Opinion

Chrystia Freeland

Politics makes a comeback

Chrystia Freeland
Dec 13, 2012 20:43 UTC

Prepare for the revenge of politics. For the past few decades, the quants – mathematicians, physicists and technologists – and their younger brothers, the economists, have been in the ascendant. With their mathematical models and their ability to crunch vast quantities of data, they have shaped the way businesses understand the world and operate within it.

But politics is making a comeback. That was one of the persistent themes at an invitation-only high-powered international conference about systemic risk in the financial services convened by the Global Risk Institute in Toronto this week (I was the rapporteur). As one of the bankers put it, if you want to understand the world economic outlook for 2013, and where your company should invest, you can’t just talk to economists anymore: “You need to talk to political scientists.”

I tested that idea with two thinkers – one an economist, the other a political scientist – who make their living helping businesses understand the world. Perhaps not surprisingly, Ian Bremmer, the political scientist and founder of the Eurasia Group, instantly agreed.

“When I started the firm in 1998, I had to convince people about the importance of political science, and I was not always successful,” Bremmer said. Making that pitch is getting easier – Bremmer now has some 150 employees and 400 clients around the world.

That trend is growing, he believes, and he thinks a major driver is the rise of the emerging markets. Bremmer defines emerging markets as “countries where politics matters at least as much as economic outcomes;” he also points out that over the past five years emerging markets have been responsible for two-thirds of global growth. Put those together and you have a world in which politics matters more.

Falling birthrates: the threat and the dilemma

Chrystia Freeland
Dec 7, 2012 16:28 UTC

Which is the more powerful agent of social change: fear or sympathy? Women in rich and middle-income countries may soon find themselves enrolled in a real-life experiment testing this proposition. That is because birthrates are dropping in much of the world. Demographics may soon rocket to the top of the political agenda, demanding an entirely new way of thinking about women and motherhood and the economy.

One reason for the shift was, as it were, born in the USA. That is because, for a long time, the United States has watched declining birthrates in places like Western Europe, Russia and even China with an air of superiority. The United States, lusty and fertile, was bucking the demographic trends.

Then, last week, new data showed that in 2011 the U.S. birthrate fell to the lowest level ever recorded: 63.2 babies per 1,000 women of childbearing age.

Opportunity missed in U.S. bailout?

Chrystia Freeland
Dec 7, 2012 16:03 UTC

Sometimes, the aftermath is more devastating than the storm. That is the story of the 2008 financial crisis. It was disastrous at the time, but what has been worse is how long it has lingered. That halting recuperation is why the global economic meltdown is still at the center of the political debate in the Western world.

Much of the discussion is a replay of the familiar battle between the economists John Keynes and Friedrich Hayek: Is the solution stimulus or austerity? Amir Sufi, a professor at the University of Chicago Business School, has been doing provocative research that suggests we should be focusing on a different angle.

The real issue, in Mr. Sufi’s view, is where stimulus dollars should be targeted.

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