Viktor Shvets not only runs Macquarie Bank’s office in Hong Kong, but he’s also written a book. It’s called “The Great Rupture: Three Empires, Four Turning Points, and the Future of Humanity”, it’s an impressive read, it pulls together history, economics, geo-politics and psychology to try and map how the mis-steps of key empires, in the past, can help us prepare for a very uncertain future.
Viktor doesn’t shy away from the big issues in his book, and we cover it all in this episode. He offers one of the best explanations I’ve heard for the origins and the impacts of the debt-bomb that’s been building ever since Alan Greenspan’s infamous Put, that began pumping money into the financial system, in response to the 1987 stock market crash.
As productivity slowed, so did growth, and so debt was used to maintain asset prices, and to keep consumption ticking away.
The problem is that the debt is still growing, and no-one wants the music to stop. None of us are willing to see our house prices tumble or our pension funds wither; Viktor says.
This is not sustainable, because, of course, our eco-system is already struggling to deal with so many humans consuming so many resources.
It’s now a grim question of which system will crash first: the financial, or the environmental.
Listen on Soundcloud
On this episode…
I promise this one is not as depressing as I made it sound in the introduction. Viktor has done some incredibly deep research, and he offers a unique approach in synthesizing so many different ideas, field and perspectives.
Amongst it all, there is hope.
This optimism mainly comes from the Z-Generation, and some of the younger millennials, who are determined to reimagine capitalism. And, perhaps even embrace government and the public sector as institutions that can make positive change.
While the Boomers were the ‘I’ generation, the Millennials are the ‘we’ generation.
We cover: the debt-bomb, what changed in 1987 after the market crash, how productivity was replaced by leverage, our toxic addiction to infinite growth, big-data and AI displacing both labor and capital to create a new market where liberalism may not be a pre-requisite for innovation, the power of the information change to be far more transformative than the industrial revolution, and, will Gen-Z embrace the public sector as a powerful force for saving the environment and reversing the extractive-capitalism of the Boomers?
My key takeaway this week…
“There’s that famous line from the movie Wall St, “Greed is good!”. That’s your typical boomer from the 80’s. Likewise Madonna’s, “I’m a material girl”. But today, none of those issues really resonate with people. Now that Millennials and Z generation are becoming the majority, things are changing. And that explains the popularity of people like Bernie Sanders and the left of politics.”
Good Future’s Good Books
“There are very good history books, and good technology books, and political books, very good books on success and failure of empires, but I couldn’t find a single one that combined them all.
I struggled to find one book that combined all of those issues into one picture. And I’m guilty that one major issue that I didn’t deal with in the book was the environment. But I felt I was dealing with so many issues, I couldn’t go beyond that.
And of course, one major issue is Universal Basic Income, it’s been accepted as one of the remedies that societies may need to adopt, closely linked to Modern Monetary Theory. There is a plethora of books that discuss that aspect.”
Rise of the Robots By Martin Ford
Political Order and Political Decay By Francis Fukuyama
The Second Machine Age By Eric Brynjolfsson and Andrew MacAfee
After Picketty By Heather Boushey, J. Bradford DeLong, Marshall Steinbaum
Why Nations Fail By Daron Acemoglu & James A. Robinson
Between Debt and the Devil By Adair Turner
PostcapitalismBy Paul Mason
Top books on Universal Basic Income (UBI)
Utopia for Realists By Rutger Bregman
Basic Income: And How We Can Make It Happen By Guy Standing
A Capitalist Road to Communism By Robert Van der Veen
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