The Golden Age

In most societies, there is a myth of a ‘golden age’, a time when men and women lived simply and happily, free from the cares and troubles that afflict them today. This myth usually includes an account of how, through foolishness or malice, the golden age was lost. In Western versions, the blame has been placed upon women – Pandora opening the box and Eve taking the apple.

In the economic history of the developed world, there is one historical episode which might reasonably be regarded as a golden age. Between 1945 and 1973, developed countries in Western Europe, North America and Oceania experienced strong economic growth, combined with minimal levels of unemployment and a sharp decline in inequality. In policy terms. the dominant features of this period were the use of Keynesian macroeconomics to stabilize the economy and the development of a fairly comprehensive welfare state, protecting citizens from falling into poverty due to old age, incapacity or unemployment.

Those are the opening paragraphs for Chapter 2 of The Economic Consequences of the Pandemic. Comments and criticism much appreciated.

I adapted some of it, with more of a focus on Australia, for this article in Inside Story, also published in the Canberra Times

3 thoughts on “The Golden Age

  1. There’s a typo – I assume you meant minimal levels of UNemployment. I would also clarify that it was a golden age in economic terms (and you could add mostly low inflation and low uncertainty to your list) but not in some other aspects, such as disrimination against gays, women, ethnic minorities etc.

    It certainly contrasts to most of human pre-history and history when economic growth was so minimal, most people would not have noticed any difference in average living standards over their lifetime (see work by Angus Maddison and his team).

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