Geopolitics, not anti-globalization, is the real threat to the global economy. US decline doesn’t have to end in its fall. Let’s be realistic about generative AI’s economic impact. Generosity is more widespread than often assumed and the assumption that opposites attract seems to be a fallacy too.
QUOTE OF THE WEEK
ARTICLE OF THE WEEK
Dani Rodrik, The Global Economy’s Real Enemy is Geopolitics, Not Protectionism
(Project Syndicate, 6 September 2023)
An exhortation to focus on the risk that really matters. Rodrik argues that the backlash against hyper-globalization and the promotion of policies decried as protectionist constitutes a “rebalancing toward addressing important national issues” like left-behind regions, the climate transition, and public health. In his view, this rebalancing is necessary both to heal the social and environmental damage done under hyper-globalization, and to establish a healthier form of globalization. He says that the biggest risk to the global economy stems not from this broader reorientation (“that we should welcome”) but from a Sino-American rivalry that threatens to drag everyone down (metered paywall with prior registration, 6-8 min).
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John Rapley, America Is an Empire in Decline. That Doesn’t Mean It Has to Fall
(The New York Times, 4 September 2023)
Obvious but not always well understood. After WWII, the US developed an international trading and financial system that functioned in practice as an imperial economy, progressively attaining a degree of world domination no previous empire had ever known. But in the past two decades, it has sunk into relative decline with institutions (like BRICS and OPEC) and countries (like China) converting their growing economic heft into political power. Will the US follow the course of all empires: doomed to decline and eventual fall? Not necessarily according to Rapley. With the right choices, it can “look forward to a future in which it remains the world’s pre-eminent nation” argues the author of “Why Empires Fall: Rome, America and the Future of the West”. His analysis is based on the example of the Roman empire (gifted article, reads in 7-9 min).
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Philipp Carlsson-Szlezak, Paul Swartz, François Candelon, Why we need to be realistic about generative AI’s economic impact
(World Economic Forum, 31 August 2023)
The three BCG consultants state that tech’s impact on productivity growth has always been overstated and wonder whether the same will be true of generative AI. They make two critical observations: (1) Large productivity shifts are driven by cost reduction, which generative AI can do, but its likely macroeconomic impact should not be overstated. (2) Many firms will be losers as cost leaders reap the benefits, but the true winners will be consumers as technology drives down prices (free access, reads in 5-7 min).
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David Brooks, People Are More Generous Than You May Think
(The New York Times, 31 August 2023)
Over the centuries, many of our leading lights have taken the view that most people are selfish, but this now appears to have been wrong. Much recent research concludes the opposite, with one scientist observing: “In practically no human society examined under controlled conditions have the majority of people consistently behaved selfishly.” Could selfishness be a Western disease? Brooks concludes saying: “We in the West have gone overboard in building systems that try to motivate people by appealing mostly to their economic self-interest. We build inhumane systems in which material incentives blot out social and moral incentives. And we’ve made ourselves miserable along the way” (gifted article, reads in 5-7 min).
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Ian Sample, Opposites don’t attract: couples more likely to be similar than different, study shows
(The Guardian, 4 September 2023)
Should this come as a surprise? A new study debunks the fallacy of the “power of animal magnetism” that’s supposed to bring couples together. In reality, when it comes to who we fall for, scientists claim there’s little truth in the old adage that opposites attract. This new research on romantic relationships found that for more than 80% of traits analyzed – from political views to drug taking and the age at which people first had sex – partners were often remarkably similar. Many studies suggest that people increasingly pair up along educational backgrounds, raising concerns of a widening socioeconomic divide (free access – reads in 6-7 min).
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