I think most of us could agree that the economy is in transition. As they remind us over at the Wonk Blog this is certainly not the first transition. If you have been watching Downton Abbey you are aware that in post World War One the English economy was undergoing a major transition. The old estates had been mismanaged for centuries and Downton Abbey was no exception. Lord Grantham may have been a wonderful gentleman but a horrible investor and estate manager. In addition technology was advancing rapidly and many could not adapt. On the technology side:
Take the lowly mixer. It arrives in a modest brown box labeled “mixer-beater,” with its shiny metal body and a pair of mixing heads. Ivy and Daisy are fascinated.
Patmore “sees this as the kiss of death, the nail in the coffin,” as Lesley Nicol, the actress who plays her, says in the online special feature. The electric mixer will make it easier and faster to prepare food. And while bottom-rung scullery maids Ivy and Daisy adapt easily to the new gadget, as young people often do, Patmore can’t quite master it; she breaks a bowl while trying to use it, declaring that she “must have put those rotty prongs in wrong.”
The mixer is only the beginning. Patmore is slow to adapt to a new sewing machine and refrigerator, which she is told will help reduce costly waste. Lady Grantham asks the reluctant Patmore, “isn’t there any aspect of the present day you can accept without resistance?” And Patmore says of Lady Grantham, “nothing can stop her from dragging us into the new age.”
The last decade it has been automation and outsourcing that has displace many workers but in 1920s England it was a shift in the economy:
Mr. Carson, Downton’s senior butler, offers Mr. Molesley a job as footman, a position demanding fewer skills and offering less money.
Molesley was trained as a butler, and a butler was a skilled position in those days, requiring someone who knew how to manage the staff. When Matthew Crawley died, however, Molesley lost his position as a valet and couldn’t find another until the house’s senior butler, Mr. Carson, offered him a job as footman, a position demanding fewer skills and offering less money.
“I have come down in the world, Mr. Carson,” Molesley says. “I am a beggar and so, as the proverb tells us, I cannot be a chooser.”
“I see Molesley as the 1920s counterpart of the contemporary highly skilled worker in manufacturing — left behind by changed circumstances,” says Eric S. Maskin, a Nobel Prize-winning economist who teaches at Harvard University. Today’s Molesley might be a former printing press machinist now restocking shelves at Wal-Mart.
I for one can identify with this since my job as a manufacturing engineer was shipped to China when I was 56. I was fortunate in that I had money in the bank and my downsizing was to a severe as it was for many others.
But the biggest impact of the economic transition was the viability of the old estates like Downton Abbey themselves. As I pointed out above the estates had been mismanaged. In addition there was the introduction of estate taxes:
Britain imposed inheritance taxes in 1894 at a modest 8 percent top rate, but during World War I, Britain’s public debt ballooned to 150 percent of GDP. So the Finance Act of 1919 raised the top rate to 40 percent on estates whose value exceeded 2 million pounds, according to the Tax Foundation.
“The inheritance tax issue creates a nice tension,” Maskin writes in an e-mail. “We fans naturally root for the family to hold on to the estate. But Lord Grantham’s economic judgment is terrible, and so getting the place out of his control (through taxes or otherwise) might be the best outcome — not only for progressives but for proponents of efficiency.”
Perhaps the lesson here is the “privileged” don’t remain privileged forever. Something the “privileged” attending the most recent DAVOS conference.
Times and the economy are always in a state of flux and how we adapt to the change determines the future.