A Different Economy

This will sound very familiar, but it’s not what you think.  Read on, since you’re in for a surprise.

 America had heard that the pandemic was coming, so we should have been bettered prepared.  It found its origin in China, but when it arrived on our shores, it devastated everything before it.  Hot consumer spending fell off a cliff and the consequence of it all was that job losses soared.  Businesses hung in the best they could but many were forced to close up for good, even their larger operations.  Stocks dropped by 20%.  A global recession ensued.  Tens of thousands of people died. 

It was the year the Frisbee was invented.  And the year that Elvis Presley appeared on the Ed Sullivan show.  Canada publicized the manufacture of the Avro Arrow, Russia launched Sputnik, John Diefenbaker was the Prime Minister of Canada, and Dwight D. Eisenhower was sworn in as U.S. President.

You can be forgiven for thinking that I got my timeframes wrong, but what we are going through at present also happened in 1957, with the arrival of the Asian Flu.  Author Jeffrey Reuben drew this comparison in his new book, not so much to show the similarities but the differences in what happened next.

Stock markets recovered quickly in 1957 and 1958 and went right back to generating and distributing unprecedented wealth to citizens because that’s what they did back then instead of fast-tracking the riches to the upper classes.

Will this be the successful pattern political and economic leaders will follow after COVID?  Not a chance.  Back in the 50s, most wealth generated domestically in America (Canada as well) stayed within the country, resulting in massive infrastructure investments and job training.  Today, a huge portion of wealth generated nationally goes into the world market, away from anyone’s ability to apply it to local investments.

It’s true that consumerism is even more heated than decades previous, and that stock markets set records seemingly every other month.  But these are no longer the real economy that we, and our parents, once knew.  More and more of a nation’s wealth is being generated by investing in financial endeavours, not infrastructure ones.  While it’s true that items still must be manufactured, they are rarely built in North America but in cheap labour regions in developing nations.

There was a time when good labour was required to make money if you were a hardware store or a corporation like Ford or Imperial Oil.  The success of the product depended on the dedication and skill of the worker, and the evidence was clear that the worker remained loyal and dedicated because of the salary and benefits they earned.

There were clear reasons why the Asian Flu of previous decades didn’t crush the world economy the way that COVID has.  The work force was strong.  The companies were dedicated to their products and their communities.  And governments were investing in national wealth not global opportunities.  There was clear political will amongst all parties to renew the country from the ground up: universities, hospitals, transportation of agricultural products to all parts of the land, better roads, airports and ports.

These clearly are no longer the priorities of governments, though there is the recognition that such things are important.  But they take money – funds that have already fled our shores.  Instead, we hear about the job market being strong.  That doesn’t seem to jive with our personal experience as Canadians.   The jobs today are largely in the service sector, minimum wage, no benefits, and workers are frequently driven to hold down two jobs to afford rent and food for their families. 

It isn’t the same economy as that of the Diefenbaker era.  It’s not based upon the empowered worker as the fundamental driving force of the economy.  The employed are frequently defined more as distributors of someone else’s product instead of the builders of the product.  There is a huge difference in this distinction, and until wealth is poured back into the growth in capacity of our workforce, the growing chasm between the new economy, where few benefit, and the old, where a rising tide lifted all boats, will continue to pull us economically downward.