The radical anthropologist was that rare figure: a scholar who was also an activist.
In the third edition of the college-level textbook Macroeconomics, the economists Andrew Abel and future Federal Reserve Chairman Ben Bernanke blithely assert that “since the earliest times almost all societies … have used money.” They say that money arises from the inefficiency of barter—of trading one good for another—because “finding someone who has the item you want and is willing to exchange that item for something you have is both difficult and time-consuming.”
The evolution from barter to money is an old story in economics, repeated down the centuries in one form or another, to the point that even children are aware of it. It also happens to be only that: a story, and one with precious little evidence to back it up outside the heads of those who tell it.
While some economists imagine primordial villages and basic agricultural systems where birds are exchanged for flowers to illustrate the history of money, Abel and Bernanke come up with something much more immediate: The economist is hungry.
Barter systems would indeed make it difficult for an economist to eat lunch. Would a restaurateur exchange his goods for a lecture on monetary policy? Perhaps not, and the meal goes unsold and the economist goes hungry. Thankfully, the economist has students to whom he can sell his knowledge for dollars, which then function as a medium of exchange with which he can purchase his meal. The restaurateur is paid, the economist is satiated, while the students have learned something worthwhile.
But the only people who pay Ben Bernanke directly for his thoughts are investors. Students do not. Perhaps instead they borrow money to pay for the lecture, along with other lectures, a place to live, and the associated administrative costs of providing lectures to students. The interest on the debt eats up most of the students’ subsequent income from the job market, leaving them with no chance of ever paying off the principal in a reasonable timeframe. The debt will stick with them forever, even shaving off dollars from their Social Security checks, and make the normal mileposts of adult life—marriage, children—difficult or impossible to achieve. Fed up with their narrowed prospects, they join a group of activists who have taken up space, literally, in the shadow of New York’s financial institutions and they start talking about what they have in common: their debt. And they decide to do something about it.
Now this story, like the one the economist tells about the origin of money, is a stylized one used to illustrate broader truths about the world. But unlike what economists have said about money, it largely accords with known facts, and for that we have to thank the radical anthropologist David Graeber, who died earlier this week at the age of 59.
“We owe David so much,” the filmmaker and debt organizer Astra Taylor told me, noting immediately how he would have disapproved of using the language of obligation to encapsulate his life’s work.
Graeber had a long and distinguished career as both an activist and academic when the publication of his magnum opus, Debt: The First 5,000 Years, and his work helping organize Occupy Wall Street in 2011 made him that rare thing: a serious scholar and organizer who garnered respectful profiles in Bloomberg Businessweek and the Financial Times. He spent the last decade-plus at Goldsmiths and the London School of Economics after Yale controversially cut him off from tenure, which he suggested was due to his being “quite active in the Global Justice Movement and other anarchist-inspired projects.”
“The thing to understand about David is that he really was someone who equally had a foot in social movements and intellectual scholarly production,” Taylor said. “There are people who are known as leftists through their writing and the internet and never do anything that qualifies as organizing.”
Graeber was a link not just between grassroots movements and the academic world, but between generations of leftist social movements. He was a veteran of the anti-globalization protests in the 1990s who helped start Occupy, one of the facilitators of a debtor movement that would influence the policy agendas of Elizabeth Warren and Bernie Sanders. He was a supporter of the United Kingdom’s anti–tuition fee protests in 2010, which would be the seed of the Momentum movement and Jeremy Corbyn’s ascendance to the leadership of the Labour Party.
The question Debt sought to ask was one that seemed natural in the wake of a debt crisis that would claim millions of homes and thrust much of the industrialized world into first a sharp economic crisis, then a self-destructive series of austerity measures designed to stem the tide of sovereign debt.
What was debt? What was its history, where did it come from, and how did it take such a central role in our personal and economic lives? Why was our language of obligation and morality the same as the one used to describe our credit card bills? Why does the Lord’s Prayer ask God to “forgive us our debts as we also have forgiven our debtors”?
To even begin to answer this question, Graeber had to start with money and the bad history used to explain it. Generations of archaeologists, anthropologists, and historians had tried to find the origins of money (John Maynard Keynes referred to his own studies of money as his “Babylonian Madness”), but economists, especially in their textbooks, resorted to fancy.
These just-so stories about how money emerged from barter can evoke a kind of childish primitivism (“You have roosters, but you want roses,” one textbook says) or use imaginary historical examples. Even the stalwart progressive Joseph Stiglitz uses “what appears to be an imaginary New England or Midwestern town,” Graeber writes, to explain how money can replace barter, in the form of farmer Henry selling his firewood to “someone else for money” and then buying shoes from Joshua.
