your situation.

No one can predict (with certainty) the future and if TSHTF badly, I think everyone, regardless of prior preparation, will feel unprepared and helpless.

Nemesis said...

"What do people do? Better yet, how can we prepare? Should we run to the hills? Stock up on ammo, food, etc? Liquidate all our paper/dollar bases assets?"

Running to the hills is a great idea. I wouldn't want to be in an American city when it hits. Other points re danger of cities are explained by James Howard Kunstler (sp?) search term Clusterfuck Nation.

I think the financial advice offered may be sound, and I am not offering any financial advice. However, I suspect that repostioned finances will still be subject to forfeiture, freeze, etc, when it hits.

I would recommend brushing up on the Skills of Survival. eg, you mention ammo, but do you know how to shoot, or to hunt? How about learning to grow food (practice in small veggie gardens now), how about food processing/preparation? eg: dressing game, preserving vegitables, can you cook unprocessed foods? Others include sewing, mechanical repairs, first aid, herbal and home remedies, home entertainment. Learn the skills your grandparents had, and which you lost.

Good Luck. We are all going to need it. Great Blogs like this will help us get there.

Nemesis, Australia.

moladi said...

Well said! Having implemented moladi on a global basis one realizes more and more that we need to support the "bottom of the pyramid".

Have a look at how we help @

All the best

John Q said...

I like the scheme presented here describing and contextaulizing basic human, and I might add, at least with the top tier need for survival, the animal instinct for survival.

I would only extend it further to explicitly take into account the laws of thermodynamics (i.e. matter cannot be created or destroyed, the universe tends toward a state of disorder or entropy). The implications of these Laws for, to use a dated term, mankind hit me a number a years ago.

It seems to me that from law of entropy one can draw a direct line to our present predicament. Because all creatures strive to ensure their survival and that means securing food, shelter and, in the case of our species, clothing, then it follows that the best way to do that from an individual standpoint is to, on one hand over-produce (preferably by exploiting others) so as to never run out and, on the other hand to hoard. This to me is the material basis of greed. The instinctual fear of not having enough and starving.

Moreover, is this not the basic defect of market economies or ooooh Capitalism? The system over-produces, the elite hoard as much of the surplus as they can get away with and the masses are left increasingly gasping. However since it is the masses that produce the surplus, squeezing them ever harder tends to reduce the rate of surplus creation because the masses cannot consume (buy) at the increasing levels necessary to raise the rate of of profit. It is in the forms of profits, after all, that the Capitalist elite hoard the surpluses created within the system. Thus new means have to be introduced to keep it all going. This is where debt and financialization come in. Through these techniques or mechanisms the elite can continue their hoarding and the masses can keep up consumption. Except that, as we see today, this is a edifice built on quicksand and will eventually sink into the depths. This is partly because of the exhaustion, in its many forms, of the masses and, of course, resource limits (i. e. Peak Oil, Climate Change, water, soil and air pollution . . . etc.). In sum, while we as species have created these massive economic edifices so that only a few could delusionally believe that through the hoarding of massive wealth they could permanently stave off entropy, in actuality they have succeeded in accelerating the effects of the law of diminishing returns as well as entropy on an individual and planetary scale. This, by a supposedly intelligent species.

Randy said...

John Q,

Excellent Analysis/insight - thank you for posting it up!

Ien in the Kootenays said...

Fascinating blog, thanks.

May I also recommend the cultivation of good relationships with your neighbors? We all have complimentary skills.

I have home-grown herbal remedies, know some Healing Arts, grow a decent garden and can raise and butcher chickens, but don't ask me to nail 2 boards together.

We "ran to the hills" more than 30years ago. Back then many of us were convinced "the system" was going to collapse around our ears any day. No regrets, it has been a great life. I am here out of love, not out of fear.
At some points the 'prepare for the collapse' idea became a joke.
I guess the moral of the story is that the wolf eventually did come.

I will buy some more grains and legumes to store, and try harder to save seeds this year.

Meanwhile, we also have a severely stressed planet on our hands. This economic freak-out may the best thing to happen to Her.

Gary said...

Well, I do not actually imagine it is likely to have success.
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The economy is in bad shape alright.


A bad economy.