In
all fairness though, in my commentary a quarter of a century ago, I
was not even thinking that we would be thinking in terms of a massive
slump sometime around 2010, give or take a few years.
From
a personal point of view, I was remember suffering a stroke at the
very end of 2004, barely able to speak or read, and I was assuming
that I would die before too long. One of my clearest patterns of
thought was something like, "Is this it? And was I wrong in
believing that the economy was going to collapse?" Or even, had
Gordon Brown got everything right? Had I got it all wrong, this would
have been a depressing time to die.
Fortunately,
for my self-belief, I could see that between 2007 and 2008, after the
crash, I could see that I was not totally wrong.
My
own view, as analysed in the 1980s, was that after a long period of
economic upswing, of apparently steady growth, we do not suddenly go
into a deep crash, a sudden accident, and then recover, no problems.
It
is much more a case that the economy starts to get overstretched, as
in the mid 1960s, the recession gets slightly stronger than the
upswing the weaknesses do not get eliminated, the next recession
cannot be fully compensated by the following recovery, and so on, and
we tend to get stronger and stronger downswings, until there is a
"slump", and the depressive sequence is so over-extended
that once there is any sort of upswing, there is so much investment
and innovation that the upswing suddenly tends to be of great
strength. Many of the weaknesses have gone, but the strengths will
survive.
The
downswing takes a long time, 1966-1983 (17 years), or 1914 to 1933
(19 years), and the upswing lasts for twice as long.
The
only way that made sense to me was that the crash of 2007/8 and its
aftermath was only the start of a long deep downswing, and not the end
result. We later saw the euro-zone crisis, and just at the moment we
are having another economic crisis in Russia. The final slump and
recovery might well be in or from China, then even the fastest
growing economies could easily go into reverse.
2007
was the start of the downswing, and not the downswing itself. In
2014, and continuing through 2015, British output per capita is
still no higher than in 2007, and at some stage there will be some
sort of recession. Is the buoyant hosing market, for example, quite
as strong in the next few years as in the past few years?
Despite
the gloom of the last few years, and discussion of the "global
recession", there is still plenty of opportunity for world
growth. It is just that it is not happening in the "advanced
economies" of Europe or north America. Other countries, notably
in Asia, are catching up, in terms of living standards.
(Later: my own definition, from the 1980s, of what is technically meant as a "slump")
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