Economic crises often purge inefficient or out-of-date structures.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.
MORE IDEAS FROM Four ways economic crises can change things for the better
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.
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.
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.
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.
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.
John Maynard Keynes (1883-1946) was interested in the level of national income and the volume of employment rather than in the equilibrium of the firm or the allocation of resources.
He was still concerned with the problem of demand and supply, but “demand” in the Keynesian model means the total level of effective demand in the economy, while “supply” means the country’s capacity to produce. When effective demand falls short of productive capacity, the result is unemployment and depression; conversely, when demand exceeds the capacity to produce, the result is inflation.
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