The best of capitalism is over for rich countries – and for the poor ones it will be over by 2060

A grim forecast for the future from Paul Mason, economics editor at the UK’s Channel 4 News, writing at The Guardian

One of the upsides of having a global elite is that at least they know what’s going on. We, the deluded masses, may have to wait for decades to find out who the paedophiles in high places are; and which banks are criminal, or bust. But the elite are supposed to know in real time – and on that basis to make accurate predictions.

Just how difficult this has become was shown last week when the OECD released its predictions for the world economy until 2060. These are that growth will slow to around two-thirds its current rate; that inequality will increase massively; and that there is a big risk that climate change will make things worse. Despite all this, says the OECD, the world will be four times richer, more productive, more globalised and more highly educated. If you are struggling to rationalise the two halves of that prediction then don’t worry – so are some of the best-qualified economists on earth.

World growth will slow to 2.7%, says the Paris-based thinktank, because the catch-up effects boosting growth in the developing world – population growth, education, urbanisation – will peter out. Even before that happens, near-stagnation in advanced economies means a long-term global average over the next 50 years of just 3% growth, which is low. The growth of high-skilled jobs and the automation of medium-skilled jobs means, on the central projection, that inequality will rise by 30%. By 2060 countries such as Sweden will have levels of inequality currently seen in the USA: think Gary, Indiana, in the suburbs of Stockholm.

The whole projection is overlaid by the risk that the economic effects of climate change begin to destroy capital, coastal land and agriculture in the first half of the century, shaving up to 2.5% off world GDP and 6% in south-east Asia.

The bleakest part of the OECD report lies not in what it projects but what it assumes. It assumes, first, a rapid rise in productivity, due to information technology. Three-quarters of all the growth expected comes from this. However, that assumption is, as the report states euphemistically, “high compared with recent history”.

There is no certainty at all that the information revolution of the past 20 years will cascade down into ever more highly productive and value-creating industries. The OECD said last year that, while the internet had probably boosted the US economy by up to 13%, the wider economic effects were probably bigger, unmeasurable and not captured by the market. The veteran US economist Robert Gordon has suggested the productivity boost from info-tech is real but already spent. Either way, there is a fairly big risk that the meagre 3% growth projected comes closer to 1%.

And then there’s the migration problem. To make the central scenario work, Europe and the USA each have to absorb 50 million migrants between now and 2060, with the rest of the developed world absorbing another 30 million. Without that, the workforce and the tax base shrinks so badly that states go bust.

[continues at The Guardian.]


Majestic is gadfly emeritus.

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16 Comments on "The best of capitalism is over for rich countries – and for the poor ones it will be over by 2060"

  1. erte4wt4etrg | Jul 8, 2014 at 10:07 pm |

    You goddamn fucking maniacs

    • laurakfalconer | Jul 10, 2014 at 3:34 am |

      My Uncle
      Riley got an almost new red GMC Canyon just by some parttime working online
      with a laptop. visit their website C­a­s­h­f­i­g­.­C­O­M­

  2. Anarchy Pony | Jul 8, 2014 at 10:33 pm |

    So it’s probably gonna be even more bleak than that? I thought so.

  3. Woobniggurath | Jul 9, 2014 at 1:59 am |

    >These are that growth will slow to around two-thirds its current rate;
    that inequality will increase massively; and that there is a big risk
    that climate change will make things worse. Despite all this, says the
    OECD, the world will be four times richer, more productive, more
    globalised and more highly educated<

    I doubt I could formulate a scenario more ripe for revolution.

  4. Liam_McGonagle | Jul 9, 2014 at 9:38 am |

    “The OECD’s prescription – more globalisation, more privatisation, more austerity, more migration and a wealth tax if you can pull it off – will carry weight. But not with everybody. The ultimate lesson from the report is that, sooner or later, an alternative programme to “more of the same” will emerge. Because populations armed with smartphones, and an increased sense of their human rights, will not accept a future of high inequality and low growth.”

    Yes they will accept it.

    • emperorreagan | Jul 9, 2014 at 9:55 am |

      Well, as long as the US foreign policy of destabilization and assassination in any country that begins to adopt a different economic path continues.

      • Liam_McGonagle | Jul 9, 2014 at 10:20 am |

        Like Hindusim’s Kalpas, Yugas, Mahayugas and Maha-Manvtantaras, Capitalism has a system of expanding business cycles. The maha-business cycle is: 1. technological innovation; 2. oligarchy; 3. warfare.

  5. mannyfurious | Jul 9, 2014 at 10:58 am |

    These dipshits don’t know what they’re talking about. Economics is not a science. Even most sciences aren’t sciences.

    Unfortunately, capitalism has proven itself to be quite adaptive and malleable. Quite frankly, it wasn’t supposed to be this successful for this long after the collapse of more traditional and overt forms of colonialism. And, yet, here we are….

    • Liam_McGonagle | Jul 9, 2014 at 11:12 am |

      What I think is the most interesting implication (at least as I see it) of your observation is that there really is no such thing as a “pure” economic regime. Government subsidies both direct and indirect (e.g., judicial deck stacking) obscure from us both the workings of the current paradigm but also its solution.

      • mannyfurious | Jul 9, 2014 at 12:23 pm |

        Sure. But for the people benefiting from the current paradigm, the only “solution” that needs to be decided is how to keep the ball rolling.Certainly they obscure from the rest of us the solution of how to change the paradigm. Most of us don’t even really think the paradigm needs to be fixed. Mostly we just blame it on immigrants or welfare or something.

  6. Jonas Planck | Jul 9, 2014 at 1:05 pm |

    The problem with culture and economics is the same as the problem with computing scattering amplitudes in quantum field theory… The source and detector are always linked by a connected chain of retarded propagators.
    That was a really bad pun.

    • Simon Valentine | Jul 9, 2014 at 1:22 pm |

      best post evar

      “we need some meta feynman on the feynman over here mister serious feynman!!!!!!”

      people somehow love/choose/ignore stupefaction
      may as well have once sentence that people say
      “i commandest thou to be stupid.”
      and one thing that they mean

      personally i aneurism myself to hard over spouting off “everyone is so fucking stupid in the same god damn way” way too often. that’s probably why i simplified and got the “Simon says you suck” tee shirt.

      • Jonas Planck | Jul 9, 2014 at 4:33 pm |

        Commanding people to be stupid seems to be the job of popular media rather than internet comment babble… The general populace much prefers to just accuse others of stupidity as punishment for being unable to completely grok what they’re saying. Whether that’s a valid call, who can say? There are much more than a trillion sides to every coin, after all… but that polycount can always be trimmed down to save on rendering time. Normal mapping is a godsend, but can one ever really map what is “normal?”

        …lol, I think I’m starting to get the hang of this!

        • Simon Valentine | Jul 9, 2014 at 6:09 pm |

          by jove you’ve done it!

          save i cannot recall dear jove *doink*

          punishment indeed. “let us practice” they said “and speak not directly of our khala, our psionic power!” … protoss newbs.


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