Comfortably numb

There is a particular danger in prolonged success. Failure forces reflection. Crisis creates urgency. Scarcity imposes discipline. Success, by contrast, can slowly weaken all three. When an economy grows year after year, employment remains abundant, property prices rise and consumption expands, it becomes easy to assume that the system producing these outcomes must be fundamentally sound. 

Prosperity gradually stops feeling like something that must be earned and protected and starts feeling like the natural state of things. Expectations adjust. What was once exceptional becomes normal. What was once a luxury becomes an entitlement. And uncomfortable questions about how long it can continue become surprisingly easy to postpone. 

Malta risks becoming comfortably numb. 

This is not an argument that the country is failing. Quite the opposite. We have become extraordinarily focused on outcomes visible today while paying insufficient attention to the systems that determine tomorrow: Education, productivity, infrastructure, institutions, demographics, capital allocation and the quality of our environment. The present keeps rewarding us, so the future struggles to compete for our attention. 

Pharaoh’s dream 

There is an ancient economic lesson hidden in Genesis that feels strangely contemporary. Pharaoh dreams of seven healthy cows followed by seven gaunt ones, and seven abundant ears of grain consumed by seven thin ones. Joseph interprets them as seven years of plenty followed by seven years of famine. But the interesting part of the story is not the prediction. It is the response. During abundance, Egypt stores part of its harvest so that prosperity becomes resilience. The good years are not treated as permission to consume more. They are treated as an opportunity to prepare.  

Modern economics dresses this principle in more sophisticated language: Countercyclical policy, precautionary saving, investment, resilience, fiscal buffers, human capital. The underlying wisdom has barely changed. Good times are precisely when societies should undertake difficult reforms because they possess the resources and political space to do so. 

Yet good times also make reform psychologically harder. Why change something that appears to be working? 

That question sits beneath many of Malta’s current contradictions. We have enjoyed extraordinary economic expansion while productivity remains the harder challenge. We want higher wages but have not sufficiently transformed the productive capacity required to sustain them. We aspire to become an innovation economy while capital continues to find property exceptionally attractive.

We speak enthusiastically about artificial intelligence while recent educational outcomes raise serious questions about foundational literacy, mathematics and science. We celebrate population and employment growth while roads, electricity distribution, healthcare and other infrastructure periodically remind us that systems have limits. None of these observations negate Malta’s success. They expose the difference between generating growth and building capacity. 

Property, predictable returns and incentives 

Property perhaps illustrates the psychology better than anything else. For a generation of Maltese households, property has been an extraordinary wealth-creation machine. Buy, hold, rent, develop and watch scarcity do part of the work. Rising population reinforced demand. Tourism created additional uses for property. Banks understandably became comfortable lending against tangible collateral. Families accumulated wealth and businesses discovered returns that could sometimes be obtained with considerably less uncertainty than investing in innovation. 

As economist Edward Lazear put it: “Incentives are the essence of economics.” If the return from developing property appears more predictable than investing in a technology company, capital will gravitate towards property. If hiring another relatively inexpensive worker is easier than redesigning a business around automation, firms will hire.

If additional tourism generates immediate revenue while changing the tourism model requires difficult choices, volume becomes seductive. If another supermarket, hotel or development produces private returns while part of the infrastructure burden is carried collectively, the individual investment can remain entirely rational even when the cumulative outcome becomes increasingly uncomfortable. 

The problem, therefore, is not greed or some sudden deterioration in national character. It is that we have constructed incentives that frequently reward the present more strongly than the future. 

And incentives eventually become culture. 

Entitlement by unconscious design 

An economy that repeatedly rewards property ownership encourages people to think about wealth through property. An economy that can solve labour shortages by importing workers reduces the immediate pressure to automate. A political system rewarded for delivering visible benefits within electoral cycles becomes biased towards what can be announced today rather than what might transform outcomes in 20 years. A society accustomed to economic expansion begins to interpret continued expansion not as an achievement but as a baseline expectation. 

This is how entitlement develops without anyone consciously designing it. 

The expectations become visible everywhere. Property should continue appreciating. Government should cushion every shock. Taxes should remain low. Public services should improve. Wages should rise. Businesses should remain competitive. Energy should remain affordable. Pensions should remain generous. Roads should accommodate more vehicles. Tourism should continue expanding. Construction should continue generating returns. Consumption should increase. And economic growth should somehow reconcile all of these simultaneously. 

Perhaps it can for periods but not indefinitely without trade-offs. 

