TEXT OF COMMENTARY
Bob Moon: As we noted earlier, the Great Recession ended in June of last year, according to the economists who decide such things. We also pointed out that doesn’t take into account still-high unemployment. And I’m sure you’ve heard that other “U” word weighing on the economy: “Uncertainty.”
Which got commentator Justin Fox thinking about what that really means.
Justin Fox: Business leaders have been complaining that uncertainty is keeping them from investing and the economy from growing. Many lay the blame on Washington. Companies don’t know what next year’s tax rates will be, they say, or how much the new health care regime is going to cost them. So they’re paralyzed.
I’m not gonna deny that there’s uncertainty emanating from our nation’s capital. It’s partly because we have this thing called a representative democracy, which causes economic policy to veer this way or that every few years. This is one reason why business types love China: Fewer course changes.
Of course, the frequent course changes of a democracy probably make wrenching, revolutionary changes less likely. Just look at China over the past century. What’s more, I’m dubious of the argument that politicians are the main source of today’s economic uncertainty. There are wrenching, revolutionary changes afoot in the global economy that affect business far more profoundly than anything Washington can come up with — at least on short notice.
To name a few: We have a financial system that’s prone to crisis. The rise of new technologies and the rise of new economic powers like China, India and Brazil are upending business models right and left. It’s also possible that global warming will soon bring sudden climate shifts that unleash massive economic change and turmoil. Now that’s uncertainty.
And here’s the thing: In the business world, uncertainty spells opportunity. It’s when almost everybody agrees on what the future will look like that investors and entrepreneurs do the stupidest things and blow the most money. Just think of the Internet stock bubble, or the real estate boom. Putting money into a project right now may seem scary and dangerous, but chances are that it’s a lot less dangerous than investing three or four years ago.
So let’s stop complaining about all the uncertainty, people. Let’s start looking for ways to make money off it.
Ryssdal: Justin Fox is editor-director of the Harvard Business Review.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.