Technology vs. the economic crisis
OfflineThis is something I continue to be genuinely interested in. The credit fiasco that happened in USA and infected the rest of the world, bringing down some of the most powerful and oldest banks in US and some big banks in Europe too, regardless and perhaps even partly because of the just passed bail out in US and other bail outs in Europe, is according to many leading the world towards a global deep recession which some compare even to the Great Depression that started in 1929.
The difference, as I understand it, is that the last great depression was caused by deflation (contraction of money supply and sudden increase of value of the dollar) while the current depression is likely to be inflationary, that is, cased by inflation. The latter is worse because it decreases the value of the dollar while the market is contracting and also carries a threat of hyperinflation (AKA the collapse of the currency), which wouldn't be good for the world since USD is the most popular world reserve currency.
Another difference, however, is technology. From the perspective of 1929 we are living in a science fiction world. Most notably we have the internet and a green technology boom which among other things allows more and more people to generate electricity independent of the grid, by the power of sun or even wind. High tech industry is also very large, very dynamic and innovative as well, especially computer industry and the internet.
Could this make a significant difference? Or dare I ask, is it possible that technology will save us from making this economic crisis as bad as it was in 1929? For instance, businesses and individuals with some savings could invest in independent energy (solar panels) so as to cut their energy costs, be able to produce more on their own for less, thus being less affected by the crisis. Internet also makes people more informed about what's going on so they can prepare and adjust before the real crisis hits their part of the world, not to mention share methods of survival and prospering even in the middle of the crisis.
What do you think?
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Somewhat related, here is what Nat Torkington from O'Reilly Radar had to say about the effect of the depression on technology, Free Software and Open Source in particular.
I think some of his points further underscore the big difference that technology makes today against the economic turmoils. Something one of the commenters, Scott, said there is interesting: "Those in the technology industry will have the unique ability to provide the levers to keep productivity up while things are going bump around us."
Indeed, technology in fact wouldn't exist without innovation. It is all about innovation. All technology we have was a result of someone inventing a better way of doing something, a better tool. In a crisis the need for innovation is as high as ever and with the kinds of abilities we today have, so long as there is electricity and internet connection the opportunity for innovation is huge, perhaps even despite the collapse of the financial system.
Still welcoming any thoughts others might have. Don't be shy.
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