Here’s a provocative article from The Browser, in PDF form, in which elite analyst Thierry Malleret discerns several basic trends indicating that will make this century a turbulent and unusually unpredictable one for the world. The whole thing is worth reading — it’s definitely Karthbait — but here are a couple of highlights:
We are entering an era of permanent disequilibrium. Our global village is likely to be out of kilter for a long while to come. It will be lurching from one major crisis to the next. My starting point is as follows: With the world becoming ever more susceptible to shocks, the global risk landscape is now dominated by sharp discontinuities. Our world is changing everywhere, radically, very fast and in multiple intersecting ways that lend themselves to constant surprises. There is now no place to hide from the turbulence, the challenges and the uncertainties.
Ageing is indeed the crux of the demographic issue, and bound to be a big problem because it leads to a reduced working-age population just as the percentage of dependent elders explodes. As the population ages, it goes from stimulating the economy to depressing it, because fewer young adults equals fewer people purchasing new homes, new furniture, new cars and the like. Rates of savings and investment also tend to decline. Unless we change our existing social models (by retiring at a much later age, by favouring more female participation, etc.) and our culture (by combining old age and entrepreneurship), an ageing world is destined to be a poorer world. …
When thinking not about tomorrow but the day after tomorrow, the implications are obvious and dramatic. Before jumping on the bandwagon of Asia’s rise, for example, it is important to remember that its demographic outlook is even worse than Europe’s. Asia will face the arrival of an age wave without pensions, without health care and without a family to support the elderly. That is a recipe for major social turmoil.
Summing up these three in 18 OECD countries, the world’s most advanced economies, the ratio of debt to GDP has risen relentlessly from 167% in 1980 to 314% in 2010: an average of more than 5 percentage points of GDP per year over the last three decades.
This trend has now become unsustainable and must be reversed in the most adverse possible circumstances: the debt challenge is compounded by the other global megatrends, particularly ageing, which drives government expenditure up and revenues down, directly worsening the debt situation.
In the three most advanced economies – the US, Europe and Japan – resolving the issue of over-indebtedness through public and private deleveraging will take many years of painful structural reforms that will ultimately entail a complete redeﬁnition of the social contract.
Read the whole thing. We have accepted social norms that are more suited to wealthy societies. That’s going to change. I’m most curious to know what “a complete redefinition of the social contract” might mean. The thread throughout Malleret’s analysis is that all this change will happen at greatly increasing velocity, because that is characteristic of our era. It is literally a “quickening.”