23 Global Developments to Watch, 2023-2028
Dr. Mansharamani's Predictions for the Next Five Years
In early 2022, the US National Debt crossed $30,000,000,000,000, a number so large that it is simply incomprehensible to many of us. The Beijing Olympics followed shortly thereafter, during which Russia’s Putin and China’s Xi affirmed their friendship without limits. Russia then invaded Ukraine – spurring an expansion of NATO and a commodity price spike. The US Supreme Court overturned Roe v. Wade and economies around the world contracted. America’s midterm elections didn’t produce the anticipated “red wave,” the Queen of England passed away, and China stuck with a zero COVID policy before it abruptly didn’t. Inflation persisted, the Fed hiked repeatedly, student loans were forgiven, mortgage rates surged, and markets fell as FTX collapsed. Oh, and I almost forgot that by the end of the year, US debt had crossed $31 trillion. All in all, a tough year!
There are many discussions of the year’s events, and I won’t try to outdo them here. Although I will shamelessly plug my son’s summary: The Kai Guy Show’s Year End Review. Three specific developments this year, however, did catch my attention: the pull-back in financial markets, the increasingly fragile state of the world’s leading autocracies, and the bluntly visible political polarization of the American electorate.
As noted in The Wall Street Journal, “reality has rudely but helpfully taught some hard economic lessons in 2022. To wit, excessive government spending has negative consequences such as inflation; modern monetary theory is a fraud; renewable energy can’t keep the lights on without fossil fuels; and (most cruelly) free money can’t last forever.” The last point was made crystal clear by the ~20% drop in the S&P 500 and a loss of more than 30% in the Nasdaq.
"Renewable energy can’t keep the lights on without fossil fuels..." (WSJ)
In geopolitics, there were increasing signs of fragility in the world’s leading autocracies. Russian males fled the country as the Kremlin drafted citizens into the military, Chinese citizens protested the country’s zero-COVID lockdowns, and thousands of Iranians were arrested after taking to the streets in support of Mahsa Amini.
Here at home, humorist Dave Barry poked fun at the midterm elections (in which I played a small role), sharing extremists’ views of each other: “On one side is the party of far-right, election-denying, coup-supporting, anti-democracy, environment-destroying, racist sexist homophobic transphobic gun-worshipping pro-slavery Handmaid’s-Tale fascists who are literal Nazis; on the other side is the party of extreme radical leftist, anti-family, anti-border, pro-rioter, criminal-coddling, tax-raising, economy-wrecking, godless un-American Communist baby-killing groomer pedophile sex perverts.” (Thankfully, most of us are nowhere near these extremes!)
In thinking about 2022, I can’t help but think of the Rascal Flatts song “Mayberry” which eloquently captures the spirit of the times: “It feels like this world’s spinning faster than it did in the old days…so naturally, we have more natural disasters – from the strain of a fast pace….” The song goes on to note the always-on existence that causes so much anxiety: “Sunday was a day of rest, now it’s one more day for progress…”
As I’ve stressed before, uncertainty and change are unavoidable realities of life. Yet all of us are asked to make decisions in the face of these fluid dynamics. What’s the best way to do so? Sadly, there is no one correct answer, but I believe we must look through the day-to-day noise to have any chance of identifying signals. Long-term trends that drive seemingly disconnected developments offer a compass to guide us through the numerous cross-currents that plague our lives; and as I’ve noted several times in the past, I believe this approach is at least marginally more useful than my Ouija board or Magic 8 ball.
Unlike many others who tend to make predictions on a one-year view, I opt for a 5 year look as a I believe time allows signals to surface amidst the ubiquitous noise. I’ve been doing this since 2012 and have publicly posted my predictions since January 2015. (Links: 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022). I’d encourage you to revisit any or all of them, not just to see how wrong (and sometimes right!) I can be, but perhaps also to notice how the mere act of considering alternatives can be constructive.
It’s in the spirit of thinking differently and embracing uncertainty that I offer you this year’s set of global developments to watch over the next five years.
1. Corporate America, after enduring a never-ending stream of DEI reporting requirements, pushes back against quota-driven standards. DEI 2.0 rises from the ashes and focuses on Diversity (of perspective), Equality (of opportunity), and Incentives (to do well).
