Weekly Selection 17 January 2020

Ruchir Sharma, How To Invest: Ten Big Trends Of The 2020s

(NDTV, January 15, 2020)

The Morgan Stanley global strategist / author offers 10 predictions for the next decade. Interesting not because of their predictive value, but because they may force us to rethink some assumptions: (1) The Rest will rise again; (2) Smaller companies will be beautiful again; (3) Tech giants may fall; (4) Deglobalisation will give way to localization; (5) Depopulation will slow economic growth; (6) New generations will shape economic trends; (7) Polarisation may peak; (8) Inflation may stage a comeback; (9) The Fifth Estate will rule; (10) The rise of moral capitalism (reads in 6-7 min).

Jim O’Neill, Has the World Economy Reached Peak Growth?

(Project Syndicate, January 16, 2020)

The former chief economist of Goldman Sachs offers a panoramic overview of global GDP growth over the next ten years. It will be lower than during the teens, barring a notable improvement in productivity in the West and China, or a sustained acceleration in India and the largest African economies. The reason: demographic realities will catch up with China and the West, and the world will need a productivity miracle to offset the effects (reads in 4-5 min).

Larry Elliott, IMF boss says raise taxes on the rich to tackle inequality

(The Guardian, January 7, 2020)

When even the IMF says that income tax on the wealthy should be raised, you know it’s coming! Kristalina Georgieva - the IMF Managing Director - calls for a rethink of economic policies to better help those left behind. She claims that marginal tax rates can be raised without sacrificing economic growth and argues that many less well-off countries needed to scale up social spending if they were to have a chance of meeting the UN’s 2030 17 sustainable development goals (SDGs), which include reducing inequality (reads in 4-5 min).

Joshua Rotman, The Equality Conundrum

(The New Yorker, January 13, 2020)

This longish piece (15 min+) turns the problem of inequality upside down by asking what kind of equality is good. This is a philosophical rather than an economic question. Egalitarians see people as equal (“We are all born equal”) and unequal simultaneously: inequality of all kinds is everywhere and un-ignorable, but the principle of “deep equality” means that all human societies face a constant trade-off between treating people equally and treating them “as equals.” A great read to grasp the notions of equality of resources, equality of welfare, the problem of expensive tastes (a necessity to one person is a luxury to another), the distinction between choice and luck and more!

Amy Fleming, The case for ... making low-tech 'dumb' cities instead of 'smart' ones

(The Guardian, January 15, 2020)

This article makes the case that smart cities will be exceedingly complex to manage and will present all sorts of unpredictable vulnerabilities – it recommends instead to address new challenges (adverse weather, carbon overload, choking pollution, etc.) by using the best of old ideas. As one architect puts it: “nature is smart, and our ancient wisdom tells us how to live with nature in a smart way.” Cities like Copenhagen and Shenzhen are proof that “dumb” and “smart” can co-exist (reads in 7-8 min).