Graeber, in contrast, identifies the origin of money as “the most important story ever told” for economists, tracing it back to Adam Smith’s Wealth of Nations and even to Aristotle. This was “the great founding myth of economics,” he writes, that money was not in fact the creation of governments. It followed that economics was its own form of inquiry, separate from other ways of thinking about social life.
Graeber points out this account “has little to do with anything we observe when we examine how economic life is actually conducted, in real communities and marketplaces, almost anywhere—where one is much more likely to discover everyone in debt to everyone else in a dozen different ways, and that most transactions take place without the use of currency.”
Whereas the traditional account puts barter before money and money before debt, Graeber reverses this, noting that barter tends to only emerge in pre-industrialized societies when exchange happens outside of a familiar cultural context.
In the historical record of ancient societies in Mesopotamia, for example, there are prices of things that may be denominated by “money” (what an economist would call the “unit of account”). But merchants “mostly did much of their dealings on credit,” and “ordinary people buying beer from the ‘ale women’ or local innkeepers did so by running up a tab, to be settled at harvest time in barley or anything they had on hand.”
Where debt emerged in Sumeria, so did novel forms of social domination, whose eventual effects were so dire as to necessitate harsh management of its lenders. Those early Sumerian loans to peasants quickly led to peonage, with farmers “forced into perpetual service in the lender’s household.” Fields would go unsown or not be harvested as farmers would leave their homes in order to avoid collection. The result was periodic debt amnesties.
The book covers everything from Neil Bush’s divorce to speculation that the major world religions were responses to the coin-using great empires of the “Axial Age” of 800 B.C.E. to 600 C.E. (“It would be foolish to argue that all Axial Age philosophy was simply a meditation on the nature of coinage, but …” runs one especially expansive passage.) There is a reexamination of Cortez’s conquest of the Aztecs being spurred on by his own debt, and vignettes about the functioning of debt and money in Madagascar, where Graeber did field anthropological research.
Debt’s deep dive into the whole history of civilization had a paradigm-shifting political point. Graeber wanted to show that “war, conquest and slavery … played a central role in converting human economies into market ones,” and that “historically, impersonal, commercial markets originate in theft.”
He wanted to show that not only did money not arise from barter but also that states and markets worked hand in hand in its creation. And more than that, he wanted to interrogate an economic and historical worldview that tried to “reduce all human relations to exchange, as if our ties to society, even to the cosmos itself, can be imagined on the terms of a business deal.”
He ended Debt with a call for “some kind of Biblical-style Jubilee: one that would affect both international debt and consumer debt.” This would not only
relieve so much genuine human suffering, but also … would be our way of reminding ourselves that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements and that if democracy is to mean anything, it is the ability to all agree to arrange things in a different way.
Thanks to Debt’s almost absurd good timing, as well as his own involvement in Occupy, Graeber became one of the most prominent leaders in the post-Occupy anti-debt movement. Or rather, in the spirit of an anarchist activist, he enabled others to take the lead. Graeber’s efforts in helping start what would later become the Debt Collective were more like being “a facilitator or putting a band together,” Taylor, one of the group’s leaders, said.
The initial group that Graeber helped organize, Strike Debt, instituted a “rolling jubilee,” buying up medical debt and forgiving it. The group evolved to organize challenges to student loan debt incurred at for-profit colleges and has claimed to have helped eliminate over $1 billion of debt. Its efforts garnered the respectful attention of The New Yorker, which described the jubilee as “one of the few Occupy offshoots that has had a tangible effect on people’s lives.”
Debt Collective’s work would be echoed directly by the dueling calls from Elizabeth Warren and Bernie Sanders to cancel student loan debt during the 2016 presidential campaign.
The ideas in Debt also have been picked up by the Keynes-inspired thinkers that make up the school of Modern Monetary Theory, who see the state as a tool to mobilize the economy’s resources for the common good, unlimited by its ability to tax or take on debts and deficits. Alexandria Ocasio-Cortez referenced MMT when it came to funding the Green New Deal, and a leading MMT thinker, Stephanie Kelton, worked with Sanders. One of the brightest stars in the MMT firmament, Nathan Tankus, is an avid reader and admirer of Graeber.
“If we end up winning the fight over debt, money, and deficits and manage to fundamentally reshape this society it will have been in no small part of because of Graeber’s work,” Tankus said.
