I was listening to an interview the other day and heard the best piece of economic news I've heard in over 2 years. The person being interviewed was talking about changes in urbanization in North America and he said he doesn't think of the current economic situation as a recession, he thinks about it as a resetting of the economy. That got me thinking.
His point was that in the two most dramatic economic pull backs in the last two centuries, there was a corresponding seismic shift in how we worked and how and where we lived. And after the pain of resetting, the world emerged and prospered for a significant period of time.
Consider the economic turmoil of the 1870's. By all accounts the world was in economic ruin. The colonial empires of Europe were beginning their long, slow decline. The largest bank in the US, Jay Cooke and Company, failed. The speculative bubble after the civil war burst. Labor unrest was epidemic, leading to riots in Chicago, San Francisco, Pittsburgh and New York.
Or the Great Depression of the 30's, the economic disaster that's still only a generation or two away for most of us. A stock market collapse, followed by a banking collapse, followed by massive business closures and unemployment.
But the fact is, significant change and yes, advancement, came from both these periods. In the 1870's, an agrigarian society moved to an industrial one, significantly increasing our production capabilities, creating the huge factories and huge relocation from rural areas to the dense urban centers. Immigration swelled North America with millions determined to create a better life. There was massive change, which always brings pain and unrest, but also advancement. One can't seperate the two. They come as a package.
As the world emerged from the Great Depression and the Second World War, we began the move to the suburbs and the Great American Dream, brought to you by Kelvinator, Pontiac, Maytag and hundreds of other bread and butter brands. A second wave of immigration brought new dreams and aspirations to our borders.
Techonology always moves faster than humans. And, in the shift, entire societal frameworks have to be reinvented. This never happens incrementally or smoothly. History has shown us that existing infrastructures have to be torn down and new ones erected. Through the process, human emotions run rampant, which flood our ever so fragile economy. This has always been the way, and it will always be the way, because we are who we are. Our mental hardware hasn't changed in thousands of years.
But in this reinvention, this resetting, we build the foundations for the next stage of our ongoing story. And in this regard, there are tremendous reasons for economic hope. If you rise above the micro view and look at the macro picture, the efficiency of the digital marketplace is extraordinary and will provide the greatest boost to our productivity in history. Forces of globalization are leveling wealth distribution and the tide is raising all boats. Science is on the verge of hundreds of life altering breakthroughs on almost every front. The global standard of living has never been higher, along with life expectancies and levels of education and health care. The challenges are not so much economic. There we just have to rebuild sustainable infrastructures to accommodate the new realities of enhanced potential and get rid of some nasty habits of over consumption. And while we're working through the process we have to make sure we don't rape our planet beyond repair.
The world is not in bad shape. We just have some significant house cleaning to do. This will not be fast (we're in the middle of a huge transition shift, so think decades, not years) nor will it be painless. But if we handle it correctly, it could be the biggest jump forward in history.