By concocting Homo economicus, the so-called rational human being who always reliably attempts to maximize his personal utility, they substituted a laughable doppelganger for the authentic human being helped by financial planners. For decades, this dreadful, soulless, dimensionless troll reigned as caricature supreme in economic theory. As an emotionless automaton, Homo economicus single-handedly enabled economists to play white coat scientist while literally denying humanity's essence.
Thankfully, behavioral finance and behavioral economics has emerged to fill this vacuum. At least behavioral economists acknowledge that individuals have brains and emotions. Unfortunately, even behavioral economists deprive individuals of our fundamental dignity, tending to treat individuals as fungible units for slicing, dicing and analyzing from the eyeball side of the microscope. From there, they generally equate emotions with stupidity and irrationality. At least they acknowledge that emotions exist.
Still, they seldom regard victims of large-scale abuse (perhaps those caught up in real estate manipulations and Ponzi schemes) as flesh and blood casualties. Rather, the slicers and dicers tend to see such people as statistical fodder, as victims on their way to becoming Greek letters in an esoteric macroeconomic formula.
These diced slices are our people: our clients, neighbors and loved ones. And these economists are talking about them in ways that hurt them. And us. The insufficient language of financial planners makes it difficult to take our work seriously, with the pride and potency it deserves. We are struggling with words at a time when the work we're doing is critical to the health, safety and welfare of individuals. We are struggling with our words in a world where money and economics shape daily reality and are, in fact, 21st century survival skills. Without proper words, we cannot speak for the individual or explain what has happened with his money. In the tug-of-war between our profession and economics, we cannot hold our end of the rope.
I wonder. If we had had the words in the past, could we have advocated for individuals in a way that altered history? For instance, if we'd had the language to express our concerns about currency integrity, rational interest rates and sound banking principles, would we have let derivatives, and derivatives of derivatives, be created without raising alarm? Would we have let the government repeal Glass-Steagall without protest? Would health care conversations be different now? Would people have ever concocted the phrase "too large to fail"?
The capitalist/socialist/communist dialectic is trite and tired. If articulate theorists could speak for individuals, would these macro theories have dominated public conversation and stifled new ideas? Financial advisors were the proper critics to assert that financial manipulation gimmicks were dangerous to individual health, safety and welfare. What happened?
Of course, these are no small matters to the members of our profession. Financial planning emerged to serve individuals. Its founders believed individuals should be able to access financial products through one knowledgeable sales source. Modern practitioners have matured to recognize even bigger pictures and to accept self-imposed standards of fiduciary care for defining client relationships.
Our relationships with money are among the most important aspects of our lives. Individuals come to financial planners to seek advice and perspective on these relationships. Can we see through their eyes? Can we find the words to connect with them and their issues?
To do the interior, psychological work, we need more information and new views of old information. Perhaps we could think in terms of telescopes and microscopes. With telescopes, we can see the heavens and infer black holes, and we can often know what we are looking at by what is missing (consider Stephen Hawking's work). With microscopes, we can magnify the tiniest details of the smallest units such as the 50 trillion cells found in a human body, inferring levels of consciousness and interaction not visible to the eye (consider Bruce Lipton's research). Both these methods can allow us to work from inference rather than precision while creating language for contending with those inferences.
This is how knowledge and wisdom evolve.