Niall Ferguson thinks the 2020s could be economically worse than the 1970s

[funkervogt]

High inflation, trade disruptions thanks to war, bad central bank policies, demographic decline.

[unnaturalmilk]

The demographic aspect is the most worrying. Japan and South Korea will be hit hard by it in the end of this decade after the massive wave of retirements that will happen. I mean, just look at this:

When mid-50s people start retiring, the pressure on the Japanese pension system will be unthinkable

[caltrek]

• It is always a wonder to me how on the one hand so many are concerned about technologically created unemployment, while on the other concerns are expressed about shifting demographics meaning young workers will have to support an increasing number of aged persons. There never seems to be a discussion about how technologically oriented productivity increases may offset demographic problems of changes in the age of the workforce.

• Growth as the be all and end all of all economic effort is the logic of the cancer cell. It would seem to me that socialist economies are particularly well suited to operate economies that do not grow.

• China's problems are not so much demographics as environmental. Global climate change is likely to continue to have very negative consequences for China. Amazing that Ferguson ignores this aspect of the situation.

• Ferguson's comparison to the 1970s omits discussion of the possibilities of converting to renewable energy sources. Clearly, that is a greater possibility today than it was in the 1970s.

• Regrettably, Ferguson does have a point about the continued nationalistic orientation of mainland China and the Taiwan situation. The Chinese government may simply not view things the way that I do and may very well conduct its foreign policy accordingly.

[weatheriscool]

Honestly, I believe that the rich has taken such a large portion of the pie while every one else has so little that it is starting to matter. 75% of the population no longer can afford to buy homes, cars and many literally slave their lives away to even stay off the street. It is getting to the point where the progress of the early to mid 20's century that built the middle class is starting to collapse and my friends it aint going to be pretty.

[funkervogt]

It is always a wonder to me how on the one hand so many are concerned about technologically created unemployment, while on the other concerns are expressed about shifting demographics meaning young workers will have to support an increasing number of aged persons. There never seems to be a discussion about how technologically oriented productivity increases may offset demographic problems of changes in the age of the workforce.

The worry is that there will be a period of time when there are not enough human workers, but machines haven't yet gotten good enough to pick up the slack. It might happen.

Growth as the be all and end all of all economic effort is the logic of the cancer cell. It would seem to me that socialist economies are particularly well suited to operate economies that do not grow.

Maybe. They certainly excel at creating lower-growth economies.

China's problems are not so much demographics as environmental. Global climate change is likely to continue to have very negative consequences for China. Amazing that Ferguson ignores this aspect of the situation.

It's debatable whether climate change is causing or will cause China bigger problems than worsening demographics.

Ferguson's comparison to the 1970s omits discussion of the possibilities of converting to renewable energy sources. Clearly, that is a greater possibility today than it was in the 1970s.

In that video clip he doesn't discuss it, though elsewhere, Ferguson has spoken pessimistically about the switch to green energy: https://www.bloomberg.com/opinion/artic ... e-at-cop26

If the West hadn't sharply slowed down its construction of nuclear reactors starting in the 1970s, we'd be in a much better position now to mitigate climate change. That slowdown didn't happen because of capitalism or conservatism--it happened due to government overregulation and unscientific fears among the general public.

[Lorem Ipsum]

If the West hadn't sharply slowed down its construction of nuclear reactors starting in the 1970s, we'd be in a much better position now to mitigate climate change. That slowdown didn't happen because of capitalism or conservatism--it happened due to government overregulation and unscientific fears among the general public.

Weren't the environmentalists themselves the ones complaining about this?

[funkervogt]

If the West hadn't sharply slowed down its construction of nuclear reactors starting in the 1970s, we'd be in a much better position now to mitigate climate change. That slowdown didn't happen because of capitalism or conservatism--it happened due to government overregulation and unscientific fears among the general public.

Weren't the environmentalists themselves the ones complaining about this?

Yes. The general public bought it, and then politicians (at least in democratic countries) went along with popular sentiment. Democracy doesn't always make the best choice.

[caltrek]

...

If the West hadn't sharply slowed down its construction of nuclear reactors starting in the 1970s, we'd be in a much better position now to mitigate climate change. That slowdown didn't happen because of capitalism or conservatism--it happened due to government overregulation and unscientific fears among the general public.

...and what were the basis of those fears?

Three Mile Island comes to mind. Not to mention Chernobyl. Later Fukushima.

I am not so sure that safety concerns based on those experiences were all that "unscientific."

