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The Twelve Trends That Will Reshape the Global Economy

Friday, January 21, 2011

Economist Daniel Altman predicts which industries will grow, which economies will crumble, which investments will pay off, and where the next big crisis may occur. In Outrageous Fortunes: The Twelve Surprising Trends That Will Reshape the Global Economy, he looks at what the global economy will look like in the years to come, bringing together hidden trends, societal pressures, and policy endgames to make twelve predictions about the years ahead.

Guests:

Daniel Altman

Comments [15]

Daniel Altman from New York City

Thanks to all for your comments. First, as to where I live in economic policy terms, I think you can learn a lot more from reading my books (e.g. Neoconomy) and columns in The New York Times than from a paper I worked on in grad school 13 years ago. For links to all of them, please visit danielaltman.com.

When it comes to free trade, yes, I accept the basic economic axiom that opening markets creates more gains for the winners than losses to the losers. But I am convinced - and I've written this many times - that we need to do a much better job managing the transition from a less-globalized to a more-globalized world. That means spreading around those gains from trade so everyone is better off.

I also think the goal of economic policy should be to maximize welfare (not money or GDP growth) according to a metric that we define as a society. It's a pity that our current policies are so far from doing this.

I'll come back and try to answer more of your comments later this weekend. Thanks again for listening and engaging.

Jan. 22 2011 11:17 AM
amalgam from Manhattan by day, NJ by night

@ Hugh - Thanks for the providing the background context.

Sounds to me like Mr. Altman is a Neoliberal economist.

Jan. 21 2011 02:13 PM
Amy from Manhattan

Thanks for answering my question! But saying that it's whether "the world" demands fair trade sounds as if the entire world has to do it. Isn't it more likely that a smaller part of the world market will demand it & create a market for those products? I'm worried that "fair trade" will have an elite image (like organic foods), when improving conditions for workers will require a wider market. Has anyone studied how demand based on such considerations expands from a small base to "the world," or at least a big part of it? Has it ever happened?

Jan. 21 2011 12:45 PM
Raconteuse from Manhattan & Brooklyn Heights

Brazilian bankers are still in the office until well after market close/close of business.

Jan. 21 2011 12:40 PM
GM from Kew Gardens

Thoughts from Mr Altman on other explanations for growth other than institutions, such as culture (a la Greg Clark's Farewell to Alms)?

Jan. 21 2011 12:38 PM
tom from astoria

Two days ago the Times reported that GE is agreeing to share JET TECHNOLOGY with china. Is it possible that China is beating us at our own game? Isn't it true that our corporations are giving great advantage to a dictatorial authoritarian counrty for cheap labor and looser environmental/labor restaints?

Jan. 21 2011 12:36 PM
Hugh Sansom

To give a sense of where Mr. Altman lives politically, he is a co-author of a proposal -- with conservative Harvard economist (and architect of some of the Reagan disasters) Martin Feldstein -- of a proposal to privatized unemployment insurance: "Unemployment Insurance Savings Accounts." Tax Policy and the Economy, Vol. 21 (2007), pp. 35-63.

Jan. 21 2011 12:33 PM
nico

It is hard to believe the party line that the U.S. will recover (jobs)and prosper through innovation and high-tech industries when we see the 3rd largest solar energy company, Evergreen Solar, pack up its manufacturing in Mass., layoff its 800 "high-tech" workers and give the Chinese Government 50% interest. If Chinese wants to be the leader in high tech, it will - especially with their rare earth resources. What jobs will be left in the U.S.?

Jan. 21 2011 12:27 PM
Amy from Manhattan

I'd like to add fair trade to Peg's list. How does that fit into the picture?

Jan. 21 2011 12:25 PM
Hugh Sansom

Financial black market? Why? The US has effectively left its regulations unchanged!

A quick check of Mr. Altman's background reveals that he a product of the Harvard economics diploma mill. A product of the right-wing delusions of Gregory Mankiw, Andrei Schleifer (instrumental in the annihilation of the Russian economy, though he did fantastically out of the chaos, much as Goldman Sachs did out of destroying the US financial system), Martin Feldstein, and on and on and on.

Jan. 21 2011 12:24 PM
Peg

What about resources - fossil fuels, water, minerals, forests......???? They are not infinite. And global climate change? How do these factor into the global financial analysis?

Jan. 21 2011 12:21 PM
Hugh Sansom

We have seen Americans surrender rights in the hope of material well-being, but the guest is too much of an American hagiographer to admit this, from the sound of it.

The point about the US is well-made by John Kenneth Galbraith in "The Culture of Contentment" (and by many others).

What are we to make of the systematic attacks on American civil liberties -- by President, Congress and courts -- all in the name of pragmatism for business, with the only substantive effect of making wealthier Americans more wealthy (while the rest of us get poorer).

International political theorists have a notion parallel to that of Mr. Altman -- security communities. The evidence for Mr. Altman's claims sound even flimsier.

Jan. 21 2011 12:19 PM
ericf

if he hasn't already please ask guest to define "growth".

Jan. 21 2011 12:17 PM
Hugh Sansom

The catch for the US (that I suspect an NYU business propagandist will ignore):

1. The US has a greater disparity in the distribution of income than China.

2. The US has some of the lowest social mobility in the industrial world (lower than China and lower than any nation in western Europe), so one of the great incentives for entrepreneurship is severely depressed in the US.

3. The evidence is overwhelming that economics disparities of the kind seen in the US have a deleterious effect on liberalism -- democratic and economic.

Jan. 21 2011 12:15 PM
sanych from who knows...

1. China will get richer, then it will get poorer. Who will continue to make the tangible goods consumed by people all over the world? Will we see European bodies in the "Bodies" exhibit?
2. EU will disintegrate. Maybe. Who knows.
3. New colonialism. Same as old colonialism. What else is new?
4. Immigration policies worsening brain drain in poor countries. What about brain drain in rich countries, where the brains are too expensive and can be replaced by cheaper ones?
5. Backlash against capitalism. There is no "capitalism" in the true definition of this world.
6. American will become the world's sales force. Selling what? Ideas? Why anybody else can't do the same?
7. Middleman always wins.
8. Collapse of WTO will be the end of "free trade". It will unlock a lot of things.
9. "Escape to New York" ? As a "lifestyle hub" hated by the rest of the country?
10. Financial black markets. Presumably unregulated. More boom and bust.
11. Global warming is called "global" for a reason. It will affect everybody.
12. The structure of political institutions only change during revolutions. Is one coming?

And now number 13 -- will the dollar as the world currency collapse and will it bring about the WW10?

Jan. 21 2011 12:06 PM

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