Beware of the Zombie economy

The Zombies are all around us, and it is imperative that we shoot them if our economy is going to grow and thrive!

No, I’ve not lost my sanity.  In economic terms Zombies are businesses, people and indeed governments that are so badly in debt they will never be able to break free of it. Whilst they survive on a sort of life support where they are given enough money to avoid bankruptcy, they will never break free and grow.

To explain this further I need to get a little bit political, bear with me!  My view of 20th century political/economic history in a nutshell is the following. Back in 1900 Europe and North America had a form of red in tooth and claw capitalism, however the resulting huge wealth and dreadful poverty became unacceptable to many, and some countries moved to a liberal mixed economy while others moved to an extreme socialist/communist model. By the late 20th Century the socialist/communist model had failed. Today we are left with a liberal mixed economy – a capitalist system with high government spending to bring a semblance of fairness. The majority of political debate is then about exactly where to draw the line with regard to this, for example France has a smaller capitalist sector compared to the much larger one in the USA.

But the point is, we have a CAPITALIST system. Businesses generally find it very difficult to materially change; most radical change comes about by old businesses being destroyed and new businesses taking their place.  For example Amazon, Facebook, and Apple replacing declining newspapers, the yellow pages and high street book shops. Woolworths is a great example, it had been declining for years and finally closed its doors a year or so ago. There was a great deal of publicity about staff losing their jobs and for a while there were gaps in the high street – but look at it now, the Woolworths sites are taken, employing people with new and expanding businesses that people want to use. Surely a perfect example of a poor, underperforming business being replaced with more efficient and growing businesses, providing better services and growing employment.

So, for capitalism to work to properly to deliver growth old dying businesses must be replaced by dynamic new ones…in summary, the Zombies must go!

 

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