This week the team of crack researchers and analysts at the sprawling Mead GHQ are presenting our analysis of the Top Ten Trends that will affect world politics in the decade ahead. This won’t be about individual countries, but about the big trends that will shape global politics. We kicked the series off yesterday with a look at the übertrend of the decade: the acceleration of the rate of technological and social change that is steadily outstripping the ability of national and international institutions to adjust. All ten of the major trends we’ve identified flow in some way from the accelerating speed of world history; during the 2010’s more and more observers will identify the mismatch between the pace of technological, social and economic change on the one hand with our ability to respond as one of the world’s most serious problems.Meanwhile, starting today we are presenting a list of the top ten trends driving the world through the 2010s.
Global Trend # 1: Economic Upheaval
The emerging global economy is looking more old fashioned every day. Before the Great Depression of the 1930’s, the world economy swung from extraordinary boom to catastrophic bust with bewildering and baffling speed. After World War Two there was a period of (relative) calm; this began to unravel in the 1970’s and each decade since then has seen bigger booms and scarier busts. The great financial crisis of 2008-2009 was the latest in the series; it likely won’t be the biggest or the last. Some of the coming busts will be global, others will be regional or local, or affect certain types of countries (oil exporters, heavily indebted developing countries, agricultural exporters, etc.). One way or another, however, dealing with these crises, coping with their social as well as their political and economic aftermaths, and finding ways to work cooperatively on a global or regional basis to solve economic problems look set to be major preoccupations of policy makers and politicians through the teens.Managing the economy is going to pose much greater headaches in the decade ahead. The problem is that the economy keeps changing. The supercomputers of the last ten years transformed the way global financial markets worked; the new computing power made increasingly sophisticated and complex trading strategies possible and facilitated the explosive growth of huge markets in exotic financial products. The proliferation of new markets and new financial instruments created new risks and, especially, new potential for systemic risks as these new, super-complex instruments and markets created new forms of dependency and interconnection that neither market participants or regulators could understand.This isn’t going away. If anything, the underlying trend toward more powerful and less expensive computers is picking up steam. Given the vast amounts of money at stake, financial firms and institutional investors will continue to support the development of new software and new products and strategies that can harness the explosively growing information processing power moving into the financial markets. Mathematicians using these ever-more powerful computers will continue to develop models that can be used in investing; it is likely that the speed at which new and more powerful mathematical tools are developed will increase significantly during the coming decade, accentuating the tendency toward volatile financial markets.Meanwhile, even as financial markets become more complex and harder to understand, the real world economy has moved onto new and untested ground. The US national and external debt are likely to cause more trouble in the coming decade than in the last; the competition among the growing band of export-oriented manufacturing countries could disrupt world trading patterns and will increase pressure for protectionist policies in some quarters. The intersection of environmental concerns and the rapidly growing dependence on imported energy in key markets is likely to make the interface between the politics of energy and the global economy volatile. For reasons that will become increasingly clear as we look at the political trends likely to shape the decade, policy makers in the world’s major economic centers will all face tough constraints as they try to coordinate economic policy.This all sounds grim, and there will likely be times when the economy looks and feels pretty grim, but we should not forget that the acceleration of technological progress is, on the whole, a good thing — and especially for the economy. Better technology means more products and cheaper ones. There has been a lot of social and political upheaval since the Industrial Revolution, but the world economy is a lot bigger than it used to be, and billions of people are better fed, better housed, better educated and better cared for than at any other time in world history.The trick in the next ten years will be to reap the benefits that rapid technological progress puts in reach while keeping an accelerating world economy from tipping over in the strong winds ahead. We will have to do that even though the economic profession is likely to be at war with itself as economists debate the meaning of the recent financial crisis and try to develop new theories and models to fit changing world circumstances. Economics is, unfortunately, more of a backwards looking science than its practitioners sometimes like to admit (even to themselves). Just as generals are always fighting the last war, economists are always preventing the last crash. Globalization and technological change actually change the way economies work and can change the consequences of economic policies in ways that can be hard to predict. Economists, like the rest of us, are going to be flying blind during the turbulent teens just ahead.Enjoy!
Global Trend #2: Proliferation High and Low
Proliferation is not just a question of a few rogue states and terror organizations. It’s the natural and largely inevitable consequence of the technological change sweeping the world. Nukes are a lot easier and cheaper to build than they used to be and second rate scientists in third rate countries are increasingly able to do things that it used to take Nobel Prize winners equipped with unlimited budgets and the best labs in the world to pull off.It’s not just nukes that will be getting more prevalent. Technological progress basically makes it easier and cheaper to kill larger quantities of people. Ratty bands of pirates and child soldiers in the hardscrabble boondocks can now get their hands on what, not very long ago, were the most advanced infantry weapons in the world. This will continue; what the top armies have today, the down market militaries will get as time goes by and ultimately much of the high tech combat gear the Americans are using in Afghanistan and Iraq will be available to the kind of thugs spreading ruin and misery in the eastern Congo. (more…)