And while he is credited with coming up with the slogan “We are the 99 percent”—perhaps Occupy’s most enduring rhetorical legacy—he claimed that he could only be held responsible for “the 99 percent,” while “two Spanish indignados and a Greek anarchist” were responsible for “We,” and only later did a “food-not-bombs veteran put the ‘are’ between them.”
This impulse to go beyond himself, to submerge himself in the collective, wasn’t foreign to his scholarly work, either. At the time of his death, Graeber was working with archaeologist David Wengrow on a history of social inequality. It’s supposed to cover the last 42,000 years.
Inflating Away the Debt & The Wealth Effect (Lyn Alden)
Transcript
00:00but it seems like they’re fighting00:01deflation but probably more like00:03deflation of assets right so they keep00:05saying they can’t get the inflation they00:07want they can’t get it well i think i00:08think they’ve got it now00:09i think it’s a little bit over their00:10target at this point but00:12um the d but then at the same time we’re00:14seeing prices of everything going00:16through the roof from00:17used cars to use bicycles all the way to00:20all types of financial assets and all00:21those types of things00:22um so the deflation that they’re afraid00:25of is that really in the markets that’s00:26what they’re worried about stocks00:27dropping you know real estate dropping00:29bonds00:30crashing things like that yeah they were00:32well they were pretty explicit uh youknow a decade ago00:35when they uh point out that they wantedto do the wealth effect so theypretty much said they wanted to causeasset price inflation uh you know they00:42just you know00:43described a little bit more plately uh00:45and so that was their goal was tobasicallyincrease you know housing costs againincrease uh the stock market again00:51uh and if you do a lot of monetary00:53policy without doing a lot of fiscal00:54policy that that’s00:55that’s what you tend to get now we there00:58were still disinflationary forces over00:59the course that decade because for01:01example01:02uh you know about a decade ago you had a01:03period of commodity over supply01:05uh you had the slowdown in china and so01:08we’ve been kind of working through this01:09period of commodity over supply for a01:11while we also of course have the rise of01:13shale oil which was largely unprofitable01:15but it still contributed01:16to uh you know a ton of extra supply and01:18therefore pretty low prices across the01:20board01:21and so we’ve been in that kind of01:22disinflationary commodity environment01:24but we had a target you know inflationin asset prices inflation in health careinflation and education inflationand child care things like that where01:32you had you know deflation in electronic01:34goods you had deflation in commodities01:36uh deflation due to technology and kind01:38of offshoring things like that01:40uh and so you know from their01:42perspective uh you know they01:44would prefer the say the inflation rateto be higher than the treasury yieldsright because that’s how you can you canstop uh you know debt as a percentage ofgdp uh from from continuing to grow tocontrol if they01:56have you know the potentially nominal01:58gdp growing faster02:00than the combination of debt issuance02:02and as a percentage of gdp and interest02:04rates02:04uh but of course i mean that’s a really02:06bad environment if you’re holding cash02:07or bonds02:08and so there’s no free lunch i mean02:10someone somewhere is getting uh screwed02:12over sometimes02:13there are certain policy regimes where02:15the debtors are getting screwed over02:16and there are other times where the the02:18you know the the02:20people that own the debt that the02:21creditors are getting screwed over and02:23so02:23in this environment of high leverage02:25they they’re they’re trying to err on02:27the side of essentially the the02:28creditors getting02:30uh you know screwed over uh but instead02:32of kind of abrupt kind of nominal losses02:34they’d prefer you know to basically just02:36fail to keep up with inflation and02:37that’s what you saw back in say the02:391970s and 1940s02:40these inflationary decades ironically02:42they tend to deleverage things because02:44the bonds fail to keep up with inflation02:46uh but you don’t want to be the ones02:48holding those assets and that’s a pretty02:50big pool of assets02:51yeah definitely i guess that you kind of02:54talked about that and that’s what i was02:55trying to02:55figure out is like what are they trying02:57to optimize for because02:59uh to your point you know electronics03:00coming down and deflationary source03:02things like that and03:03for i guess it depends on which side as03:04you said which side you’re on but it03:06seems like that would be good things for03:07most people if prices were coming down03:09um asset prices i guess if you’re03:11holding asset prices you want them to go03:13up if you’re03:13if you want to buy them you want them to03:15be down right so i guess it depends but03:17like overall it seems like if most03:19people had their cost of living going03:21down that would be a good thing and nasa03:22prices going up03:24uh at the same time that would be kind03:25of a good thing so