Fear and crisis fatigue are holding back productivity
Our uncertain world is generating collective caution. This leaves economies experiencing too little change and bearing too little risk. Well-intentioned safety-ism is making the world less safe.
The Great Crash of 1929 left lasting scars on investors’ balance sheets and risk appetites. These scars, financial and psychological, gave rise to what John Maynard Keynes called the “paradox of thrift” – the paradox being that an individually virtuous act (greater saving) was collectively calamitous (economic slump). In the 1930s, this paradox ushered in the Great Depression.
Almost a century on, those same behaviours are in play today. Risk-aversion is rife among workers, businesses and governments. Security is trumping opportunity.
