Investing in Civilization

Chapter 5 of Anthony, W. and Guard, J. (eds) (2009) Bailouts and Bankruptcies. Winnipeg: Fernwood Press. It asked how the state might solve the current crisis, by asking how it solved the two comparable crises of 1893 and 1929. In each case, a prolonged world slowdown was followed by financial chaos, then turmoil provoking strong state activity, leading finally to a period of prolonged growth. In narrowly economic terms, this was a solution.

It presented two main conclusions. First, the scale of state action needed is vastly underestimated, above all by economists. Second, this action cannot be purely economic. Past crises on the present scale were resolved though “civilisational” change: far-reaching cultural and social transformations, many of which we still live with, that shaped the entire following epoch. Their profound economic impact is wrongly neglected.

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