Meteors, what doesn't kill you only makes you stronger

As the recession continues to bite the effects are still being felt in all corners of the world, especially in Britain. Unfortunately, we are the only G20 country still in recession. We were first in and last out. It should be expected really as queuing is practically an Olympic sport for us Brits.

We therefore thought that it might be time to look on the bright side of life, and consider the benefits that recessions bring. Yes, believe it or not recessions are a necessary evil in the economic cycle, and good does come of them. Eventually.

It is said that capitalism is based on nature, with a survival of the fittest ethos. In fact Mother Nature makes Margaret Thatcher look like a bleeding heart  liberal.

As Darwin identified, nature works on a very simple basis. It tries many different experiments and keeps the ones that benefit survival, discarding any that don’t. Nature also recognises that its main aim is the survival of life itself, and it is brutal in its nonchalance about the survival of individual species, let alone single beings.

At times throughout history the tree of life has branched off into a cul de sac. The dinosaurs are a good example. They evolved up to a point and enjoyed a period of total dominance, and then in evolutionary terms did absolutely nothing for 80 million years. No fire, wheels or tools. Not even a Skoda.

Eventually nature decided that enough was enough and the accepted theory is that a large meteor landed in Mexico causing global devastation and the extinction of the dinosaurs. Some small mammals however did survive and went on to evolve into bigger mammals and ultimately the human race.

The point being, is that the slate needed to be cleansed in order for new and improved species to evolve and continue the evolutionary path. Given that our capitalist society is modelled on Mother Nature, then recessions are also a necessary evil. In good economic times some poor companies and organisations may prosper, when they may otherwise have not.

They survive with poor products, broken business models and shoddy service because in the good times we stop asking about quality and focus only on quantity. Even the banks stop asking the right questions and pump in more money to meet their short term sales targets.

When a downturn strikes, these companies are often the first to be killed off. If you consider that two of the most infamous early casualties of the recession were Woolworths and MFI. Both of these companies had business models that in less opulent times would have been ‘found out’ long before they actually were.

Woolworths were famous for pick n mix sweets which nobody ate anymore and for selling music which had moved to something called the Internet.

MFI had their heyday in the eighties and the profits saw them through the nineties before they became a comedic caricature of themselves. If you follow the company’s financial history they were dying a slow but certain death for the preceding ten years. If they had been an animal, the RSPCA would have stepped in long before the recession finally put them out of their misery.

The next batch of companies to struggle are those who had a good product or service in the past but who have rested on their laurels for many a year, finding it too easy to make money without really trying. Some will see the light and reinvent themselves; others will go the way of diplodocus.

And then there are those that will once more rise to prominence as consumers gravitate to quality. It is no coincidence that John Lewis and Marks & Spencer’s this week posted strong results during the worst economic year for decades.

So whilst we suffer the recession we must also remember that some good will come of it in the end. After all without that meteor you would still be grubbing around in a little hole trying not to get eaten by a velociraptor.

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