Is the Party Over for Economic Growth? Jeffrey Sachs on America and a New World 2 months ago   1:25:09

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iqsquared
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It was a blast. Since the Industrial Revolution, we enjoyed unprecedented economic growth, propelled by a seemingly unstoppable wave of technological innovation. For 100 years from around 1870, life in the West was transformed by inventions such as electricity, the car and domestic appliances, which led to soaring growth, better lives and booming wealth for all. The poor became less poor, and the number of middle income earners exploded. In the second half of the 20th century the rest of the world began to catch up, with China lifting hundreds of millions out of extreme poverty and the rise of the BRICs.

But then it stopped. Since around 1970, middle incomes in the US have stagnated, while the top 1% have pulled away in terms of earnings and wealth. Productivity growth fell. The great recession of 2008 was expected to be a blip but we are still in the doldrums. China’s miracle growth has shuddered to a slowdown and is set to drop even further. Just last week, the European Central Bank announced fresh rounds of quantitative easing to try and pump life into the eurozone’s flagging economy.

Many economists are now predicting that stagnation is here to stay. We may hear a lot of excited talk from the techno-optimists about the Second Machine Age and the Fourth Industrial Revolution and the rewards they are set to bring us, but some say that most of the fruits of the IT revolution have already been harvested. For example, driverless cars may be the future, but they will change the world far less than the invention of cars in the first place – and put millions of professional drivers out of a job.
If the age of endless growth is over, how should we assess the implications? Does the developed world face decades of misery-inducing recession, or – given that the planet’s resources are finite – can we look forward to a more sustainable future where ever-increasing consumption does not count as the main good? Or are the economic doom-mongers wrong? Will capitalism, that engine of human ingenuity, continue to be the route to rising prosperity for all? If so, what are the mechanisms that will kick-start the global economy again?

On 16th May 2016, we were joined by a star panel for this major discussion on the future of the global economy. On stage were Stephanie Flanders, JP Morgan’s chief market strategist for Europe; Deirdre McCloskey, acclaimed US economic historian; and Tim Jackson, Professor of Sustainable Development at the University of Surrey and author of 'Prosperity Without Growth: Economics for a Finite Planet'. The event was chaired by Economics Editor of BBC News Kamal Ahmed.

Comments 22 Comments

Alex G. Leon
Excellent video. I suggest you also read this post that I think is very relevant when we talk about this topic. Why is the rate of economic growth in developing countries generally higher than in developed countries?
https://wordpress.com/post/alexandergleon.wordpress.com/62
brinbrin62 62200
"Sub-Saharan Africa is one place of optimism..." I though it was a bunch of shitty countries. I had it aaaaall wrong.
Just kidding. Third world is not gonna rise anytime soon. Currently they are exporting their subhuman genetics to Europe. More than this, any political system that put "human equality" at the center of its ideology is just doomed to fail. Humans may have equal rights, but that's all. Their physical strength and their intelligence are the two key factors of their social integration. Humans are not equal. People are not equals. Human beings are not equal. And there's nothing that socialism can do to address what is not an issue. Period. The Pareto law is like the laws of thermodynamics : You can do nothing about it. 20 % of the people will always own 80 % of the wealth. To try to bend reality leads to Utopian totalitarianism.

BTW : Growth has nothing to do with demographics. The key factor is available cheap energy. World population has increased seven-fold due to coal and oil during the industrial revolution. Once oil has reached its peak (and it has in 2005), the oil will get less available. Within the next decade, we will see the world population dramatically shrink through wars, starvation and epidemics. I've not heard the word "energy" once during this video (I may have missed it, though), so I guess these people do not even know what they are talking about.