um i guess kind of03:28the the question was uh are they really03:30trying you know03:31i guess they’re kind of targeting the03:32cpi basket which is like this consumer03:34price of goods03:35basket but it seems like the big risk of03:36deflation is in the markets like03:38stocks could crash 50 80 percent the03:41real estate could crash 5003:42and that’s like a massive deflation hit03:44so you think that’s what they’re trying03:45to optimize for03:46i mean even though they’re always03:47talking about cpi pretty much i mean03:50they’re trying to keep asset prices up03:51they’re also03:52you know they’re increasingly talking03:53about kind of nominal gdp targeting03:55uh you know again trying to have nominal03:57gdp higher than uh03:58some of those interest rates and some of04:00the debt accumulation levels04:01uh and of course you know the the04:03perspective will depend on if you’re the04:05the monetary04:06authority or the fiscal authority so as04:08consumers we generally would prefer04:10uh you know price deflation uh while04:12still having our jobs so we don’t want04:14some some sort of economic contraction04:16uh but we want technology and things04:18like that to lower prices over time04:20so that our money goes further and04:22that’s you know that’s normally the best04:24case scenario04:24the only time that’s bad is if you havea debt bubble right because then the the04:28real value of your debt04:29goes up relative to your incomes and04:31things like that so if you if you had04:33avoided that in the first place04:35uh then that that deflation is really04:37good but what policymakers are afraid of04:38is that because we’ve had this you knowthis kind of mix of lower interest ratesandand you know different types of policymixes we’ve kind of encouraged this bigdebt build upand now you know they basically have to04:49in their view inflate it away before04:51they can they can kind of stabilize04:53and so if you’re the federal reserve04:54you’re trying to hold yields04:56lower than the inflation rate you’re04:57trying to be accommodative04:59uh and kind of you know trying to05:02balance between05:03you know uh causing asset bubbles uh but05:06then also you know not wanting to crash05:08the market so that’s their perspective05:10and if you’re fiscal policy makers05:11mainly you want to get votes every two05:13years or05:14four years or whatever the case may be05:16and you want to avoid you know rising05:18populism you want to avoid05:19uh you know things like that from their05:21perspective and so you you know05:22depending on which side05:24you know where you work essentially if05:25you’re if you’re the fed or if you’re in05:27the05:27congress you have kind of two different05:29things you’re balancing yeah05:31so the tools as you’re kind of laying05:32them out the monetary or the fiscal05:34monetary being like05:35issuing more debt to the banks monetary05:37or fiscal actually like putting money05:39out of the streets into kind of people’s05:40hands05:41and um it seems like you know i mean i05:44guess as a central bank05:45uh what’s the quote if all you have is a05:47hammer the whole world looks like a nail05:48and they really only have a couple tools05:50um and really it’s you know monetary05:52tools and so that’s kind of like05:53interest rates and05:54and increasing the debt supply uh the05:56money supply but05:58with interest rates i mean they’re06:00already almost down to zero06:02uh nominally we can talk about real06:03rates et cetera which i do want to get06:05to06:05but it seems like a lot of those tools06:07they’re basically running out of right06:09interest rates are down to zero06:10debts at all time high economy is not06:13growing so the debt to gdp is is tough06:15to move06:15i mean do you see that they’re like06:17running out of tools i mean like how06:19much further can this can be kicked down06:21the road06:21uh so for the federal reserve i do view06:23them as as towards the end of their rope06:25in terms of tools and so they really06:26only have two tools that they mostly06:28it’s interest rate manipulation06:30and asset purchases or sales in some06:32cases06:34and they have some other tools around06:35the margin like lending facilities and06:36things like that but ultimately it comes06:38down to06:38controlling them controlling uh the06:40price of money uh06:41and uh buying assets now the fiscal06:44authorities they06:44they’re the ones that you know they can06:46say send cash to people06:48uh but then they you know they have to06:50issue debt to do it uh06:51and so you have kind of i’ve described06:53it as like uh you know if you have like06:55a movie where they’re gonna launch like06:56a06:56nuclear missile like two generals have06:58to put their keys in at the same time to07:00so i viewed i view policy tools and07:02fiscal tools uh kind of like the two07:04keys there07:04when it comes to generating inflation uh07:07and so if you just have the07:09monetary policy that’s not generally07:11very inflationary on its own because you07:13can’t directly get money to people07:15right so the federal reserve can’t send07:17money to people all they can do07:18is control interest rates uh and they07:20can increase the amount of bank reserves07:22in the system