It is a common dodge to blame government for anything and everything that goes wrong. That is often times a very mythical argument.

In the case of nuclear energy, there is the simple problem of cost. Ensuring safety of operation may very well be a factor in such costs. Failure to employ adequate safety measures can be catastrophic. High costs seem to be prevalent everywhere, no matter what the regulatory climate. There may have been a time when renewables were as costly or more costly than nuclear energy. If so, that time is past. The problem is to convert to renewables fast enough given the shocks of war and material supply bottlenecks. Supply bottlenecks that are not insurmountable due to the possibility of known sources being more efficiently exploited and alternative materials being employed. Still, those sorts of things take time, meaning short term bottleneck problems may definitely arise.

Environmentalists have also been concerned about disposal of nuclear waste. "Geologically stable" areas proposed for underground storage are sometimes not as stable as some would suppose. Even if that is declared to be of minimal risk, there is still the problem of safely transporting such waste from power plants to the place of ultimate storage. Sure, this can be done some of the time, but always without risk?

[funkervogt]

...and what were the basis of those fears?

Three Mile Island comes to mind. Not to mention Chernobyl. Later Fukushima.

I am not so sure that safety concerns based on those experiences were all that "unscientific."

The Three Mile Island incident didn't kill anyone, and the nuclear waste was contained within the building, as it was designed to do in such an emergency. Many changes were made to nuclear power plant designs in the aftermath.

The Chernobyl meltdown involved a reactor that was inherently less safe than Western reactors in wide use at the time. Nevertheless, the Chernobyl meltdown would not have happened were it not for gross human error. They ignored their own protocols. Afterward, the Soviets made changes to their other reactors to prevent the problem from happening again. Several reactors identical to the one that melted down at Chernobyl, but with the upgrades, are still in operation. The deaths from the Chernobyl disaster are also much lower than was first assumed. I think most of the people who died were the ones working at the power plant when it exploded and the first crews of people who responded, without adequate radiation protection.

The Fukushima meltdown happened only because Japan had its worst earthquake and tsunami in 1,000 years. The key problem at the power plant--the bad siting of the backup diesel power generators--was known to the management company beforehand, but they ignored it due to a poor safety culture, which partly owes to elements of Japanese culture that are not present in Western countries. I think so far only one death can be directly blamed on the radiation release. Many more people died during the evacuation from the Fukushima area (mostly elderly people who couldn't handle the stress), including from areas that never received dangerous levels of radiation (residents were allowed to move back in after a few months).

I bet the number of people who die each year in solar panel factory accidents, installation accidents, and due to panels falling off roofs and crushing them below exceeds the number of die thanks to nuclear power, even once the aforementioned disasters are included in the count.

Environmentalists have also been concerned about disposal of nuclear waste. "Geologically stable" areas proposed for underground storage are sometimes not as stable as some would suppose. Even if that is declared to be of minimal risk, there is still the problem of safely transporting such waste from power plants to the place of ultimate storage. Sure, this can be done some of the time, but always without risk?

The complaints about nuclear storage in the U.S. are utterly paranoid. Yucca Mountain is in one of the bleakest places in America, and even if the barrels leaked, it would endanger what...a few dozen or at most a few hundred people?

I've been thinking about this for 20 years, and continue to believe nuclear power is worth it, and America's failure to fully embrace it was a literal tragedy.

[Tadasuke]

Fearmongering as usual, as expected. GDP and GDP per capita are still visibly growing, people are much, much well off than in the 1970s and you are very mistaken to think otherwise. Not focusing more on nuclear energy in the past was a big, big mistake (thank the environmentalists and fossil fuels companies), but it will be corrected. Renewable energy is growing exponentially. Upcoming nuclear reactors (also modular) will be better and are going to be built. Battery technology is becoming better and cheaper at the same time. As for demographics, robots are going to be doing more and more physical and mental work, so the necessary work is going to be done. Inflation is only a very temporary problem. We won't have an inflation problem in 2030 for example. And about "the war", wars were always going on and it hasn't stopped progress. Today there are less wars than 40 years ago for example. 1970s weren't worse economically than the 1920s which weren't worse than the 1870s which weren't worse than the 1820s which weren't worse than the 1770s, so 2020s are going to be much better economically than the 1970s and no war or trade disruption is going to undo it. I expect 5% YoY growth in global GDP every year up to 2030 and then 10% every year up to 2040 after which it will switch gears to 15% every year, because of greater automation. Some people are even suggesting more than 20% starting from 2030 (that may be too optimistic). I expect energy in 2030 to be cheaper than in 2020 and stuff will be cheaper too. So don't worry, things will be mostly fine.

