From 600+ conversations with the world’s leading thinkers.
Over this 99.9% of human existence, when technology advances, population advances and counterbalances any potential increase in human prosperity. Suddenly once technological progress reaches a tipping point, families start to invest in education, they economise on the number of children, and technological progress is converted into richer people rather than into more people.
Human beings have a real tendency to overreact on the upside and the downside. We are not rational investors. I do not believe that people make rational financial decisions! If you study financial decision-making you will find that human beings are irrational in a very predictable manner.
Academics, research analysts, and even regulatory agencies have recognized that today's markets are more liquid and less expensive than before the advent of HFT. This is no doubt due in part to the improvement in liquidity provisioning that has arisen from the better risk management that computers provide over human traders.
150 years ago, Aluminium was the rarest metal we knew of on the surface of planet Earth. Through technology we learned how to extract it from the bauxite in the Earth's crust, and discovered it was the most abundant metal. We went from Napoleon serving Kings and Queens on the finest Aluminium plate-ware to much more money made on Aluminium within 20 years.
We are living through a profound era where speculative failure is simply not an option, and is fought tooth and nail by the government. This is a trap. Here I am the fool looking to fail frequently.
China for example, aims to increase their buying by 400,000 barrels a day in the last quarter of 2012, and will be adding over 750,000 barrels of new refining capacity. That economic engine is still turning.
We need to get out of the peacetime footing that we are on and we need to get onto a wartime footing against this climate crisis. During World War II, the US allocated 50% of GDP roughly to fighting, and I believe we need to get to 50% of GDP sustained over 5 to 10 years.
These institutions walk, talk and act like commercial-organisations and must be treated as such.
The essence of the evolving global economic system is that all countries are dependent on one another in some way, and this includes finance. Emerging and developing countries are dependent on capital inflows from developed regions. But developed regions are also dependent on funds from the developing world!
We need to get out of the peacetime footing that we are on and we need to get onto a wartime footing against this climate crisis. During World War II, the US allocated 50% of GDP roughly to fighting, and I believe we need to get to 50% of GDP sustained over 5 to 10 years.
If you look historically at the historical contours of wealth- it's primarily created through private ownership. That's always been the case- and I believe it always be. Having said that…. the lines begin to get blurred when you start to look at places like Latin America and Mexico where the state-owned enterprises are dominated by individuals- like a Carlos Slim, for example…. or if you look at state-owned assets being privatised in a place like Russia where former KGB agents are now industrial capitalists.
I have never seen a good case for protectionism, but I can see a case for slowing down trade integration because it can be highly disruptive to domestic firms, markets and people's income in the short-run.