but then those get stock07:23banking system because banks aren’t07:24doing loans uh and so07:26you have reserves go up you07:27re-capitalize the banks but doesn’t07:28actually get out into the public07:30on the other hand the fiscal authority07:31can send money to whoever they want as07:32long as they have a consensus07:34but they have to issue bonds to do it07:37and then therefore someone has to buy07:38those bonds which sucks money out of the07:40system07:41but then if you combine the two and the07:43treasury sends money to people they07:44issue bonds07:45which the federal reserve creates new07:46base money and buys those bonds and07:48holds them forever07:49well then you’re just literally07:50essentially creating new base money and07:52directing it into the economy07:54and that’s how you get say that the you07:56know the 25 percent broad money supply07:58year of year change that we had you know08:00in 202008:01and so that tends to be a more08:02inflationary environment especially if08:05they were to sustain it for several08:06years08:07and so i think you know as we go forward08:09obviously right now we’re having some08:10base effects08:11right so we’re in in say march april08:14may june you’re comparing it to the 202008:16period which was like the08:17kind of disinflationary crunch they had08:19during the worst part of the lockdown08:21and so we’re going to get some pretty08:22high bass effects like we’re probably08:23going to see08:24uh you know even even official cpi we’re08:26probably going to see it over three08:27percent year-over-year08:28uh but then the big question is going08:30forward uh you know what are we going to08:31do with08:32are they going to do like an08:33infrastructure build that also gets08:34monetized08:35are they going to do another round of08:36aid things like that and some of those08:38if they were to continue could be pretty08:40uh inflationary to a certain extent08:42especially because08:44you know a lot of economists don’t08:45incorporate say the current situation of08:47commodity markets08:48uh and so of course you know that kind08:50of say 15-year cycle of commodity supply08:53and commodity demand08:54has a big impact on inflation and so08:56when you’re in a period of commodity08:58oversupply08:59as it were for the past decade you know09:01that tends to keep a lid on09:02on most types of inflation whereas when09:05you’re in a period of09:06you know you say you haven’t done a lot09:07of capex uh you know you haven’t kind of09:09brought new minds uh09:11to market you haven’t found like new new09:13big uh you know we haven’t done the09:14investment09:16if you were to get that increase in09:17commodity demand uh well then09:19uh you know you have higher commodity09:21prices and that’s what we’re seeing09:22we’re starting to see that kind of show09:23up in the market where09:25many commodities are still below where09:26they were 10 to 15 years ago with some09:28exceptions like beef lumber09:30gold touch new all-time highs most of09:32them are still below their all-time09:33highs but they’re starting to break out09:35from their their big declining trend09:36they had09:37and so it does look like the 2020s could09:39be a more inflationary decade with09:41tighter commodity markets uh big big09:44increases in the broad money supply09:45and that money getting to people rather09:48than just stuck in the banking system09:49which of course can benefit some people09:51but then you have that that that risk of09:53inflation09:54where you you increase the broad money09:55supply by a lot but you haven’t09:56increased the the goods and services by09:58an equal amount
Luke Gromen – Oil Cartel Siding With China Can Destabilize the Petrodollar
Sept 2018 prediction: early 2020 US Will have to monetize the debt
SBTV picks the mind of Luke Gromen, founder of Forest For The Trees LLC, about an impending dollar crisis and what likely scenarios can destabilize the petrodollar in the coming years. We also asked him what his ideal monetary system would be if he got to choose it. Forest For The Trees website: https://fftt-llc.com
Discussed in this interview:
05:08 Why a dollar crisis is coming?
12:14 US dollar still the center of the world?
13:07 Gold is wanted as a global neutral reserve asset.
14:35 Saudis’ view of the Petro-dollar: conflicted
23:10 A world where oil is priced in multiple currencies
28:33 No credible reserve currency alternatives to the dollar?
31:29 Bancor: A suitable replacement for the dollar standard?
34:08 How should investors navigate the impending dollar crisis?
Ten reasons why a ‘Greater Depression’ for the 2020s is inevitable
After the 2007-09 financial crisis, the imbalances and risks pervading the global economy were exacerbated by policy mistakes. So, rather than address the structural problems that the financial collapse and ensuing recession revealed, governments mostly kicked the can down the road, creating major downside risks that made another crisis inevitable. And now that it has arrived, the risks are growing even more acute. Unfortunately, even if the Greater Recession leads to a lacklustre U-shaped recovery this year, an L-shaped “Greater Depression” will follow later in this decade, owing to 10 ominous and risky trends.