Opportunity costs 

The more mature economic conversation begins when a society accepts that every choice has an opportunity cost. Land allocated to one use cannot simultaneously serve another. Capital invested in property cannot simultaneously finance a scale-up. Public money used to subsidise today’s consumption cannot also finance tomorrow’s infrastructure. 

Labour absorbed by low-productivity activity cannot simultaneously perform higher-productivity work. Time spent in congestion is time unavailable for production, family or leisure. Growth itself consumes capacity. 

The danger is that wealth can make these constraints temporarily invisible. 

This is particularly important for Malta because smallness compresses everything. Land is scarce. Infrastructure has limited redundancy. Population growth becomes physically visible quickly. Externalities travel short distances. A development does not exist independently of the traffic, electricity, water, waste and community surrounding it. A thousand additional cars are not an abstraction when they enter the same limited road network. Another hotel is not simply additional tourism capacity when workers, transport, water, waste and energy must support it. 

The individual project may make perfect economic sense while the cumulative system becomes progressively less efficient. 

That is why the big picture matters. 

The big picture 

The education debate provides perhaps the starkest example of our distorted time horizon. The latest evidence on educational attainment should concern us profoundly, not because Malta suddenly lacks economic opportunities but because education operates on a completely different clock from GDP. Improving the literacy of an eight-year-old contributes virtually nothing to next year's economic growth figures. 

Yet 20 years later that child may become the engineer designing our infrastructure, the entrepreneur creating intellectual property, the doctor supporting an ageing society or the policymaker confronting problems we cannot yet imagine. 

Human capital compounds slowly. Education, institutions and productivity require patience before their returns become visible. And this is precisely why societies underinvest in them. 

We increasingly want the outcomes of long-term investment without accepting its timetable. We want Nordic productivity with Mediterranean informality; Singaporean efficiency without its relentless focus on human capital. We yearn for higher European wages without sufficiently increasing output per worker. We want world-class infrastructure without confronting difficult decisions about how we use roads, land and energy. We want transformation without disruption. 

Sustainable prosperity does not work that way. 

This is why the seven good years matter. Their lesson is not pessimism. Joseph did not respond to abundance by predicting inevitable catastrophe and withdrawing from economic life. He used abundance to create resilience. The prosperity of the present became the insurance policy of the future. 

Malta should approach this period in exactly that spirit. 

Strong economic growth gives us room to manoeuvre. We can invest in education before skill shortages become debilitating. We can reform pensions before demographics force harsher choices. We can redesign transport before congestion becomes completely paralysing. We can upgrade energy infrastructure before reliability constrains investment. We can direct more capital towards innovation while the property market remains strong. We can deepen governance and institutional capacity without waiting for institutional weakness to become economic weakness. We can rethink the growth model while it is still growing. 

That is infinitely preferable to reform imposed by crisis. But doing so requires abandoning one of the most seductive assumptions of successful societies—tomorrow will resemble today. It rarely does. 

The economist Hyman Minsky’s great insight was essentially that periods of stability can themselves encourage behaviours that eventually make systems less stable. Success changes risk perception. People become more confident, leverage increases and yesterday’s good experience becomes tomorrow’s assumption. The principal travels beyond finance. Long periods of economic success can reduce the perceived urgency of reform precisely when countries possess the greatest capacity to undertake it. 

Prosperity an anaesthetic 

Malta’s challenge is therefore not that we have become prosperous. It is that prosperity risks becoming anaesthetic. 

William Gibson famously observed that “the future is already here — it’s just not very evenly distributed”. Perhaps the more uncomfortable truth for Malta is that the future is already visible too. It is visible in our classrooms, productivity statistics, roads, electricity networks, demographics, property market and patterns of capital allocation. None foretells catastrophe. But together they tell us that the prosperity of the next 20 years cannot simply be extrapolated from the prosperity of the last 10. 

The answer is not austerity, pessimism or an economics of less for its own sake. It is an economics of maturity. It means distinguishing wealth from consumption, investment from expenditure, activity from productivity and today’s comfort from tomorrow’s resilience. It means recognising that sustainable prosperity operates on a slower clock than politics, property markets and quarterly GDP. 

Perhaps our greatest risk is therefore not economic collapse. It is comfort. Because when things are going well, warnings sound unnecessarily negative, reform feels unnecessarily disruptive and sacrifice appears unnecessarily painful. Until eventually the future that seemed distant arrives. 

The seven good years were never the problem. The question was always what we chose to do with them.