See also these two articles by Paul chefurka : "No really, how sustainable are we? " (http://www.paulchefurka.ca/Sustainability.html) and "World Energy and Population
Trends to 2100" (http://www.paulchefurka.ca/WEAP/WEAP.html)
SYED ADEEL HUSSAIN
they have to read Rostow's model ! Also some Austrian interpretation would do.
jackgoldman1
Liberals who do not create wealth, who have positions, are idiots and don't understand the real world. Conservatives are much wiser about the real world, thus the "liberal" and conservative labels. Too many parasitic college graduates who are wasteful.
jackgoldman1
Debt is the crisis because we have sold our children into debt slavery to live luxuriously. I am not responsible for people outside my nation. I can not going save the world. I just want to save myself. Screw the foreign nations that have to save them self.
jackgoldman1
Global warming done by humans is a hoax. Getting our machines and emissions more efficient is just intelligent. Get rid of waste and heat waste, carbon waste, of course. Don't blame the children and enslave them as debt slaves to enrich elites. Get the 80% waste out of the system. Cars, airplanes, electricity, education, waste 80% or more. Be more efficient. Often that means NOT DOING SOMETHING. Get rid of wasteful professional sports and waste. Humans waste too much. Be Buddhist monks.
Armani Ghrissi
simply a goddess that Stephanie.
Phillip
It is definitive. Someone should give the nobel peace prize to robert gorden.
Thomas Underhill
good job iq2, this was a nice breath of fresh air.
aon10003
You had a big long recession between 1872 and ca 1900. Despite this , very significant strides where made. The biggest difference is that without inflation, you can't borrow on your house without paying back. The demise of the neoclassic economy is not the end of the World. In a normal World it would be the end of the banks.
gotsda
I wonder if people were saying the same things in the 1930's... Hmm.
CabbagePatch Bstard
Irritatingly pompous host at at the start.
utubetruthteller utubetruthteller
Historically western countries were successful by looting colonizing other countries of the world.
claudia xander
300 percent? wonderful tho
Kristopher Driver
Marvellous job, excellent panel and host. Such a great service you guys provide the world with so little appreciation. Thank you iq2!
William Alston
Nice, panelists were in good spirits.
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Jeffrey Sachs on America and a New World Is the Party Over for Economic Growth? 2 months ago   1:26:18

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‘America first!’ Donald Trump hammered out this message over and again in his inauguration speech a week ago today. He promised tariffs, a crackdown on immigration, and a restoration of American military might. He entered the White House as the least popular incoming president in 40 years.

Not every liberal thinker, however, is in a state of despair. Jeffrey Sachs was recently ranked by The Economist as one of the world’s most influential political scientists. No Trump supporter himself, he came to the Intelligence Squared stage to explain why there may be silver linings to the Trump cloud, and to set out a new world order.

Take trade. Trump has threatened to tear up Nafta and slam huge taxes on Mexican imports, and has already withdrawn the US from the Trans-Pacific Partnership to bring jobs back to the heartlands of America. While this strikes fear amongst free-trade supporters, there is a case to be made that globalisation has been moving faster than is politically sustainable, dividing rich from poor.
Or take Trump’s proposal to invest $1 trillion in infrastructure. Sachs has described this promise to rebuild America’s decrepit inner cities, highways, schools and hospitals as ‘a valid, indeed uplifting perspective’, provided it is done in a smart and fair way. Trump’s programme could be viewed as a Keynesian fiscal policy to boost competitiveness and job creation. It may, Sachs believes, be Trump’s great legacy.

And then there’s foreign policy. As Sachs pointed out, Trump has filled his administration not just with protectionists but also with business people like himself, who enjoy making a buck (in fact, billions of them) and who have profitably invested for years in Russia, China, and other emerging economies. So while the rhetoric may be all about American primacy and trade protection, we shouldn’t rule out some friendly deal-making with other countries. And while Trump’s future relations with Vladimir Putin remain obscure, would it necessarily be a dangerous move if he pursues a conciliatory line with Russia? From a Russian perspective, America’s meddling in Ukraine and its attempts to bring that country into NATO, which would take the US-led military alliance right up to Russia’s border, look like aggression in its own historical sphere of influence. Isn’t it time there were a better understanding between both countries?

Sachs argued that we are entering not a new tripolar world, dominated by the US, China and Russia, but what he calls ‘the World Century’, in which the rapid spread of technology and the sovereignty of nation states mean that no single country or region will dominate the world. For Sachs, the great foreign policy challenge will be to manage cooperation among regions, and face up to our common environmental and health crises. The idea that one place or people should have primacy over any other should be as antiquated as slavery or empire, and guard us against the senseless descent into violence.