On the surface, the Scottish port of Dundee might seem an unlikely place for one of the most important discoveries in electromagnetism. Yet it was a Dundee-born scholar, Sir James Alfred Ewing, who first coined the word ‘hysteresis’. Ewing used the term to refer to electromagnetic effects that remain after the removal of a former magnetising force.
A key implication of hysteresis is that the application of a large shock may not mean an eventual return to the previous state. In everyday terms, think about an elastic band, for example. On normal stretching, it returns to its previous state; stretch it far enough and it snaps, and there is no way back.
Many years ago, a small group of us at St. Andrews University argued that the shocks associated with the peaks of actual unemployment are themselves part of the process that determines steady-state unemployment, in contrast to the then-prevailing paradigm of a timeless ‘natural’ rate. In crude terms, put a cohort of workers out of work for long enough and it becomes impossible to re-employ them.
That raises long-term unemployment. The idea was particularly relevant in the era of Margaret Thatcher when a policy-induced high real value of sterling was making whole swathes of the UK’s manufacturing industry uncompetitive. Industries disappeared forever and long-term unemployment grew.
What hysteresis suggests is that corporates and families should both be doing everything possible to keep our workforces and children mentally engaged.