The ‘Outrageous Fortunes’ of the world economy
TEXT OF INTERVIEW
Kai Ryssdal: There’s a great tendency in business — especially now in the middle of earnings season — to look ahead, to try to figure out the projections for next month or next quarter. When you do that, though, it’s easy to lose track of the big picture, the really big picture.
Daniel Altman says we ought be looking years, and even decades ahead. He teaches at New York University’s Stern School of Business. In his new book, “Outrageous Fortunes,” he makes some predictions about what the global economy might look like down the road and what it might take to prepare for that future.
Daniel Altman, good to talk to you.
Daniel Altman: It’s great be here. Thanks.
Ryssdal: I’m going to start a little bit sideways with some nuclear physics. You make reference to the Heisenberg Uncertainty Principle in this book. And I should explain by way of saying, if you observe something, you are, in theory, going to change it — and you make that remark about observing global economy too.
Altman: That’s right. I think that only by having some idea of where we’re going under current conditions can we figure out what we need to do to change it. Just the action of looking at it is actually going to change the future for all of us.
Ryssdal: I wanted to talk for a second about what you point is the world’s largest economy — it’s not the United States, it’s not China. It is, in fact, the European Union. It’s been bailing out its member states right and left for the past year or so; is still, on the fact of it, relatively stable. But you think it’s going to break up, sooner rather than later.
Altman: Yes. I did an analysis of the economy’s in the European Union and tried to look at what their long-term risks were and what their long-term potential to grow was. And what I saw was really remarkable. You could see four segments of European Union countries — some leaders, some laggers, some wild cards — and they seem to be going in different directions. So my conclusion is actually that the European Union won’t necessarily abandon every piece of economic integration that it has now, but it’s likely to head onto several tracks in terms of where it’s going economically.
Ryssdal: Along those lines, you talk a good deal about the rise of the rest — emerging markets and the obstacles and the trends that they’re going to have to confront. What are you thinking is going to happen there?
Altman: I think there’s some great opportunities for some emerging markets. I have a chapter all about where the new economic hubs are likely to arise, and it won’t be in the classic places that are centers of commerce. It’ll be more in places where people enjoy the lifestyle and they can interact with other young, talented individuals. But I also think that there are some risks for these emerging economies. For example, the wave of neo-colonialism, where you see countries like China and Saudi Arabia buying up tracts of land and resources in what tends to be poor countries. These deals are probably going to work out badly in the long term for both sides.
Ryssdal: The United States, of course, is still the world’s biggest economy in absolute terms. It’s got military strength, it’s got the spirit of entrepreneurship. And yet, you do lay out some factors that you think are going to be a problem for the United States in the near-term future.
Altman: I think the United States, generally speaking, has some of the best economic fundamentals in the world. I know I sound a bit like John McCain, in the worst days of the recession, when I say that. But there are some problems. I think our immigration policy is deeply flawed, for example. It’s not economically motivated at all. We are creating artificial situations in our industries, where we may not be getting the people with the right skills.
Ryssdal: The last item in your book is, to my mind, the most important — the political institutions that we have here and around the world. And you make the point that they are not ready or really able to make some the decisions we need to make in the global economy.
Altman: Yeah, and it really does worry me. Without totally giving up our sovereignty, we can still at least talk about ways to create global governance mechanisms that would invest in the solutions to these global problems in a more strategic way. And I hope that domestically, we’ll consider lengthening the political cycle a little bit, because every two years is simply too short to get new politicians focused on long-term problems.
Ryssdal: Daniel Altman’s latest book is called “Outrageous Fortunes.” There’s an excerpt from it on our book blog.
Daniel, thanks a lot for your time.
Altman: Thanks very much for having me.
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