Throwing away old paper, I came across an article that could have been written today – with the subtitle: “If the West wants to avoid further crises, it should learn from a long-lost nation: Japan”.
I do not think that Japan is a long-lost nation, and the article (by Michael Schuman in Time Magazine) was not from 2020 but from October 2011. However, the three lessons listed are still very valid:
1. The past need not rule the future.
2. Economic problems can be structural, not just cyclical.
3. Don’t kick the can down the road.
We are still addicted to past paradigms – of economic growth, of globalisation, of a reduced role of the state in the economy. We could learn a lot from Japan on how to adapt to a low growth economy.
Many people expect that after the Corona crisis, the economy would just rebound. We easily overlook that the world did already struggle with structural problems that will not be gone away once the pandemic will be overcome. Climate change, increasing polarisation, and stagnating productivity will stay with us.
We cannot postpone addressing these problems because of the present crisis. The crisis may worsen these challenges by the day. Large expenditures to mitigate the economic crisis may leave less room to address climate change. Polarisation increases between better educated people who can easily work from home and less skilled workers, who have to travel to their workplace. Dim economic prospects limit investments and curtail productivity increase. These issues have to be addressed in parallel with dealing with the crisis. Or better: Those measures to cope with the pandemic that also address these other questions should be given priority.
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