The Present is the Future of the Past

An irony of studying history is that we often know exactly how a story ends, but have no idea where it began.

Here’s an example. What caused the financial crisis?

Well, you have to understand the mortgage market.

What shaped the mortgage market? Well, you have to understand the 30-year decline in interest rates that preceded it.

What caused falling interest rates? Well, you have to understand the inflation of the 1970s.

What caused that inflation? Well, you have to understand the monetary system of the 1970s and the hangover effects from the Vietnam War.

What caused the Vietnam War? Well, you have to understand the West’s fear of communism after World War II …

And so on endlessly.

Every current event – big or small – has parents, grandparents, great grandparents, siblings, and cousins. Ignoring that family tree can muddy your understanding of events, giving a false impression of why things happened, how long they might last, and under what circumstances they might happen again. Viewing events in isolation, without an appreciation for their long roots, helps explain everything from why forecasting is hard to why politics is nasty.

Those roots can snake back infinitely. But The ultimate of those great-grandmother events was World War II.

It’s hard to overstate how much the world reset from 1939 to 1945, and how deeply the changes the war left behind went on to define virtually everything that’s happened since.

Right from the existence of Penicillin to radar, jets, nuclear energy, rockets, and helicopters. Subsidized consumption with consumer credit and tax-deductible interest contruction of highways to evacuate cities and mobilize the military in case of a nuclear bomb attack during the Cold War, to the internet, to theCivil Rights movement , to the growth in thefemale labor force by 6.5 million during the war because women were needed in factories. It’s probably the single most important economic event of our lifetime.

Find something that’s important to you in 2019 – social, political, economic, whatever – and with a little effort you can trace the roots of its importance back to World War II. There are so few exceptions to this rule it’s astounding.

Which raises the question: What else is like World War II?

What are the other Big Things – the great-grandparents – of important topics today that we need to study if we want to understand what’s happening in the world?

Nothing is as influential as World War II has been. But there are a few other Big Things worth paying attention to, because they’re the root influencer of so many other topics.

The three big ones that stick out are demographics, inequality, and access to information.

Each of these Big Things will have a profound impact on the coming decades because they’re both transformational and ubiquitous. They impact nearly everyone, albeit in different ways. No one in 1945 knew exactly how World War II would go on to shape the world, only that it would in extreme ways. But we can guess some of the likeliest changes.

A demographic shift that reconfigures modern economies.

Here’s what’s happening:

Source: Census Bureau

In 1960 there were three times as many Americans age 0-4 as age 70-74. By 2060 those groups are about even.

The share of young workers is declining.

The share of older workers is rising.

The share of retired people – or those in retirement age – is surging.

There have been about 100 billion humans born during the 200,000 years we’ve existed.

For practically all of that time, making more people wasn’t an issue. Keeping them alive is another story. But having lots of babies has been a fundamental part of humanity for tens of thousands of years. This is more than biological; there’s a strong cultural element to reproducing.

The baby boom of the 1940s and 1950s was an aberration, and the economic boom that ensued led to a predictable trend: there is a long histo

Facebook Tweet LinkedIn

Comments are closed.