The first trend concerns deficits and their corollary risks: debts and defaults. The policy response to the Covid-19 crisis entails a massive increase in fiscal deficits – on the order of 10% of GDP or more – at a time when public debt levels in many countries were already high, if not unsustainable.
Worse, the loss of income for many households and firms means that private-sector debt levels will become unsustainable, too, potentially leading to mass defaults and bankruptcies. Together with soaring levels of public debt, this all but ensures a more anaemic recovery than the one that followed the Great Recession a decade ago.
A second factor is the demographic timebomb in advanced economies. The Covid-19 crisis shows that much more public spending must be allocated to health systems, and that universal healthcare and other relevant public goods are necessities, not luxuries. Yet, because most developed countries have ageing societies, funding such outlays in the future will make the implicit debts from today’s unfunded healthcare and social security systems even larger.
A third issue is the growing risk of deflation. In addition to causing a deep recession, the crisis is also creating a massive slack in goods (unused machines and capacity) and labour markets (mass unemployment), as well as driving a price collapse in commodities such as oil and industrial metals. That makes debt deflation likely, increasing the risk of insolvency.
A fourth (related) factor will be currency debasement. As central banks try to fight deflation and head off the risk of surging interest rates (following from the massive debt build-up), monetary policies will become even more unconventional and far-reaching. In the short run, governments will need to run monetised fiscal deficits to avoid depression and deflation. Yet, over time, the permanent negative supply shocks from accelerated de-globalisation and renewed protectionism will make stagflation all but inevitable.
A fifth issue is the broader digital disruption of the economy. With millions of people losing their jobs or working and earning less, the income and wealth gaps of the 21st-century economy will widen further. To guard against future supply-chain shocks, companies in advanced economies will re-shore production from low-cost regions to higher-cost domestic markets. But rather than helping workers at home, this trend will accelerate the pace of automation, putting downward pressure on wages and further fanning the flames of populism, nationalism, and xenophobia.
This points to the sixth major factor: deglobalisation. The pandemic is accelerating trends toward balkanisation and fragmentation that were already well underway. The US and China will decouple faster, and most countries will respond by adopting still more protectionist policies to shield domestic firms and workers from global disruptions. The post-pandemic world will be marked by tighter restrictions on the movement of goods, services, capital, labour, technology, data, and information. This is already happening in the pharmaceutical, medical-equipment, and food sectors, where governments are imposing export restrictions and other protectionist measures in response to the crisis.
The backlash against democracy will reinforce this trend. Populist leaders often benefit from economic weakness, mass unemployment, and rising inequality. Under conditions of heightened economic insecurity, there will be a strong impulse to scapegoat foreigners for the crisis. Blue-collar workers and broad cohorts of the middle class will become more susceptible to populist rhetoric, particularly proposals to restrict migration and trade.
This points to an eighth factor: the geostrategic standoff between the US and China. With the Trump administration making every effort to blame China for the pandemic, Chinese President Xi Jinping’s regime will double down on its claim that the US is conspiring to prevent China’s peaceful rise. The Sino-American decoupling in trade, technology, investment, data, and monetary arrangements will intensify.
Worse, this diplomatic breakup will set the stage for a new cold war between the US and its rivals – not just China, but also Russia, Iran, and North Korea. With a US presidential election approaching, there is every reason to expect an upsurge in clandestine cyber warfare, potentially leading even to conventional military clashes. And because technology is the key weapon in the fight for control of the industries of the future and in combating pandemics, the US private tech sector will become increasingly integrated into the national-security-industrial complex.
A final risk that cannot be ignored is environmental disruption, which, as the Covid-19 crisis has shown, can wreak far more economic havoc than a financial crisis. Recurring epidemics (HIV since the 1980s, Sars in 2003, H1N1 in 2009, Mers in 2011, Ebola in 2014-16) are, like climate change, essentially manmade disasters, born of poor health and sanitary standards, the abuse of natural systems, and the growing interconnectivity of a globalised world. Pandemics and the many morbid symptoms of climate change will become more frequent, severe, and costly in the years ahead.
These 10 risks, already looming large before Covid-19 struck, now threaten to fuel a perfect storm that sweeps the entire global economy into a decade of despair. By the 2030s, technology and more competent political leadership may be able to reduce, resolve, or minimise many of these problems, giving rise to a more inclusive, cooperative, and stable international order. But any happy ending assumes that we find a way to survive the coming Greater Depression.
• Nouriel Roubini is professor of economics at New York University’s Stern School of Business. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.