This blog is released in conjunction with our Podcast #129 – Times of Turmoil.

Expressions like “paradigm shift” are banned from the Mind Your Own Business podcasts. They smack too much of Management-speak, which uses long-winded, modern-sounding but essentially meaningless words to sound important without being clear about what one is actually thinking.

If you ever hear muffled screams in the background of the podcasts, it is when Richards uses one of those expressions by accident and Kingston sends 10,000 volts through his chair “to teach him a lesson” – for his own good, of course...

Yet there may be a few occasions – very, very few – when “paradigm shift” may be allowable. Change is in the natural order of things, but there is a level of change that transcends normal change. Change can become qualitative as well as quantitative. The game changes in that there is not only a change in the flow of play but also a fundamental alteration in the rules of the game itself – so that it becomes, in effect, a different game altogether.

Applied to economics, change comes in two forms: cyclical and structural. Cyclical changes are the inevitable ups and downs of the economic cycle. Despite the boasts of the sillier type of politicians that they will “abolish boom and bust”, there seems to be no avoiding them. The natural inclination of human development is in the direction of progress and expansion, but to every action there is a reaction, so hiccups and setbacks are to be expected from time to time.

Some of these hiccups and setbacks can appear to be quite significant when they occur. They might panic ignorant people – like BBC commentators – into claiming that they are structural changes. This is where “paradigm shift” becomes overused, abused, and quickly discredited, for they are nothing of the sort. They are just part of the same old economic cycle.

Structural changes transcend that cycle. They can take the form of technological change, like the Industrial Revolution or the ongoing Internet Revolution. They could also take the form of natural disaster. Their most visible manifestation, however, is in the form of a fundamental shift in the balance of power among humans.

Such a change can take decades – like the slow decline of Western Europe since 1914 or the rise of China since the reforms of Chairman Deng – or they can be sudden and spectacular. As with cyclical events, there is a tendency to exaggerate, so that every unexpected event becomes a “paradigm shift”, but the real thing is very rare – possibly only once in a generation.

Perhaps the last true sudden “paradigm shift” was in 1973, when the OPEC Oil Embargo signalled a decisive change in the relations between the developed nations of the West and Arab states hitherto written off as “Third World”. Of course, the Fall of the Berlin Wall in 1989 was also a “paradigm shift”, but it could be argued that this was simply confirmation of a fact that had been obvious for decades, that capitalism was beating Marxism economically.

The 1973 Oil Crisis was spectacular in that the Arab states used muscles they did not know they had for the first time, and were surprised by their own strength. Western governments were caught completely unawares. Despite a quarter of a century of decolonisation, they still felt that the world belonged to them. The Embargo was a huge psychological blow. The economic consequences dominated the 1970s, but perhaps the greatest legacy was the impact on how the West viewed the rest of the world.

All of which brings us to the present day. Many saw the 2008 Crisis as a “paradigm shift”, but, as we pointed out calmly at the time, it was just part of the cycle. However, there may be a case for saying we are seeing the beginning of the genuine article in the Middle East.

It is too early to be certain. Whatever hysterical journalists might say, the odds always favour incumbents who are willing to fight and who retain the support of their armed forces. The current wave of protests may end in the reinforcement of the status quo, like the Tiananmen Square protests in China.

Yet once change begins, who knows where it will end. Will George W Bush’s seemingly naive call for a democratic Middle East prove to be prophetic? Or is the Al Qaeda dream of a united Islamic state from North Africa to Iran a more likely scenario? Will the one lead to the other? If so, which will come first?

One thing is certain: whatever happens will impact on out ever-more integrated global economy – and that means on all of us in business.