On a crisis, the main concerns of a government will be guaranteeing all goods to people— which might turn out to be difficult without increasing national debt and keeping unemployment low — otherwise people’s morale will go down, immigration will increase and poverty will be inevitable. And finally, the government fights to keep it’s own hegemony over the country. It’s hard on a free market region to keep ownership of property an infrastructure if one does not have the capital to do so.

Unemployed after the crash of 1929

In economics there’s the famous law of supply and demand — when a crisis happens this law can be applies to it’s labour situation. High unemployment rates will naturally create a big demand for employment, so employment will become “more expensive”. This meaning that a worker will work more and get less. What should be then the policy applied in order to fight this economic adversity?

So, in order to avoid all this set of problems, the primary solution, and commonly taken, is keeping the minimums .i.e low wages employment, heavy state infrastructures and an outstanding long term credit debt.This way the state tries to keep everyone satisfied, employed and with a minimum of social care. Which works, but not on the long run. It’s just delaying the problem for later, transforming with time a small snow ball into a big heavy avalanche. I will try to explain how these solution do not work.

Low Paid Jobs:

Advantages

Having a low paid job is better than not having a job at all. In the end of the day, a person wants to have that feeling of “mission accomplished”. A problem fixed, a solution found — no matter how small it is. It’s almost a spiritual need to work for a community and feel like “a man of his trade”. Also, countries with low wages attract companies to fix their operations/training center’s (specially if the population is educated and technically qualified). This will bring knowledge, sense of belonging (in the world economic paradigm) and prestige to the country. And maybe, in the long run

Disadvantages

Companies will have a big internal wage disparity. Being the newcomers every day more qualified and technically more pro efficient than their senior counterparts, they rapidly bring more value to the company. This poses as a threat to the senior class that has two ways to deal with it: overload the newcomers with work and pressure or consistently boycott their work with bureaucracies in order to hide their own technical vulnerabilities. This doesn’t mean there are no good senior supervisors that invest, motivated and give space to their junior teams to grow. People will always be rotating due to to lack of progression, and so the knowledge is not consolidated. People get knowledge and then leave the country in order to truly produce something meaningful. Competitor countries will have a big advantages of not having cost of education, no cost of teaching a entry level employees and will have very low cost by not having to pay high average cost to their entry level employees.

Heavy State Infrastructures:

Another main concern is to keep public services, so that people have access to essential services, such as transportation, health, education. I start with these structures since they are the most expensive owns to operate. When a state is bankrupted, these will be poor people last resort. If one does not have money, once uses public transportation, state education and state health system.

Credit Debt:

In order to keep goods flowing into the country if a country is economic crisis, it will have to increase it’s national debt. With time, if this debts is not balanced, the costs of the debt will become more and more severe until the country has to lent money to help paying its debts — this is the most unsustainable situation and eventually will lead to bankruptcy. The only way out is to use the loan to produce richness instead of delaying the problem.

The main problem here has to do with national consensus and a coherent politic of promoting long term investments instead of local temporary solutions. In the end, a country has to produce value in order to come stable. This value is either physical or intelectual and has to be retained with a certain border limit (otherwise we are talking about mankind in general)

So what to do in order to break this cycle of unequal growth?

Either we could take a leftist approach based on international equality and global cooperation in order to coop with disparity (which is a very valid approach, specially in an consistently more self-conscious world) or we could develop a national/regional objective that would result in a generational consensus. I.e in order for true progress to happen, there has to be a true consensus between the old and new generation — a trust in each role and a clear top organisation that promotes the progression of all.

This consensus has to be applied within a national scope and as a whole, so that there is a joint will to overcome the core problem of national growth by smoothing work processes.

Using common words this would mean to leave space to young people develop their skills and directly apply it in society, and have the humility to learn and directly integrate young generations in certain fields. Of course that at the same time youngsters would have to value old people as a source of knowledge and reservoir of experience that has a more solid view of the any panorama, and are more inclined to consistency and sacrifice. This consensus has to be applied within a national scope and as a whole, so that there is a joint will to overcome the core problem of national growth by smoothing work processes.

As an example of that one has the Netherlands that has a very young class of doers within its corporate world. While the eldest class educated itself to be able to coop and give input within the core work of the young minds. This is a process of release of the age pride and not fearing loss of position in prole of a greater overall income.

This national consensus can then be applied in parallel to other type of consensus. Again, in the Netherlands the “Polder Model” was a national strategy and attitude that tried to connect different parties with a reasonable and transparency policy that would require everyone in benefit of national growth.

The Dutch polder model is traditionally characterised by an active and constructive dialogue between trade unions and employers’ organisations.

The Polder is the land behind the dike, which was conquered to the sea. Since the Midle Ages, these lands required a lot of social cooperation in order to keep the soil balanced and the water front controlled. The idea of a common enemy (the wild sea) built a sense of trust and unity among people. Later on, this concept was behind the so called “Polder Model” which intended to fight the consequences of the oil crises that armed the country’s economy.

Polder is the land conquered to the sea with the help of dikes

Conclusion

The main point of this text culminates on the ideas of Leadership and Trust. All solution require sacrifice, but without trust only unfair blind measures can be taken so that the unjust wont take over the just.

With a strong Leadership and good communication one can fight a crisis with different mindset where everyone can negotiate their sacrifice and truly feel part of a transparent policy.