This isn’t the future we were promised – Part I

Copyright G. Altmann

By Santiago Hunt

Have you ever felt that life is getting progressively more complicated? And no matter what, the goalposts seem to get further and further away, despite how hard you try? If you thought this, you’re not alone. And more importantly, you’re right. You’re not being paranoid or delusional. It is getting harder. The goalposts are being moved. This is not the future we were promised.

Many of the ripple effects of WWII, which shaped modern society, are coming to a close. After decades of (relatively) safe passage, we are now reaching 3 big challenges.  And the 3 of them are hitting us precisely at the same time.

The following is a 3-part series I’ve written on the subject. It starts off dry and technical, as I look into some macro difficulties we face. Bear with me. By the end of the series I hope to have built the case that this societal perception, where many feel they “were cheated from their future”, has truth to it.  And it is an omen of turbulent times ahead.

I don’t know what will come out of the new world. I’m not necessarily pessimistic. “Crisis means opportunity” is a cliché, yet it is true nevertheless.

But one thing is for sure – big shifts lie ahead. Be prepared.


The Macro Challenge: Our growth is slowing down

We’re slowing down. GDP growth in the world has been slowly but steadily declining for the past 60 years.

Source: World Bank

This is particularly true in the western world. In the US and EU, the last two decades have been the worst in terms of GDP per cap growth since 1961 (first year of consolidated World Bank/OECD stats).  LatAm recorded its second worst decade in terms of GDP per cap growth (following its turbulent 80s). And all of these numbers are pre COVID crashes.

Source: World Bank

2012 was a landmark year. You might have not noticed it. Few did. But it is estimated to have been the year where the global age dependency ratio bottomed. What is age dependency? It stands for the amount of people who are either too young/too old to work. Put in another way, 2012 was the year where we had the most workers vs. non workers ever.

Why is this so important? A couple of reasons. First, more workers equals more output. But perhaps more importantly, more people of working age means less people requiring support. In particular, pension and health support – which are expensive. What’s perhaps more concerning is the trajectory demographics will  show for the strongest global economies in the future…

Source: Our World in Data/UN Population Division

The declining demographic trend is already a thing today in economies such as Japan or Germany. But it will become the norm for today’s dominant economies in the future. This will be of particular concern to markets such as China and SK, which will show the greatest positive to negative flip.

That’s why 2012 was such a milestone. Every year we get further away from 2012, it’ll get increasingly harder to grow the world’s economy. And even if we raise the pension age bar (lowering labor age is out of the question), the overall challenge remains. Fewer people will be in the prime of their productive age, who in turn will be responsible of bearing the weight of an ever-increasing part of the population.

We could ask ourselves: Why is growth so important? Is never ending growth viable? The environmental tensions we see are surely a reflection of our relentless drive for growth?

This is a discussion that can lead down an endless rabbit hole sprinkled with evolutionary and philosophical takes on it. I’ll sidestep that debate. Because the elephant in the room is a different one: we have built institutions that rely on strong, never ending growth. Growth that we’re not achieving. Yet, these institutions are bloating out of control. The 3 examples that standout the most are Government, Education and Health.

More to come in “Part II: Our institutions are losing contact with reality


Cover image copyright G. Altmann


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