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Four ways economic crises can change things for the better

https://theconversation.com/four-ways-economic-crises-can-change-things-for-the-better-138751

theconversation.com

Four ways economic crises can change things for the better
If there is one lesson from history, it is that the economy will pick up again.

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WWI and women working

WWI and women working

Over a century ago, women in the UK weren't allowed to own property, open a bank account, or work in a legal or civil service job.

When WW1 broke out in 1914, over a million women joined the workforce over the next four years to keep the economy going, even in jobs that were not previously open to them.

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WWII and the NHS

The National Health Service (NHS) was established in 1948 and is funded from general taxation. Before the NHS, people were expected to pay the hospital or a private doctor if they needed to use medical services.

WWII necessitated government-supported medical services to become freely available for everyone.

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More people go to university

Recessions and the lack of jobs that ensues can lead more people to pursue education. This progress also affects subsequent generations.

A more educated workforce tends to make an economy more productive and profitable. The knock-on effects include society's health, lower crime rates, voting, and volunteering.

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Creative destruction

Economic crises often purge inefficient or out-of-date structures. New entities emerge in their place.

In early 2000, the Nasdaq stock exchange crashed after years of the share prices of online companies rising. Underperforming firms that based their growth on the hype around the internet closed. But the crash accelerated the rise of eBay, Google, Amazon, and other tech companies.

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SIMILAR ARTICLES & IDEAS:

Our culture of work

Our culture claims that work is unavoidable and natural. The idea that the world can be freed from work, wholly or in part, has been suppressed for as long as capitalism has existed.

Exploring the abolition of work

  • In 1885, socialist William Morris proposed that in the factories of the future, employees should work only four hours a day.
  • In 1930, John Maynard Keynes predicted that advances in technology would lead to an age of leisure where people might work 15 hours a week.
  • Since the early 2010s, these ideas have been developed further, creating a growing critique of work as an ideology, and exploring alternatives to work.
  • Post-work offers enormous promises: In a life of much less work, life would be calmer, more equal, more communal, more pleasurable, more thoughtful, more politically engaged, more fulfilled.

Work ideology

The work ideology is not natural nor very old.

  • Before the modern era, all cultures thought of work as a means to an end, not an end in itself.
  • Once the modern work ethic was established, working patterns started to shift. Between 1800 and 1900, the average working week shrank from 80 hours to 60 hours, and in the 1970s to roughly 40 hours.
  • In 1979, Bernard Lefkowitz related in his book that people who had given up their jobs reported feelings of "wholeness." During the same period, because wages were high enough, it became possible for most people to work less.
  • During the 80s, work ideology was reimposed by aggressively pro-business governments who were motivated by a desire for social control.
  • By the early 21st century, the work culture seems inescapable.

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    Two of the biggest innovations

    Two of the biggest innovations

    Two of the biggest innovations of modern times are cars and airplanes. At first, every new invention looks like a toy. It takes decades for people to realise the potential of it.

    Innovation is driven by incentives

    There are three types of incentives:

    1. "If I don't figure this out, I might get fired." It will get you moving.
    2. "If I figure this out, I might help people and make a lot of money." It will produce creativity.
    3. "If we don't figure this out now, our very existence is threatened." Militaries deal with this, and it will fuel the most incredible problem-solving and innovation in a short time.

    During World War II, there was a burst of scientific progress that took place. The government was in effect saying that if a discovery had any possible war value, then it had to be developed and put in use, regardless of the expense.

    The conditions for big innovations to happen

    The biggest innovations seldom happen when everyone's happy or safe. They happen when people are a little panicked and worried, and when they have to act quickly.

    In 1932, the stock market fell by 89%. It was an economic disaster where almost a quarter of Americans were out of work. However, the 1930s was also the most productive and technologically progressive decade in history. Economist Alex Field writes that in 1941, the U.S. economy produced almost 40 percent more output than it had in 1929, with little increase in labor hours or private-sector capital input.

    A new playbook

    Growth evangelists are right when they state that severe lockdowns produce a parallel human misery of unemployment, looming bankruptcies, and extreme financial anguish. Yet, opening the economy too...

    The false choice

    “Save the economy or save lives” is a false choice.
    A group of economists published a paper on the 1918 flu outbreak. Their findings revealed:

    • Early and aggressive interventions saved lives and triggered a faster rebound, such as job growth and banking assets.
    • Without a healthy population, there can be no healthy economy.

    The hope is for a deep, short recession, to show that people have shut the economy down to limit the spread of disease.

    A living wage

    Asking millions of able-bodied workers to stop working creates a crisis of unemployment.

    During this time, the U.S. is expanding unemployment benefits and are also delaying tax filing. In northern-European countries, the government is directly paying businesses to maintain their payrolls to avoid mass layoffs and furloughs.