Thirty tomorrows, by Milton Ezrati

Milton Ezrati discusses the opportunities and pitfalls of increasing globalization. He then provides insights and solutions on how to mitigate the economic pain incurred by globalization.

Over the next 30 years, Milton Ezrati argues, increasing globalization will cause profound structural changes that will create economic pain for some, opportunity for others.

Ezrati, a US economist and investment strategist, gives much weight to demographics — how low birthrates and aging populations in the developed world will lead to labour shortages and possible economic stagnation. This is in contrast to the developing world, with its plenitude of young, eager — and lower paid — workers ready to drive economic growth. Thus, lower-skilled, labour-intensive production will continue to migrate to developing nations, leaving the developed world scrambling to support its retirees at a time when pensions and government programs face funding shortfalls.

Like many others, Ezrati warns about the threat of reduced living standards in the developed world. But after setting up this bleak vision, he offers some ways to mitigate the pain. Things can be done to ease the adjustment to the new world order. And everything possible should be done to thwart protectionist tendencies and keep things moving toward more economic integration through international trade.

Targeted training for displaced workers, innovation to create high-value jobs, the right kind of financial help from governments — these are just some of the remedies he suggests. They aren't new, but Ezrati provides useful insights into how programs should be structured to have meaningful results.

His analysis takes pains to assess the value of the middle ground. In the case of innovation, he points out that governments and large corporations should take a coordinated, controlled approach, while allowing room for new ideas to grow from the grassroots. Not an easy balance to achieve, but one worth shooting for. He calls for more intellectual property and patent rights and policies to ensure that innovators can profit from breakthroughs.

Ezrati believes that more should be done to ward off dramatic boom-bust cycles and ease economic volatility. For instance, central banks should stop their single-minded focus on inflation control and turn their attention to imbalances in liquidity flows.

He acknowledges the importance of regulating financial markets, but cautions against blunt instruments that sometimes do more harm than good. Regulation tends to fail when anticipating crises; flexibility and room to react are more important than rules.

The book's title reflects the opportunity side of the equation — that each year over the next three decades will present a new tomorrow in terms of making choices about how to move forward. For nations that can adjust to the new global reality, Ezrati believes things may not be so bad after all.