The New Economy of Fealty
PRINCETON – Since the 2008 financial crisis, most industrial economies have avoided anything like the collapse that occurred during the Great Depression of the 1930’s. But, despite large-scale fiscal and monetary stimulus, they are not experiencing any dramatic economic rebound. Moreover, the pre-crisis trend of rising income and wealth inequality is continuing (in marked contrast to the post-Great Depression period, in which inequality declined). And survey data show a rapid decline in people’s satisfaction and confidence about the future.
The explanation of the post-crisis malaise – and people’s perception of it – lies in the combination of economic uncertainty and the emergence of radically new forms of social interaction. Long-term structural shifts are fundamentally changing the nature of work, and thus of the way that we think of economic exchange.
In the early twentieth century, a large share of even advanced economies’ populations was still employed in agriculture. That proportion subsequently fell sharply, and the same decline could later be seen in industrial employment. Since the late twentieth century, most employment growth has come in services, particularly personal services – a pattern that looks like a reversal of a previous historical trend.