OUTRAGEOUS FORTUNES

Economic prophesying by a consultant who makes no claim to being “the economic Nostradamus.”

Altman opens by examining the business of economic forecasting, an art and science that could use a few Nostradamuses, but that is hampered by uncertainty—not least the experimental bias by which “predictions themselves may affect the future.” This, writes the author, is often the whole point of forecasting, warning of looming dangers and disasters that might sink an economy. He takes a longer view, however, and whether it can keep the ship from sinking we will not know for decades. One potential source of comfort for America-firsters is the roundabout view that China may well become an ever more important economic power, particularly if its government loosens controls on the economy to encourage foreign investment. However, “China is likely to fall short, both in its business practices and in the role of its government,” in the realm of technological innovation and implementation, which may be a more important determinant of economic strength. Such a forecast is debatable, of course, notably given the demographic pressures that are upon the West, with declining populations and lumbering social-welfare networks that will encourage workers to seek greener pastures (in Europe, writes Altman, in countries that are “endowed with essentially Anglo-Saxon or Scandinavian legal traditions”). The author ventures into such politically thorny areas as illegal immigration (“frequently an economic necessity”) and the current backlash against capitalism in many developing areas (which probably will not last). Meanwhile, he predicts, rich countries will become cleaner and richer and poor countries dirtier and poorer—reason enough to want to live in rich countries.

Interesting thought experiments that would have been made more interesting with a more vigorous use of actual dollars and cents (and yuan and euros). As to whether Altman is right, check back in half a century.