The title of an upcoming presentation I will deliver next week is “Adapting to Uncertainty.” It should be very clear by now that we live in extremely uncertain times. I maintain that the world has not been this uncertain since a series of twentieth century catalysts established our modern day. The reason lies in the similarities between our current times and that period decades ago. The world back then experienced uncertainty across multiple domains: science, technology, society, geopolitics, economics, and business. The breadth of change occurring across those domains made the period one of the most turbulent in human history. The uncertainty of our current world did not just emerge, it has been years in the making. As it did in that earlier period, the convergence of multiple forces created the current environment. In studying those forces, our ability to adapt became a central tenet of my thinking, alongside seeing the future and continually rehearsing it.Continue reading
How Rising Inequality Distorts The Global Economy
I just finished a new book titled “Trade Wars are Class Wars”. The book has been added to my Book Library. Authors Matthew C. Klein and Michael Pettis explore how our economic linkages have both benefits, and an ability to transmit problems from one society to another. The thesis of this book is that rising inequality within countries heightens trade conflicts between them. A very insightful journey through history helps us to understand this phenomenon. One fascinating observation made by the book:
A global conflict between economic classes within countries is being misinterpreted as a series of conflicts between countries with competing interests. The danger is a repetition of the 1930s, when a breakdown of the international economic and financial order undermined democracy and encouraged virulent nationalism.
I have been amazed at the similarities to the 1930s as I explored in a recent post on a Post-Pandemic Society. Tariff wars were a part of the 1920s as they are today. Yet, as the authors indicate, tariffs and nationalist rhetoric will not resolve China’s imbalances, but they will likely reinforce the mistaken belief—on both sides—that China and the United States have incompatible economic interests. Rising inequality is another challenge faced back in the 1920s. The book explores how this distorts the global economy. It also opens the door to societal unrest – something that becomes more evident by the day. I highly recommend the book.