The coming economic boom will be based on new technology
THERE’S going to be the most God Almighty economic boom in a few years time. Yes, yes, I know, you think I’ve really lost it now. What with climate change, resource exhaustion and the current dismal times I’m obviously entirely barking.
However, there’s a good historical precedent for this. The 1930s.
A tiny bit of economics here. Yes, in the short term, growth is all about full employment, interest rates, all that Keynesian stuff. In the long term they have very little to do with it at all. In the long run growth is all about technological advancement. And no, this doesn’t have to be big things either. Working out how to make fewer and cheaper coffee cups lids contributes to economic growth, as does inventing electricity or the internet.
So what actually happened back then? Between 1929 and about 1947 there was pretty much no economic growth at all. Yes, the numbers showed growth in the war but building things to blow them up isn’t really growth. Actual living standards, even in the US, were not better in 1945/6 than they had been in 1928/9.
So there wasn’t any growth. But there sure was a great deal of technological advancement. This is actually the decade when farming was mechanised and the factories electrified. So productivity, or rather potential productivity, soared in these years. Then, when that full employment came back we had the start of a roaring boom that lasted until the early 1970s.
That’s really the story on the post war world. That incredible growth came from all of the things that were discovered and worked out in 1930-1945.
And we’ve economic bad times right now. We most certainly have. But there are still people out there inventing, still people working out new and better ways of doing things. And when we get out of this rut then precisely because we’ve not had much growth now we’re going to have the most God Almighty boom.
We just have to stay alive long enough to see it.
Photo: Several English farmers, faced with a heavy and little help to do it, appealed to the local war agricultural committee and to the American Army headquarters. The Committee provided an American made combine harvester, the army sent trained man to operate the machine. They explain its working to their feminine helpers, August 29, 1942.