A new Paradigm? Probably not

Paradigm Shift

[tweetmeme source=”ChazGunningham” only_single=false] Beware those telling you “it’s a new paradigm” or talking “paradigm shift” – it rarely is. In fact, such talk is so fanciful that you should pretty much discount everything the ‘paradigm shifter’ is telling you and assume the opposite. Paradigms don’t shift that much. They are invariably here to stay.

Aristotle (300 years BC) proposed new laws that governed how bodies moved. It was a radical departure from the received wisdom of the time. 16th century astromist Copernicus postulated how the planets rotated around the sun. Before then, the Earth was the centre of the universe – duh! Charles Darwin blew everyone’s 19th century mind with the Theory of Evolution and natural selection, providing an elegant explanation for the diversity we see around us that does not rely on a Creator. Einstein’s Relativity replaced swathes of Newtonian Physics. Keynesian macroeconomics told us governments could ‘prime the pump’ and spend their way out of a depression (rather than letting the market cure it with price decreases and deflation).

These were paradigm shifts. These people threw their theoretical hand granades into established wisdom, and the world was never the same again. We all moved off in a new direction, with a new understanding and our eyes a little more open.

Sadly, like the sports commentators who seemingly have to use the word “unbelievable” to describe just about anything they see (“an unbelievable passing shot from Serena Williams!!!“… errr no, we all just saw it, we believe she does this sort of thing all the time), so the concept of “paradigm shift” is over used so as to make it meaningless. A long run up of share or house prices has to be a paradigm shift. This is a new way of things we are told. It’ll never crash like it always has before. When grannys who should know better are investing their last nest egg into some speculative venture that is being spruiked as a new paradigm, head for the hills. We were told everything was fine in the late 1990s and that the new economy was a new paradigm. (It was actually, but that did not mean all business would instantly translate online.) We were told the run up in the financial sector in the 2000’s was a new paradigm with new financial instruments leading to a new heaven. Talk to Iceland, US, UK, Spain, Portugal and Greece about how that turned out. In 2006 a WA politician (who should have known better) described the mining boom as a new structural reality (three words where ‘new paradigm’ would have done).

No, paradigms do not shift very much. Completely new ways of looking at an established ‘truths’ are rare. It can happen, but it usually needs some genius to lay out the new way of things, and is preceded by years of work by said genius. These people are rarely spruiking stocks, financial instruments or whole sectors of the economy. You have been warned.

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