Lights at the End of the Tunnel

Let’s turn things around: Given peak oil, trade skirmishes, debt immolation, a collapsing dollar, environmental degradation, a decline in U.S. standard of living, ballooning population, etc … what are some non-trivial reasons to be optimistic about how this moment in economic/human history turns out?

I’m serious. Even if you don’t believe it -- and the NY Post recently labeled me a “doom enthusiast,” so I admittedly skew bearish -- let's try to make an optimist’s arguments better than they can.

Here are some examples:

• As the developing world reaches first-world levels of per-capita wealth we will see more wealth creation -- and profits -- in the next two decades than in the last hundred years.
• The forced transition to a post-carbon economy will blow a hole in models of environmental degradation, as well as create new opportunities.
• Capital markets have shed more risk at a faster pace than at any time in recent history, setting them up to fund much more new growth than anyone expects.
• Ideas are more fecund than ever, with a network-driven accelerated pace of innovation and invention, much of which is focused on today’s most important problems like energy, the environment, etc.
• Human health and lifespan continue to improve, making people more productive for longer periods than ever before.
• Global population will plateau over the next decade and then begin to decline world-wide.
• Even if the subprime mess nearly blew up the world, we have democratized credit, which means many people will be able to invest in and create products/services that otherwise they would not.

Comments

[Donald Ingram:]

World War III will give full employment for every one! Albert Einstein was once asked how a third world war would be fought? He said that he didn't know, however that that the fourth world war would be fought with sticks and stones!

Oct 01 03:39 PM

[jugoso:]

global population will plateau in the next decade and then decline? i don't know what stats the author is referring to, but everything i've read put global population at around 9 billion by mid century. that's up from around 6.5 billion worldwide today. i can't see almost 50% more people "blowing holes in environmental degradation" as the author put it. i just hope he is right and everyone else is wrong

Oct 01 03:57 PM

[Tony Petroski:]

Mr. Kedrosky, the admitted bear and erstwhile doom enthusiast:

"Let’s turn things around: Given peak oil, trade skirmishes, debt immolation, a collapsing dollar, environmental degradation, a decline in U.S. standard of living, ballooning population, etc … what are some non-trivial reasons to be optimistic about how this moment in economic/human history turns out?"

Thank you Mr. Kedrosky for a little fresh air. Your points are well taken.

I think your first point is the obvious one, the rising tide that lifts all boats. It wasn't that long ago that futurists were brightening our day explaining that soon 1 billion Chinese people would be drinking Coca Cola. What happened to that optimism?

You write of a "forced transition" to a "post-carbon economy." Why does it have to be forced? Why the fetish over carbon?

We are making the transition from a "population bomb" world to a "baby dearth" world and you're smart to notice it. Let's watch the Japanese struggle with that one and see what we can learn from it.

A ray of hope when a doomster sees lights at the end of the tunnel. Are we truly in a tunnel?

Oct 01 06:35 PM

[Roger Knights:]

I am unpersuaded and see instead blight at the end of the funnel.

Oct 01 07:23 PM

[ObjectiveFu...:]

Still betting on at least one Pandemic to wipe out a large chunk of the poor, separating societies with a competent social order and resources from those which will be decimated. To quote the DKs "the rich will have more room to play..."

One other semi-relevant comment: seems to me that ~3/4 of the most driven, talented under-30 people I encounter in my business (Eastern USA) are of South Asian heritage. Ambitious too -- virtually every person who has reached out to me via my college and MBA networks has been a South Asian. The Asian century is already here, and welcome.

Oct 02 03:37 PM