Back in 1939, some newsreel producer asked fashion designers to predict what people would be wearing in the year 2000, resulting in a delightful minute-long feature describing what the people of the distant past thought we would look like. Some predictions — like wedding dresses made of glass and ladies weaving microphone-sized light bulbs into their hair "to help her to find an honest man" — missed the mark. Others — like a phone attached to a man's chest and women wearing pants — seem more prescient.
The idea wasn't an original one. In 1899, a French artist produced a series of postcards depicting everyday life in the year 2000, which feature underwater buses towed by whales and classrooms in which books are fed into a grinder that funnels knowledge directly into children's heads. In 1895, H.G. Wells wrote about a future in which economic disparities of the Gilded Age harden into evolutionary disparities between the slight, intellectual Eloi and the ignorant, brutish Morlocks. More recently, the "Back to the Future" movies predicted a Cubs World Series win in 2015 (which was pretty close) and the rise of hoverboards (which was not).
All of this is to say that when we cast our eyes to the future, the inevitable result mostly reflects the preoccupations of our own time flecked with glimmers of prescience and/or lucky guesses.
But the examples just described were created for the purposes of entertainment. By contrast, in "The New World Economy in 5 Trends: Investing in Times of Superinflation, Hyperinnovation and Climate Transition," authors Koen De Leus and Philippe Gisjels undertake a more serious plan: identifying the long-term economic trends of the 21st century.
The authors do away with any suspense about what those trends are within the first few pages of their book: Technology and innovation in artificial intelligence and quantum computing will drive productivity exponentially within the next 20 to 50 years; the urgency of climate change will demand decades' worth of investments all over the globe; globalization will give way to nearshoring; developed countries will be forced to reckon with their sizable debts; and an aging population will create challenges that inform all of the above.
At the core of these predictions: Low interest rates are never coming back.
The plausibility of these trends seems apparent. Certainly, there isn't much reason to think climate change is going anywhere in the next 100 years, nor is the aging of the baby boomers. Artificial intelligence and quantum computing certainly have the potential to be transformative technologies, and the shifting sands of nearshoring and the dubious long-term stability of government debt seem like problems that today's kindergarteners will still be grappling with.
But it's also possible that if we were handed a newspaper from the year 2042 — one of the many creative devices the authors use to tell their story — we would find some of these trends absent and others we've never thought of dominating the news.
Take climate change, which — as the authors point out — will require a global shift in fuel sources. Those kinds of shifts have happened before — kerosene beat out whale oil in the 1850s because it was cheaper and just as good; electricity replaced kerosene 50 years later because it was cheaper, just as good and was less likely to burn your house down. In the case of our planet, shifting to electricity-based energy consumption at a global scale would require government policies to shift, and it's not clear that such a transition is inevitable — at least in the near term.
The profound productivity gains brought about by emerging technologies also strikes me as a plausible but far from inevitable trend of the future. One observation the authors make is that global productivity grows in fits and starts, corresponding with the advent of transformative technologies. While the rise of cheap computers boosted productivity, the smartphone/online revolution has not — in part because things like free GPS maps and Wikipedia replaced physical maps and the Encyclopedia Britannica that used to cost money and thus contribute to the economy.
We do seem to be on the cusp of an era in which AI will do mundane tasks that people have had to be paid to do until now. But the real advances will come when technology invents new technology or uses for old technology that people wouldn't have thought of on their own. Quantum computing likewise has important security and research uses that could further hasten that moment.
When matters turn to debt, interest rates and globalization, the outlook seems fuzzier. It's not a new observation that the zero-interest-rate era immediately following the Great Financial Crisis of 2007-08 created distorted valuations across the economy, nor are the authors the first to posit that such an episode is unlikely to return anytime soon. But that readjustment is very top-of-mind today and may not still be in 50 to 75 years. Whether those pressures — combined with the demographic and technological advancements already described — will demand something resembling fiscal discipline by the end of the century seems plausible, but will happen or not depending on factors we cannot possibly foresee.
None of this is to say that the book is wrongheaded or naïve — far from it. Whatever misgivings I have about the book are attributable to the impossibility of the endeavor the authors have undertaken — to create a sort of speculative Grays Sports Almanac for the global economy. Economists have a tendency to view trends as pure and disruptions to those trends as aberrations, when in reality the aberrations can be far more instructive (you'll recall the "transitory" inflation of 2021). Perhaps we might be taking underwater buses pulled by whales today if we had a hundred years in a row that were all just like 1899. But as it happened, we had World War I, World War II, television, antibiotics, nuclear power, nuclear weapons, space flight, the vacuum tube, the transistor, the computer, the internet and Candy Crush.
What does seem to hold true is that people, like water, tend to follow the path of least resistance — revolutions in the way technology is adopted and behavior adapted occur because a new way is cheaper, easier, better or all of these. People don't always follow that pattern — collective courage and determination do happen — but it can be difficult to know with foresight when they won't. As Yogi Berra famously said, it's hard to make predictions — especially about the future.