Loosening the grip of oligarchy

Posted in economics, emerging issues, politics by thenextwavefutures on 20 April, 2014

There’s a moment in this interview with Paul Krugman about Thomas Piketty’s book Capital In The 21st Century where Bill Moyers asks Krugman this question:

Moyers: Do you agree with [Piketty] that we’re drifting towards oligarchy?

And Krugman gives him this reply:

Krugman: Oh yes. There’s no question of that.

And watching it I realised that the next political phase of the campaign started by Occupy is now starting to emerge.


China’s prospects

Posted in China, economics by thenextwavefutures on 31 January, 2014

China 5576_5243a75446169-386x289Over at The Futures Company’s blog I have a post up about the challenges facing businesses – a look back at a Future Perspective we published on China a couple of years ago.

Here’s an extract about the country’s economic prospects:

“While the last three decades tell us that it’s unwise to bet against China fixing its problems, there are some big questions.

“One is about the effectiveness of the transition to a consumer economy, which needs significant institutional change if it is to work. This leads to a second question, of whether China’s market institutions are robust enough and trusted enough to support such a transition; this is almost certainly one factor behind the country’s anti-corruption drive. An important issue in this is openness: despite its huge internal market there will be doubts about how effectively China can modernize or innovate while it shuts off its internet from the world. The cost of managing its “Golden Shield” is said to be $1.6 billion to date.

“A third question is about the cost of unwinding or writing off stranded assets, whether they are ghost cities or the government’s cotton mountain, bought at prices well about the world market. There are also questions about the overall levels of Chinese debt, and whether a combination of asset bubbles, shadow finance, and bad debts throughout the country’s banking system could prompt a financial crisis. Finally, there are signs that the “Chimerica” system, under which Chinese savings bought American debt, and Americans then bought Chinese goods, is coming to an end.

“As Robert Gottliebsen argued recently in Australia’s Business Spectator:

China does not want to fund further US deficits and the US wants to reduce its deficits. And so the US-China model that has dominated the world is changing and Chinese consumers must be stimulated to replace the Americans. … The Chinese leadership understands this but changing the model will not be easy, particularly as the population is ageing. Japan tried a similar switch and failed.”

The image at the top of this post is from Wikimedia, and is used here, with thanks, under a Creative Commons licence.

Bringing it back home

Posted in economics, emerging issues, energy, scenarios, work by thenextwavefutures on 25 January, 2014

????????????????????????????????????????An emerging trend toward re-shoring production is driven by energy costs, customer demands for shorter runs and more flexibility, and the way high-value knowledge is created.

A few years ago I wrote a set of scenarios – with Joe Ballantyne and Andy Sumner – on the prospects for the world economy to the early 2020s. In one of the scenarios we saw the “West” regenerate itself by a combination of public investment and by bringing home its high value manufacturing. After I’d drafted this post, David Cameron popped up at Davos to promote the idea of “re-shoring”, even if he seems less keen on the notion of public investment. And according to a recent report in The Conversation by some Birmingham University researchers, there are signs that re-shoring is starting to happen, that British businesses are  bringing it back home.

The coming decline of London

Posted in cities, economics, housing, politics by thenextwavefutures on 21 October, 2013

So, by way of a thought experiment: what if London is about to peak? The reason would be the way housing provision and housing regulation had destroyed the economic balance of the city, and there are some serious warning signs. Recently, there’s also been a wave of commentary on this. But first, let’s just roll back to the ’70s.

Straining the train

Posted in economics, politics, transport by thenextwavefutures on 22 September, 2013

Britain’s high speed train project, HS2, is something of an enigma wrapped in a mystery. The projected costs are spiralling, currently at £50bln and counting; the line antagonises voters in every constituency it is planned to run through, and could cost the government seats in the next election; and pretty much every credible transport expert says that if you’re going to spend that much money on rail infrastructure you’re better linking regions together rather than creating a faster funnel into London. And yet the project stays afloat, buoyed up, it seems, by the claims of its supporters.  (more…)

The cause of the suffering

Posted in economics, politics by thenextwavefutures on 29 June, 2013

I spotted this in a review by the critic Terry Eagleton:

Bertolt Brecht tells the tale of a king in the East who was pained by all the suffering in the world. So he called his wise men together and asked them to inquire into its cause. The wise men duly looked into the matter, and returned with the news that the cause of the world’s suffering was the king.

The review is of The Frontman: Bono (In Name of Power), by Harry Browne. The image is from Wikimedia Commons, and is used with thanks. 

1932 and all that

Posted in banks, economics, history by thenextwavefutures on 12 May, 2013

I’m indebted to a letter in The Guardian for this account by J K Galbraith of the history of the American economy between 1929′ the year of the Crash, and 1932, the last year of the Hoover administration:

“Gradually interest rates were brought down. The rate at which banks could borrow was 1.5%, hardly a usurious charge. Bonds were bought on a considerable scale and the resultant cash went out to the banks. Soon the banks were flush with lendable funds.

“All that remained was for customers to come to the banks. Now came a terrible discovery. The customers wouldn’t come. Even at the lowest rate they didn’t think they could make money. And the banks wouldn’t lend to those who were so foolish as to believe that they could.”

And people say that history never repeats itself.


The image is a 1932 cartoon mocking Hoover for asserting that prosperity was just around the corner. It is from the Princeton Alumni Weekly,  and is used with thanks. 

‘Freedom’, ‘choice’, and zombie capitalism

Posted in economics, history, politics by thenextwavefutures on 12 April, 2013

thatcher-headlines-after-deathThe best joke I heard after Thatcher’s death was announced went like this:

Mrs Thatcher’s only been in Hell for 30 minutes, and already she’s closed three of the furnaces and another three are on strike.

It wasn’t on Twitter, or on a political blog, but on the listserv of some football fans – fans, as it happens, of a club in a former mining area in the north of England. As Hugo Young said in his posthumously published piece on her (he died in 2003) in Tuesday’s Guardian, “Thatcher was a naturally, perhaps incurably, divisive figure.”

For my part, I think you need only one chart to understand her influence on Britain, which shows the step-change in inequality during her time in power. I’ve published this here before, when I blogged on the 30th anniversary of her first election victory:



Ten notes on the financial crisis (guest post)

Posted in blindspot, climate change, economics, finance, politics, sustainability by thenextwavefutures on 2 April, 2013

RobTheWorldOver at the excellent Global Dashboard, Alex Evans has a post reflecting on the things he and David Stevens called wrong (and less wrong), looking through their development and poverty lens, in the aftermath of the crisis. In a similar spirit, my sometime colleague Ian Christie sent me ‘Ten notes on the crisis’, representing his take on what we’d learnt about economics and politics since 2008. I thought they deserved a wider audience. And so, with his permission, I’m republishing his Ten Notes here. They start below the fold.


Made in Britain? Not so much

Posted in economics, oil by thenextwavefutures on 18 March, 2013

One of the most alarming articles I’ve read this month was by the Cambridge-based economist Ha-Joon Chang. He’s the author of 23 Things You Didn’t Know About Capitalism, and has a sharp eye for how markets and economies work in practice. Anyway, he noted that despite a substantial devaluation of the pound since the financial crisis, both service exports and manufacturing exports had also fallen. This isn’t how devaluation is supposed to work.