This is what we found interesting from the current issue of the “The Economist” (January 30th-5th February 2010).

Business Information:

1. “ Britain’s economy started growing again in the fourth quarter of 2009. However, the country’s GDP was a mere 0.1% bigger than in the previous three months. Britain’s mounting debt burden, which is forecast to rise 78% of the GDP by 2014, continued to worry investors. PIMCO, one of the world’s biggest bond investors, declared that British gilts were ‘resting on a bed of nitroglycerine’.” (8)

Future Insight: ‘A needier era’ (67)

1. “ The 2010s, it is sometimes said, will be an age of scarcity. The warning signs of change are said to be the food-price spike of 2007-08, the bid by China and others to grab access to oil, iron ore and farmland and the global recession. The main problems of scarcity are water and food shortages, demographic change and state failure. How will that change politics?” (67)
2. “ In Europe the talk is of how to distribute the pain of cutting public debts. In America the return of mad-as-hell populism looks like a turn away from the politics of abundance (see page 39). Now, a report for the Brookings Institution, a think-tank in Washington, DC, and the Centre on International Co-operation at New York University looks at international politics in an age of want.” (67)
3. “ Pressure from demography, climate change and shifts in economic power builds up quietly for a long time—and then triggers abrupt shifts.” (67)
4. “ Governments, they say, should think more in terms of reducing risk and increasing resilience to shocks than about boosting sovereign power. This is because they think power may not be the best way for states to defend themselves against a new kind of threat: the sort that comes not from other states but networks of states and non-state actors, or from unintended consequences of global flows of finance, technology and so on.” (67)
5. “  What would all that mean in practice? They cite the Intergovernmental Panel on Climate Change (IPCC) and the Global Alliance for Vaccines and Immunisation as the sort of institutions they want more of: bodies that use technical expertise—leaving aside the IPCC’s mistake over the melting Himalayan glaciers—to induce countries to recognize their mutual interests.” (67)
6. “ Such agencies can promote foresight, and help governments think harder about the consequences of failure (unlike traditional diplomacy, which likes muddling over).” (67)
7. “ They propose an Intergovernmental Panel on Biological Safety along the lines of the IPCC to improve biosecurity…” (67)
8. “ Many of these ideas may go nowhere; national sovereignty is hugely resilient. But to those who call the whole exercise pointless, they cite Milton Friedman, who, when monetarism was being mocked in the 1970s, replied ‘our basic function (is) to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.’” (67)

Notes:

Humanity must envision the new economics of demographic explosion and human wants. Not to do so would be a grave mistake.

Buttonwood:

1. “ …Capital, like water, tends to flow around obstacles. Try to dam its movement at one point, and slowly but remorselessly it will find its way around.” (80)
2. “ So what might be the unintended consequences of Mr. Obama’s plan? The main impact will be on proprietary trading, the desks that attempt to profit from market movements with the bank’s own money. If more of these desks are shut down, the markets will become less liquid. That will mean wider spreads and higher dealing costs for other investors, though that may be a price worth paying for safer banks. It is more likely, however, that the prop traders will move to hedge funds. The big hedge funds will get bigger and will have more impact on the markets. The unregulated part of the finance sector will become more important systemically, something the authorities may regret when the next crisis comes along.” (80)

Books:

The Cracked Bell: America and the Afflictions of Liberty. By Tristram Riley-Smith.

1. “ Early in its prehistory, the author argues, America imported from England an ideal of freedom that was tempered by the moral sensibility of the Scottish Enlightenment. In the pressured atmosphere of America itself, however, the ideal was to become distorted by a radical form of individualism, which is now undermining social cohesion. ‘There is something almost pathological,’ he concludes, ‘ about a national narrative that is intoxicated by the spirit of freedom while failing to pay sufficient attention to its meaning.’” (94)
2. “…Americans have made a religion out of commerce, are intellectually impatient and consume more than they conserve.” (94)
3. “ America’s “consumerist creed” creates a “candyfloss culture” dominated by instant gratification, the fallout from which includes “obesity, debt, poverty and pollution”. Thus Thomas Jefferson’s mandate to pursue happiness “falls like kerosene on the torch of liberty”, warming many but “scorching and blinding” countless others.” (94)
4. “…The first decade of the 21^st century has seen the balance tip too far in the direction of hyper-individualism. Now the balance needs to be corrected.” (94)
5. “… Recast the Liberty Bell and make room for the civic values such as equality, fairness and justice that America has neglected as a result of its disproportionate emphasis on personal freedom.” (94)