Amidst the gloom cast by the ravages of the on-going pandemic it would appear almost sacrilegious to talk of life after the worst is over. But some Christmas cheer can be drawn from what happened in parts of the world in the years following the Spanish Flu which left thousands of people dead and shuttered businesses across countries.
Yet, dire predictions of a severe economic downturn were belied and a period of economic hardship eventually gave way to a decade of exuberance.
Some of the factors behind this were not too dissimilar to what’s happening today as people then, and now, cut down on extravagant spending giving a filip to domestic savings. In India too, household savings are estimated to have risen during the current pandemic as consumption levels took a beating.
In 1920, after the flu had taken its horrific toll and herd immunity had restored normalcy to peoples’ lives, it was those savings that emerged to fuel a consumption boom. The Federal Reserve, like many of the central banks today, did its bit by pumping cash into the economy to stimulate demand. Of course, the inflationary pressure this created followed by a steep interest rate hike eventually led to the economic correction of 1920-21.
But what followed was a period of high spirits and a celebration of life which came to be termed the Roaring Twenties in the US. The country's economy motored along between 1921 and 1929 as gross domestic product rose 40 percent.
Looking back what stands out is how the rapid electrification of homes and commercial establishments in that period changed the lives of people forever. In some ways it bears resemblance to the move towards accelerated digitalization of businesses and online digital services for homes which is altering forever the way many sectors have been structured for decades.
Indeed, the new order of business that the 1920s signalled, lasted another hundred years. That era was marked by conspicuous consumption as marketers went about selling dreams made up largely of buying things. Industries like automobiles, beauty products and appliances witnessed an unprecedented boom. In turn this had a direct bearing on the interiors and exteriors of stores.
All this was fuelled by the emerging credit culture pushed along by businessmen who didn’t want consumer spending to be limited by cash availability.
The rabid consumerism had its counterpoint in wild expressions of hedonism in society. Life for some was one big party the excesses of which found their finest expression in Scott Fitzgerald's novel Great Gatsby published in 1925. The Jazz Age, as this period is dubbed, was a cultural phenomenon but its implications were far more dramatic and eventually spread to other parts of the world.
The cultural and artistic ferment was more pronounced in Paris which was going through its own Années Folles (crazy times). The cafes in Montparnasse and Montmartre hummed with the buzz of artists like Pablo Picasso and Henri Matisse as well as writers like Ernest Hemingway and Fitzgerald, who Gertrude Stein, called The Lost Generation, searching for new meanings after the horrors of the First World War as well as the flu. Eventually, these wild excesses did in some ways lead up to the Great Depression of the 1930s.
All this of course is ancient history now, relevant only for holding out pointers on what we can expect post the pandemic. A recently released report by Goldman Sachs is tantalisingly titled “2021 US Equity Outlook: Roaring ‘20s Redux”. Whether or not the markets sing along, there’s no doubt of a surge of confidence and optimism that will come from the successful completion of the vaccination process that has already started.
The spritzy impulse towards openness, freedom and self-will has never let any age down and it is the pleasure centres of the brain that have ultimately led the trajectory of civilization. Prepare then for a new Annees Folle or a Golden Zwanziger with India not likely to miss out on the party this time. Demographics, after all, is destiny and India’s younger minds, of which there are plenty, are bound to skedaddle towards a rocking time.
So let’s look forward to the celebrations, if nothing else in the name of carpe diem. Who knows, the next pandemic could be grinning behind the door.
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