History doesn’t repeat itself, but it rhymes, goes the old saying. Whether it’s repeating or rhyming though, there’s a familiar look about life in the early part of this decade when compared with 100 years ago. Like then, we are in the midst of a major global pandemic. While not as deadly as the Spanish Flu, it’s been at least as disruptive. Encouragingly, as the pandemic of 100 years ago and many others have shown, life does return to normal and we may even be able to look forward to the years ahead.
If this sounds like wishful thinking, there are some serious names out there who are buying into the concept. L’Oreal, the global cosmetics group, recently predicted a ‘Roaring 20s’ for its business once lockdowns are over and people are allowed to start going out again.
In a similar vein, social epidemiologist Nicholas Christakis, in his new book ‘Apollo’s Arrow: The Profound and Enduring Impact of the Coronavirus on the Way We Live’, expects to see mass rejoicing, an explosion of sexuality and a resurgence in the arts in the coming years.
Christakis says we have some way to go to achieving herd immunity against the SARS-CoV-2 virus, which will probably be achieved at some point next year if everything goes to plan. It will then, he argues, take some time to recover from the aftermath of the pandemic, namely for those who have lost their jobs, missed out on their studies and for those who have been physically affected by the disease.
From 2024 onwards, we should see the return of hedonism on a grand scale – bars, nightclubs, spectator sports and festivals should all benefit.
Cleaning up the post-pandemic mess could take another year, he argues, but from 2024 onwards, we should see the return of hedonism on a grand scale – bars, nightclubs, spectator sports and festivals should all benefit.
Music, art and other forms of creativity should all flourish, along with a new wave of entrepreneurship and technological innovation. The return of the jazz age, if you will, but with an electronic beat.
If Christakis’s vision seems overly optimistic, consider that many of the things he is predicting are already starting to play out. Stock markets around the world are hitting all-time highs, fueled by loose monetary policy and government stimulus measures. Businesses linked to a normal economy – from cruise companies to banks and energy companies – have all picked up of late.
Meanwhile those businesses and asset classes that are associated with innovation continue to be rewarded. Electric car manufacturer Tesla is up over 330% over 12 months at the time of writing, while digital currency bitcoin is up over 480%.
Innovation in other areas is likely to lead to improvements in our lives, just as they did in the 1920s. A hundred years ago, motor cars started to be manufactured on a mass scale, giving mobility to millions of people and allowing cities and suburbs to grow. Radio brought entertainment into people’s homes.
Other innovations that made people’s lives easier and which many of us take for granted today, first came out in the 1920s: the vacuum cleaner, the washing machine and food mixer, to name a few.
The work done in developing vaccines and treatments for Covid-19 will be applied to a range of other illnesses. Messenger RNA technologies will be applied to fighting cancer, for example.
Our lives are likely to be transformed in the coming years with new technologies to go along with the new blend of working from home and in the office. Artificial intelligence and the internet-of-things will hopefully bring a myriad of benefits to our lives. The work done in developing vaccines and treatments for Covid-19 will be applied to a range of other illnesses. Messenger RNA technologies will be applied to fighting cancer, for example.
What about the economy and markets? The 1920s were a great period to live in, if you were American. The US economy grew by 42% over the 1920s, while the Dow Jones Industrial Average had a compound annual growth rate of 23% between its lows in 1921 and its peak in 1929 (a little more on this later). The US accounted for about half of the world’s output in the 1920s, with Europe falling behind due the destruction of caused by the First World War.
Today, the US accounts for about 25% of the world economy, followed by China at 16% and several other countries between 2% and 5%. Some forecasts have China overtaking the US by the end of the decade. This doesn’t mean the US will become unimportant, but rather that the benefits of growth and innovation are likely to be felt by more people in different countries. New technologies will hopefully allow for less developed countries to leapfrog their way to become more advanced.
In the 1920s, only a handful of countries had stock markets. Today, most countries do, while it’s never been easier to invest abroad than it is today. This means that any wealth effect of rising global asset prices are likely to benefit a broader number of people.
“The 1920s were a period of growth and innovation, but were deflated by the Wall Street crash and the Great Depression. Will the 2020s be different?”
Lessons from the past – and the future
History may rhyme like a poem, but it’s rhymes should also give us insights into our world. It’s worth remembering therefore that it wasn’t all jazz, flappers and Great Gatsby in the 1920s. As noted above, there was turmoil in other parts of the world. The Soviet Union entrenched itself, while Germany, faced with a post-war reparations bill, saw hyperinflation during the Weimar Republic years.
Italy became a fascist dictatorship in the 1920s, while in South Africa, the Rand Revolt of 1922 led to the introduction of racial labour policies that were only properly reversed with the demise of apartheid many decades later.
Even in the US, the 1920s were a period of widening inequality. While the post-war years did lead to improvements in women’s rights (women were given the vote in the 1920s), inequality in incomes rose: in 1922, the top 1% of the population earned 13.4% of total income, and by 1929, this had risen to 14.5%.
We all know how the decade ended too, with the onset of the Great Depression, which eventually led to the Second World War.
Forecasting what might end the post-pandemic party is difficult, but we can certainly highlight some candidates:
Higher inflation and possible policy errors: Many economists are warning that the current fiscal and monetary policies could result in inflation in the coming years. If not managed properly by global central banks it could lead to either persistent higher inflation or a drastic tightening in policy to rein inflation in, possibly sinking the world into recession.
Increased geopolitical tensions: While the new US administration under President Joe Biden has promised a thaw in relations between the US and China. However, these could escalate in the coming years, especially over issues such as intellectual property rights or human rights. Much will depend on who will be the US president from 2025 onwards.
Populism and inequality: These were important themes over the last decade and, if not addressed in the coming years, could lead to the election of populist or extremist governments. Covid-19 has widened inequalities, with a digital divide between those able to adapt to remote work having an advantage over those who cannot.
Climate change: Traditionally, economic downturns have resulted in an increase in carbon emissions as countries have ramped up industrial production to get the economy going again. While this appears to be happening this time around, the good news is that governments and the private sector have increased their commitment to new forms of clean energy. 110 countries last year committed to carbon neutrality by 2050 (China by 2060), but even with this commitment, climate change will continue to have an impact in our lives, in the form of extreme weather such as droughts, floods and other natural disasters. This could affect the world’s poorer nations more than richer countries, feeding into discontent over inequality and geopolitical tensions.
There’s much to be excited over in the coming years, but governments, policymakers and other leaders will need to heed the lessons of the past – and the challenges of the present and future – to ensure a viable future beyond this decade.
‘Apollo’s Arrow: The Profound and Enduring Impact of the Coronavirus on the Way We Live’, book by Nicholas Christakis
‘Roaring 20s will follow Covid-19 pandemic, says L’Oréal’, The Guardian, 12 February 2021,
‘Will the 2020s Really Become the Next Roaring Twenties?’, Marker.Medium.co, 17 January 2021,
‘1920s Economy - What Made the Twenties Roar’, The Balance, April 2020,
‘The World Economy in One Chart: GDP by Country’, Howmuch.net
About the author
Patrick writes and edits content for Investec Wealth & Investment, and Corporate and Institutional Banking, including editing the Daily View, Monthly View and One Magazine - an online publication for Investec's Wealth clients. Patrick was a financial journalist for many years for publications such as Financial Mail, Finweek and Business Report. He holds a BA and a PDM (Bus.Admin.) both from Wits University.
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