Globalization

Between 1798 and 1826 Thomas Malthus, in his series of essays on population, had stated that the human population grows in geometric proportion while the food production grows only in arithmetic proportion. Hence, he predicted that there will be a situation, in the 19th century, when the food supply will not be able to support the growth in population and it will inevitably lead to a population check by means of natural/man-made catastrophes.

A few weeks back, I was in Europe where I heard the speaker mention that the current crisis is an L-shaped crisis. Normally in a business “cycle,” there is a boom period (like we had till a few years back) which is almost inevitably followed by a slowdown (or a correction), but then the economy picks up again after a short time and in all probability, attains a higher level of production than the last boom. This is the way a capitalist society works. However, this time it is feared that the economy will not pick up again after the recession, meaning it will not be a normal U-shaped growth pattern but a severe L-shaped one –we can expect no growth or an insignificant growth rate in the coming decade or more. This is a scary picture!