To work just enough to have as much time as possible to oneself and one’s community is a pursuit as old as economy. Take the Benedictine monks of the Middle Ages, to whose industriousness early capitalism owes so much inspiration. By meticulously arranging their activities to maximize productivity, they allowed themselves more time for the most important pursuit—prayer. Ora et Lebora they said: Pray and Work.
Or consider the more recent systems of pensions and social security, which promise a degree of security for workers in a world where community, family, or connection to the land no longer act as insurance for the aging. So long as workers try hard enough, long enough, the ROI on their savings—entrusted to market experts and the state—will allow them a few years at the end of their lives to live in relative comfort, as a reward for all that toil.
For the generations who can no longer imagine the world lasting until retirement, however, everything is sped up. During the longest post-war market run, from 2008 to April of this year, it’s become possible to serve as your own pension fund. As financial knowledge has become more diffuse, new innovations in escaping the daily grind have been discovered. Of those innovations, none is as accessible and as thorough in its guidelines as the FIRE Movement. Short for “Financial Independence, Retire Early,” the goal of FIRE is to use knowledge taken from the finance world and, in blogs and forums, reappropriate it for mostly middle-class salaried people to achieve retirement as early as their 30s and 40s.
FIRE, like many “movements” much more fitting of the name, has its origins in the 2008 financial crisis. But while that crisis made the cynical workings of financial capitalism painfully clear, definitions of agency in FIRE remain narrowly-defined. “We’re in a society that values capital more than labor,” said millionaire FIREe Jason Long in an April New York Times article. “I don’t like that, but I take advantage of it, I guess.” FIRE gamifies the system as it exists, adhering closely to its rules. The trick is to leverage assets the best one can, in order to retire as soon as possible. Tools of the trade include geeking out on compound interest, optimizing returns on investment, starting rental properties (or, more profitable, AirBnBs), seeking out the best low-fee index funds, and so on.
Like the Benedictine monks, FIRE adherents preach asceticism, or a variant of it anyway. Stripping the anti-consumerist call to action down to its most essential conceit, FIRE makes the old Epicurean argument for finding satisfaction in the simpler, cheaper things in life, so that one may take pleasure in the present while still earning and saving as much as possible.
It’s a nice idea, but history may be proving it a bizarre anomaly. Following the market volatility of the COVID crash in April, it has occurred to many small-time investors how quickly the road to early retirement can be obstructed. In their recent article, the New York Times wrote that as the interest and dividends from their savings plummeted, early FIREes were considering going back to work, while those still seeking early retirement were recalculating their plans considerably. Like the sunken S&P, optimism was low.
Even now, unemployment in the US hangs around 20% (up from 3.5% in February, of course). Everyone's bank accounts and asset values are wrecked. Consumers don't have extra money to spend. Publicly traded companies don't have customers. Fundamentally, the market’s without fundamentals, floating. There is a logical next step to this progression: Stonks go down.
An ominously large number of big names in finance are in agreement on this point. Howard Marks, “the guy that wrote the book on market cycles,” notes that the market today is disregarding all the uncertainties present and the big declines that lie ahead for GDP and earnings. The famous conservative investor Paul Tudor Jones takes those claims a step further in a recent report, predicting the greatest inflationary event of our lives is right around the corner. Nouriel Roubini, an economist who was nicknamed Dr. Doom after predicting the 2008 financial crisis, gives an especially wide-ranging prognosis that foresees several convergent macro factors forcing an L-shaped recovery as the world sinks into a “Greater Depression.” Eccentric billionaire Raoul Pal, who’s now leveraging half his worth in gold and Bitcoin in hopes of trading the crisis, believes a coming solvency event could spell the end of the dollar system as we know it.
Still, many are making the case that another bull market is just around the corner. Despite the S&P’s record-breaking drop of 34% in five weeks, the following pullback was strong enough that the S&P is barely down from the all-time-high it struck in trouble-free times. Positive previews now trickling out for Q2 earnings seem to confirm what many have already been saying: the recession is technically over and the economy is now in recovery. Nevermind that because of the magnitude and arc of greater economic disturbances, markets can be out of a recession while still not knowing whether they are in a depression...
A total decoupling of the market from reality notwithstanding, another financial reckoning still seems imminent. The Fed and Treasury’s responses to the initial crash may be acting as a stopgap, but we also have to consider the rolling shutdowns, the lack of new jobs, bankruptcies, the escalating trade war. Since markets have recovered so quickly, hope has tip-toed back into the pockets of small investors and the pages of FIRE forums. But if the current market rebound is indeed just a moment of suspended animation before a second crash, all those baby sharks who wanted to swim with the whales will soon find out they were merely floating in the formaldehyde of furlough schemes and stimulus checks all along.
That’s my theory and I’m sticking to it. But maybe it’s wrong, and with a higher dose of cash injections and Prozac, we’re about to witness several more years of market euphoria. For that matter, if the goal is to simply stay in the green, there are ways to remain profitable during depressions too. The problem of having faith in the market lies elsewhere, beyond any particular cycle.
Between the pandemic, the crisis, and the uprising, 2020 is already very much the year of hindsight. But it’s also just the latest installment in a series of unforeseeable catastrophes, years of piling-up disasters, punctuated by the occasional black swan event. Within the ever-worsening storm of the last decade, the world clings and bobs along with the same buoy it’s held onto for its security since the inception of the liberal order. The acquisitive drive. Industry, commerce, banking. Economy, in a word.
Models of prediction fail as the finance doom loop spins out of control. An empire is coming apart and, with it, the ideal that appeals to FIRE and the wider middle class alike is giving way. The case for a particular good life, one that could only be attained under the conditions of modernity, no longer holds water.
All the economy has ever really promised the modern world is a kind of calculated stability—the very kind that the religious orders it succeeded failed to provide, incidentally. The structuring of a more compliant, less chaotic world is achievable by continually suppressing the unrestrained passions that once ordered feudalism, forever in favor of the lesser evil passion of greed. Even Keynes believed “the love of money is detestable.” But as he also put it: “It is better that a man should tyrannize over his bank balance than over his fellow-citizens.” That sentiment is intrinsic to the mindset of FIRE.
What’s being laid bare now is the extent to which economy was never more than the next big political theology, and its ideological pillars—lofty concepts like democracy, rights, independence—are performed in service to the major practice, worship of avarice. From treasurers to politicians, the proffered diadem of holding office is accepted on the promise to make the needed ritual offerings to the economic deity. Just think of how quickly failure to do so results in their replacement with more pragmatic arrangements. Think of how quickly those new arrangements rescind whatever liberties we think we have.
The world is still reliant on the invisible hand to make sense of disorder, to root out irrationality, to find a new equilibrium. We need only give the market our faith, our fealty, our passion, our investment. To invest—from the Latin investire, “to clothe in, cover, surround”—is the act of dressing in the robes of office. When we let market forces guide history, we are dressing them in the official robes, that they may act as our guide.
The guide is fatally lost. Economy’s promises can no longer be reliably delivered. With nowhere else to go but down, the accumulation craze that for centuries has animated everyone from bankers to small-time investors is, at the very least, presenting us with a golden opportunity to trace a new path. A new set of passions to invest in, ones that take joy in giving, sharing, expending. Good FIRE plans to burn away all the useless assets like so many Third Precincts, that center Friendly Initiatives & Revolutionary Encounters, that are capable of celebrating just how little we actually need when we find each other. New ethical leanings that achieve the good life not by the perverse pleasure of accumulation, but in freeing joy of relinquishment, of destitution.