It was, i think, during my O-level year that my then History teacher, Charles Blount (pronounced “blunt”, and therefore for fairly obvious schoolboy reasons, nicknamed “the count”) introduced me to the notion that the Second World War hadn’t been all bad – at least not economically.
I have to confess to not really being sufficiently qualified to tell whether he was talking any sense or whether his views on WWII, as those on Marx and Marxism, were in any way insightful – or but the ramblings of a reactionary historian forever frustrated that his own literary output had been trumped by the likes of A J P Taylor and Corelli Barnett.
Still, the nub of his argument was that in 1939, Europe and much of the world was still struggling to extract itself from the long-term effects of the depression: and that by blowing up a large part of its capital base, Europe then laid the ground for subsequent pump-priming and capital injection that bore fruits in the 50’s and 60’s. Nothing, i guess, like the long view of history.
Though i have encountered echoes of this very point elsewhere in the economy. It was a standard plaint of Young Liberal Conferences of the 70’s that the way we measured growth was laden with negative values. That road accidents were, in theory, good for gdp, since ploughing your new car into the back of someone else’s new car would generate demand for two replacement vehicles, plus demand for ambulance services, hospital services and probably a host of other add-on services as well.
Because gdp measured economic activity irrespective, destroying things could sometimes have a positive knock-on effect.
Which brings us neatly to last night’s orgy of mindless (?) violence. Putting aside the emotional trauma (which may nonetheless stimulate the therapy sector and create additional demand for counselling and psych services) just how bad, economically, is some of the destruction?
Take the Croydon furniture sellers, who have been on the news pretty much since midnight, bemoaning the way in which a business built up over five generations has been torched. Assuming they are insured – even at simple replacement value – they have just turned over their entire stock in one fell swoop. They have converted uncertain stock assets into cash assets at a point in the economic cycle when cash might be a safer commodity to be holding. And they have received the most incredible public exposure which may yet convert into future business.
Heartless? Ye-es. But the question i am asking…am intrigued by, actually, is how events like last night are likely to play in the wider economy.
Utterly tragic, of course, if your private home has been burnt down: and there is, of course, no real trade-off between personal fear and economic advantage.
But how much damage have the riots done really? To the communities within which they took place? And to the wider economy?