history lessons

There are some who see a cycle of boom and bust as inevitable. But as Britain and much of the Western world faces up to a downturn, it's easy to look back into the past and find nasty decades, BBC offers historical perspectives on hard times. The article looks at three periods (England in the 1440s and 14450s, Britain in the 1840s and Rome in 270AD) and examines why the economy was faltering. The article misses out completely the colonial exploitation (resulted into famines to all possible adjectives of hard times in economic terms) the European has done to their respective colonies in the 18th, 19th and early 20th century.

mercantile movie of all time...

…Taxi Driver, claims Robert Mundell, FT columnist John Authers has the goop:

John Hinckley, the deranged would-be assassin who attempted to kill Ronald Reagan in 1981, claimed that he was inspired by [Taxi Driver]… According to Mundell, the wave of sympathy for President Reagan that was engendered by the assassination attempt deterred Democrats in Congress from voting against his proposed tax cuts. Due to this accident of history, the US administered a big fiscal stimulus at the same time that Paul Volcker at the Federal Reserve was administering tight money. This, for Professor Mundell, was vital in creating the era of prosperity that followed.“Taxi Driver is the most important movie ever made from the standpoint of creating GDP,” Mundell told delegates. “It’s the movie that made the Reagan revolution possible. That movie was indirectly responsible for adding between $5 trillion and $15 trillion of output to the US economy.”

india's booming service sector

Stephen Broadberry and Bishnupriya Gupta look at the historical roots of India’s booming service economy. “Our research demonstrates that India’s recent service-led development has deep historical roots. During the colonial period, India’s comparative productivity performance was already better in services than in industry or agriculture. This emphasis on services is in line with much recent research on long-run growth among the developed economies, which finds services playing a key role in comparative economic performance in the late nineteenth and early twentieth centuries as well as during more recent times.”

capitalism crisis?

Wity as ever, Winston Churchill once said, "capitalism is a bad system, but the others are worse.” Samuel Brittan looks at how booms and busts have been features of capitalism since the beginning. “The beginning of wisdom is to recognize that financial booms and busts have been a feature of capitalism from the very start. Indeed they are as deep-rooted as human gullibility and greed. Charles Kindleberger’s "Manias, Panics and Crashes" impressively documented this. He has a table listing more than 30 such events, starting with the South Sea bubble of 1720 and ending with the New York Stock Exchange crash of 1987. Although some analysts have tried to discern a periodicity in their occurrence, I can only see an irregular succession with some crises succeeding each other at intervals of about a decade so beloved by old-fashioned business cycle theorists, but others coming hot on the heels of their predecessors after only a couple of years.

who says big ideas are rare???

Malcolm Gladwell in NYT has says that history of science is full of ideas that several people had at the same time