Hello, I have been attending recently a speech about economic tendencies, from
Guillermo Dorronsoro. I have found it very interesting because he presents what he calls economic paradoxes that indicate that a change of economic model is coming.
According to Thomas S. Kuhn, in "The structure of scientific revolutions", we explain a reality by going to a model, a paradigm.
For example: the Earth is at the center of the Universe because we see that everything moves around it, including the Sun. However, they begin to accumulate paradoxes that refute this model, we will have to resort to a new model that manages to explain these paradoxes We go to the heliocentric model, which was banned until 1835. Paradigm changes take time.
Paradoxes:
1) If population and consumption, and research and technologies are growing very strong, why is the global economy stagnating at around 3%?
- There are 7.4 million people on earth, in this century there will be the maximum number of people, from 2,100 will begin to decrease. The great demographic power is the one that increases its birth rate. The increase in the economy causes a decrease in the birth rate. Consumption will shoot up in India and China between 2020 and 2050.
- Investing in research is spreading around the world, China will reach the USA in absolute values by 2025. This career implies that science and technology is increasing as never before in the world.
2) The curve of the elephant. The left is the poorest, the right is the richest. The poorest are escaping poverty for the most part. The richest are still richer. However, the middle classes of the richest countries, around 70% of the richest, their wealth has stagnated.
3) We will be able to generate bigger and better products at less price. Vatican has divested in Petroleum for sustainability issues. The photovoltaic system will decrease its production cost dramatically. The energy is going to be cheap. However, employment will be increasingly scarce.
- Low qualification work grow: waiters, etc.
- High qualification work grow: blockchain, big data, etc
- Middle qualification work decrease. This is the paradoxe. Here are the middle classes.
The speed of processing in computer systems increases remarkably. We will arrive in this century to the point of singularity: the AI will have reached humans. The jobs that up to now we worked, will be better done by the IA. Will come a part-time job, will have to work on several projects at once. In short employment of worse quality.
4) We have achieved a state of wellbeing that has never existed before. However, we realize that this system is unsustainable. At least in Spain, this system is pyramidal. The base is responsible for holding the top. In Spain, around the year 2050, 92.90% of the population will be dependent: under 16 years or over 64. 7% of the population will have to pay the party to the rest, being part of this percentage public administration, whose salary It leaves the rest of the workers. It is not sustainable.
Some indicators of paradigm change:
1) Heterogeneous society. We are living radically different generations as never before in history:
- Builders
- Baby boomers
- X Generation
- Y Generation or Millenials
- Z Generation
- As the change is accelerating, another one will come even more different
2) Digital change. Retail is falling brutally in the USA because Amazon's digital sales are rising brutally and small businesses can not compete. Sector by sector, the digital world is going to revolutionize.
3) Collaborative economy.
- P2P transport
- On-demand household services
- Collaborative finance
- P2P accomodation
- On demand profesional services
Less and less people use a taxi, for example, they use Uber, Cabify.
Our economy was individual, including at the business level, owning something. The collaborative economy breaks this scheme. Every time this is being developed more in our days.
4) Circular economy.
I have to worry that everything I do does not generate waste or avoid unnecessary travel to save costs. This is coming because it is a growing social demand and because the economy will start to become scarcer. This can create many opportunities in the middle class sector, for jobs of medium difficulty.
5) The investment in science in Spain is not one of the most advanced in Europe, being that Europe is not one of the largest in the world. Our level of competence is born corseted. However, this does not worry anything at the popular level.
6) On-line demand is developing more and more. Even cars, can be parameterized online and arrive in 2 or 3 weeks at home.
7) More and more countries accumulate more debt. If the champions were Europe, USA and Japan, lately India and China have joined the club.
What to doMachiavelli, in his work "The Prince", chapter 25 (fortune, change) offers some advice in this regard, valid for the current situation:
- Adapt. Fortune, changes, is invincible. You have to understand what's coming and try to prepare for it.
- To resist. The change is hard and, therefore, learn to resist the challenges and know how to get up.
- Change. What needs to be changed, learn to change it and change it quickly, do not wait.
- Audacity We do not have to wrinkle before changes, we must have strength of spirit.
my ConclusionsAll this is known at the level of economic professionals and I would say that at street level for anyone who knows how to add two plus two. However, the solution of the politicians is always to increase spending (the public debt) so that the legislature does not appreciate the problem, thereby significantly increasing the problem in the short term.
In Spain, the new government, the result of an agreement of a multitude of political parties, that is, without real support from the electorate, have decided to increase taxes significantly, without a logical reason behind. Simply to please their electorate, pushing forward the necessary reforms and increasing the risk. Yeah, there are many bills to pay.
Said a Dutch politician, Mark Rutte, who had not felt that Europe devote 70% of its budget to agricultural matters. Do we want to continue being agricultural?