[peekpok]

Honestly, I believe that the rich has taken such a large portion of the pie while every one else has so little that it is starting to matter. 75% of the population no longer can afford to buy homes, cars and many literally slave their lives away to even stay off the street. It is getting to the point where the progress of the early to mid 20's century that built the middle class is starting to collapse and my friends it aint going to be pretty.

I tend to agree with this. The economy has, in fact, grown exponentially without stopping for the majority of the last 50 years so the fact that anybody's life should be getting worse is totally absurd. I see the effects of this growth every day during my commute to work when I pass literally hundreds of relatively new (manufactured in the past 3-5 years) luxury cars that cost $50,000+, and some well more than that. It's also why so many silicon valley vaporware companies are now attaining massive valuations without ever turning a profit, or in many cases even selling a product. Rich people have so much wealth that they can't even find places to invest it. They'll invest in anything but the actual success of our society itself.

[Solaris]

Honestly, I believe that the rich has taken such a large portion of the pie while every one else has so little that it is starting to matter. 75% of the population no longer can afford to buy homes, cars and many literally slave their lives away to even stay off the street. It is getting to the point where the progress of the early to mid 20's century that built the middle class is starting to collapse and my friends it aint going to be pretty.

I tend to agree with this. The economy has, in fact, grown exponentially without stopping for the majority of the last 50 years so the fact that anybody's life should be getting worse is totally absurd. I see the effects of this growth every day during my commute to work when I pass literally hundreds of relatively new (manufactured in the past 3-5 years) luxury cars that cost $50,000+, and some well more than that. It's also why so many silicon valley vaporware companies are now attaining massive valuations without ever turning a profit, or in many cases even selling a product. Rich people have so much wealth that they can't even find places to invest it. They'll invest in anything but the actual success of our society itself.

This is simply not true. People invest in start ups with the belief that they will generate a profit. A few individuals invest without thinking about profit, but there is always a purpose. There is no one investing in random things just because they can. To understand why so much money is invested in start ups that doesn't generate any profit demands some knowledge about business and economics, which I won't bother you with, but your sentences doesn't make much sense in my eyes.

[peekpok]

Honestly, I believe that the rich has taken such a large portion of the pie while every one else has so little that it is starting to matter. 75% of the population no longer can afford to buy homes, cars and many literally slave their lives away to even stay off the street. It is getting to the point where the progress of the early to mid 20's century that built the middle class is starting to collapse and my friends it aint going to be pretty.

I tend to agree with this. The economy has, in fact, grown exponentially without stopping for the majority of the last 50 years so the fact that anybody's life should be getting worse is totally absurd. I see the effects of this growth every day during my commute to work when I pass literally hundreds of relatively new (manufactured in the past 3-5 years) luxury cars that cost $50,000+, and some well more than that. It's also why so many silicon valley vaporware companies are now attaining massive valuations without ever turning a profit, or in many cases even selling a product. Rich people have so much wealth that they can't even find places to invest it. They'll invest in anything but the actual success of our society itself.

This is simply not true. People invest in start ups with the belief that they will generate a profit. A few individuals invest without thinking about profit, but there is always a purpose. There is no one investing in random things just because they can. To understand why so much money is invested in start ups that doesn't generate any profit demands some knowledge about business and economics, which I won't bother you with, but your sentences doesn't make much sense in my eyes.

It's not that investors aren't trying to make money. Of course they are. However, things that our society actually needs, and which will cause economic growth, like better education, better infrastructure, etc are not invested in because our capitalist market system doesn't provide any incentive to do so.

[funkervogt]

Here's another recent Niall Ferguson interview. This time, he makes near-term predictions about war and geopolitics instead of the economy. He foresees major military action involving Iran as the likeliest thing to happen, followed by a showdown between the U.S. and China over Taiwan. Ferguson views the ongoing Ukraine War as analogous to the Korean War in the sense that both Wars kicked off their respective Cold Wars and focused the West on the threat from the other side.

[lechwall]

Inflation is already receding somewhat and based on what I'm hearing about GPT 4 which is due out this year there are going to be some major developments in the AI space which will positively impact GDP. It may well be that in the UK due to our own disastorous Brexit policy (something Ferguson wouldn't acknowledge) but for the world as a whole I don't see it.