The only way is up?

There has been plenty of debate in the media about the economic woes of the country. Commentators warn us that living standards will continue to fall for the foreseeable future and that families struggle to make ends meet. Wages have already come down, and, more significantly, the British economy has actually shrunk since 2008 and, by 2015, is likely to be smaller than in the year 2007 by 14%. This is indeed unprecedented and means that the long upward move of Western economies has finally come to an end. 

I have described the challenges for the British economy and society as a perfect storm in a previous posting and said that what makes the present situation so explosive is that several factors are coming together: a mis-adjusted educational system that is poorly linked with training and workplace skill development; the shift of the manufacturing sector to China and other developing countries with low wages; the slow but steady rise in production costs in China for those goods that we imported since the late 1990s and that had previously ensured low prices for us, fomenting a consumer boom financed by personal and national debt that is now coming to an end. 

An interesting aspect of our recent travails however would be what historians make of it. There is little as yet in terms of a unifying narrative emerging from historical studies, but I did come across something truly amazing recently. Listen to this: 

‘The institutions [of the West] were designed and modified to meet the needs of a booming society. If this [is] true, then the whole modern age would appear to be an abnormal one. By its very nature a boom is a temporal thing, something out of the ordinary run of life, an abnormal state of affairs which is destined to end when the forces that caused it cease to operate. Though this truth is obvious, people do not bear it in mind, even in the briefest periods of unusual prosperity. They act as if the ‘good times’ are permanent, as if the abnormal activity is the normal thing. It seems that their whole psychology is quickly affected, leading them to extravagances they would not ordinarily think of indulging. In short, ideas and institutions begin to form themselves around the boom conditions; the boom itself begins to make history, institutions, ideas, to form a culture complex.’ 

This was written by Walter Prescott Webb in 1951 in his seminal study: The Great Frontier. His argument was that the West (loosely defined as West European and North American societies) had enjoyed a four hundred years boom because of the unprecedented injection of resources through the opening up landmass in America (North and South) and its subsequent colonisation. 

I do not know whether or not he is right. What I do know however is that his words are eerily resonant of the conditions we are experiencing at the moment. Perhaps we are standing at a similar junction in history when we in the UK have to learn to live with less while the people in other countries and continents are catching up. As Webb reminds us: we should never assume that the only way is up.