How We Tamed The Great Depression
When I was born, in 1931, the “Great Depression” gripped the world.Where we lived, in the Catlins sawmilling district of South Otago, not one home had electric light. Tap water trickled from a corrugated-iron tank. We bathed once a week in an out-house copper tub. Our sole outside long-drop toilet teetered over a sawmill creek. We had no movies, no television, no night clubs. My family never owned a car. But the village of Tahakopa—at the end of the now-defunct Catlins railway line—did have a small free library, tucked into tiny church hall next to the blacksmith’s shop.
When I was born, in 1931, the “Great Depression” gripped the world.
Where we lived, in the Catlins sawmilling district of South Otago, not one home had electric light. Tap water trickled from a corrugated-iron tank. We bathed once a week in an out-house copper tub. Our sole outside long-drop toilet teetered over a sawmill creek. We had no movies, no television, no night clubs. My family never owned a car. But the village of Tahakopa—at the end of the now-defunct Catlins railway line—did have a small free library, tucked into tiny church hall next to the blacksmith’s shop.
In an isolated nation of 1.5 million people, almost 80,000 men were soon to be unemployed. Exports dropped by 40 per cent. A conservative government seemed powerless to act.
The United States was even worse off. At the height of the depression, one worker in four was unemployed. Not until the outbreak of the 1939-45 world war did it fall below 20 per cent.
Yet by 1938 New Zealanders out of work had dropped to 14,000. By the start of the war: to almost zero Unemployment did not exist here for the next 30 years. Even by 1978 fewer than 1 per cent were out of work.
For much of those intervening years New Zealanders enjoyed one of the three or four highest living standards in the world. Our annual productivity increases were consistently in the top three. We might have tolerated the world’s worst liquor licensing laws and most boring restaurants. But we did so many things right: the only county to turn a one-crop economy—in our case, grasslands farming—into a global success story.
Our lumber pioneers created the world’s biggest man-made forest, planted on barren pumice land. That set the base for the booming pulp and paper industry, whose productivity increase topped the world in the 1950s. Our farm-scientists pioneered new breeds of sheep, to produce great meat and wool. New farm milking sheds and bulk tanker collection of milk from farm to co-operative processing companies doubled the productivity of our dairy farms. The world’s first automated milkpowder processing stoked the explosion of other dairy exports. Scientists at Ruakura and Massey research institutes poured out innovations. Aerial top-dressing—spreading fertiliser from New Zealand-made planes—turned mountainous tussock country into giant productive sheep farms. We became world leaders in the production of clean, cheap hydro-electric power, as dams were first built along the Waikato River and later in the South Island.
And behind it all, from the mid-1930s, when the recovery began, lay the combined massive state house-building—from all-New Zealand materials—and highwayconstruction programs. State housing alone sparked the growth of protected manufacturing industries— from Fisher and Paykel’s whiteware to the all-wool tufted carpet.
The late thirties, forties, fifties and sixties were magic years of hope and modest confidence. Along with Sweden, Norway and Denmark, New Zealand successfully led the world out of the great depression—what others achieved by wartime mobilisation. We even seemed to take it for granted that our All Blacks were generally the best—and that, in one blistering era in the sixties, four athletes living within a mile of coach Arthur Lydiard’s home in Mt Albert could own either every world middle-distance running record or their Olympic gold medals.
Now—as the world cowers from the second biggest financial collapse in history— amazingly all the things that 1930s utopians dreamed about are now possible. But can we do it again—and in the same way?
The answer, I suggest, is two-fold: yes we can—with the same spirit of innovation and early adoption (as we were among the first to fully adopt refrigerated shipping and containerisation). But: no—we cannot do it in the same way, in a world that is dramatically different.
Seven new catalysts are now converging to change virtually everything: just as the disrupting technologies of the printing press, steam power, electricity, the massproduced automobile, television and the silicon chip have transformed previous eras.
Those seven keys to unlock the future are simple but revolutionary. And they give small societies, like New Zealand, Finland, Sweden, Denmark and Singapore, as much opportunity to prosper as the innovative ecology of Silicon Valley:
KEY 1: It’s global. Virtually everyone on earth now has the opportunity to plug into a digital global market. Tiny Singapore, with the same population as New Zealand but crowded into an area the size of Lake Taupo, and with few natural resources, has attracted over 3000 international companies to set up there.
KEY 2: It’s personal. Even nine years ago, half the people on earth had never placed a phonecall. Only 12 per cent owned mobile phones. Now almost 3.5 billion have them. By the end of 2009: 4 billion. In Finland, the former Nokia gumboot and lumber company is the world’s biggest producer of the new mobile phone-cameramultimedia “computer in your pocket”. Better still, everyone has a talent to succeed at something—and now has the chance to sell that talent to niche markets around the world.
KEY 3: It’s interactive. Only a few years ago I was battling with New Zealand’s sole state television channel for the right to run a second one. Now well over 100 million people, in many countries, create their own multi-channel global TV network every day: on YouTube—a concept that did not exist five years ago. Now, in a typical month, YouTube notches up 5.6 billion separate “video-views”.
KEY 4: It’s instant. Eleven years ago, Google didn’t exist. Now it can scan billions of websites in half a second and provide instant answers to 300 million inquiries a day, and instant access to maps and email. For around $1 to $2 a year, Atomic Learning can provide each student in any school with access to 30,000 video tutorials, on all the world’s most important computer software.
KEY 5: It’s often free or almost free. Over 300 million subscribers now make free international phone calls every day, and view each other as they speak through Skype on each other’s computer screens. Google provides all its information free—but sells its associated sponsored messages, often as low as 5 cents a click.
China has slashed laptop computer prices by up to 90 per cent selling them without an operating system and letting buyers download a free “open source” system from the Web.
KEY 6: It’s easily shared. Wikipedia is now by far the world’s biggest encyclopedia, with well over 10 million articles in English alone, compared with Britannica’s 80,000. Yet all Wikipedia articles are contributed by passionate specialists on their own subject—and extended by others, free.
KEY 7: It’s co-creative. If we can dream it, we can do it—together with millions around the world. And this is probably the most important of all, especially in a small country where co-operative enterprise and “No. 8 fencing wire” innovation has always been a treasured trait. Wikipedia, Google, YouTube, MySpace, Flickr, Facebook and other online co-creative social communities are only the beginning.
Each has created an interactive global platform to unleash the talents of millions. And each is based on all seven catalysts for change.
Now that’s a real challenge. Even greater than the thirties!
Gordon Dryden http://www.thelearningweb.net/
Gordon Dryden is the Auckland-based co-author of UNLIMITED, the new learning revolution and the seven keys to unlock it
Gordon Dryden is a New Zealand author, researcher, publisher and broadcaster who has spent many of the last 30 years searching out new methods of learning. During the last seven years he has produced 22 television programs on the same subject and is the author of The Learning Revolution, a book he co-wrote with Dr Jeanette Vos which sold 9 million copies in 10 months in China and made it the all time fastest seller, ever, anywhere.
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Filed under Business Growth and posted on 07 March 2010