2. As education and income levels rise, the global birth rate inches ever lower. Worries about over-population are increasingly replaced with concerns about an ever-shrinking human population on planet earth. Darrell Bricker and John Ibbitson’s Empty Planet: The Shock of Global Population Decline proves prophetic.
3. Social commentators begin acknowledging that we’ve slouched towards a dystopian future that more closely resembles Huxley’s Brave New World than Orwell’s 1984. Independent thinking is believed to generate instability, and many start to view the emergence of mandatory preschool as compliance conditioning; self-censoring becomes ubiquitous.
4. Continued advancements in next generation nuclear technologies inspire entrepreneurs and forward-looking civil servants in rural areas to form innovative industry-community partnerships. OKLO emerges as the world’s hottest company.
5. Decades after scientists confirm its powerful addictive qualities, sugar isdeemed a public-health hazard; the sugar industry attempts to pre-empt potential regulation by forming a diabetes assistance fund to help struggling individuals cope with the spiraling costs of complications and treatment.
6. The publishing industry faces an existential threat as a new breed of Content Capitalists emerge to fund those with promising long-form messages. Self-published books dominate book sales for the first time ever, driven in large part by the surging popularity of IngramSpark’s services among established authors.
7. Scientific breakthroughs and unexpected technical advances in directed energy weapons combine with improved sensor technologies and artificial intelligence to dramatically reduce the threat posed by hypersonic missiles. Military strategists concur the world is now safer and begin lobbying for increased federal funding of basic science.
8. Japan suggests that India be “evicted” from the QUAD – the US-led security alliance to contain Chinese expansionism – as the subcontinent’s continued allegiance to Russia in the United Nations is indirectly supporting Chinese interests. To demonstrate its anti-Chinese commitment, the Indian military engages the People’s Liberation Army in a disputed territory near Bhutan. China escalates by encouraging Pakistan’s Army to reciprocate in Kashmir. Tensions eventually dissipate.
9. Following the Supreme Court’s decision to overturn race-based affirmative action, education (re)emerges as the front-line of a culture war. Elite institutions comply with the ruling, but use financial aid to continue their affirmative action agendas. While Congress debates why such wealthy institutions are tax-exempt, the “Woke” Bubble bursts as companies, citizens, and leaders of all walks of life begin equating “equity” with socialism.
10. The US government, recognizing the unrivalled geopolitical power that would come from having unlimited clean energy, launches a modern-day “Manhattan Project” to make fusion viable. Lunar helium proves the ideal fuel for fusion, leading to new urgency in the US-China space race.
The US government...launches a modern-day "Manhattan Project" to make fusion viable.
11. Inflation peaks as the Fed-induced recession crushes demand. With time, supply chains gain new resilience and technology-enabled productivity and demographic-induced demand reduction combine to generate deflationary pressure and hints of secular stagnation. Interest rates, after rising for years, begin to fall; house prices, after falling for years, begin to rise.
12. As emerging markets consumers see their purchasing power rise, their diets shift to include significantly more animal protein – producing a demand shock on global agriculture. Alternative proteins, ranging from lab-grown meat to plant-based options, continue to attract investor interest but price and taste continue to limit consumer demand. The demand for edible insects such as crickets, silk worms, and black scorpions booms.
13. Republicans and Democrats come together to revive and pass The Sunshine Protection Act, a law that makes daylight savings time permanent and ends the twice-a-year, sleep-disrupting clock adjustments that CNN suggests are racist.
14. In an unexpected and welcome sign of multilateral cooperation, the United States and China lead a coalition of a dozen countries to redirect an earth-bound asteroid from wreaking unimaginable havoc to human life. Over time, today’s younger generations believe Armageddon is a documentary about these events, a development that irks the CCP.
15. Deepfake technologies are used in all walks of life, creating a mental health crisis the magnitude of which the world has never experienced; individuals struggle to understand what is real in a world in which anything and everything is believable. The New York Times again suggests plunging your face in ice water for 30 seconds can help alleviate the anxiety, but is forced to retract the recommendation after 2 people drown.
16. As awareness of the Chinese genocide of Muslims spreads, global consumers demand that cotton and solar cells be produced without forced labor. American cotton is branded “Freedom Cotton” and as the world’s only validated conflict-free cotton, earns a premium over global cotton prices. The US textile industry grows rapidly.
Global consumers demand that cotton and solar cells be produced without forced labor.
17. As the US Government increasingly does business with surveillance capitalists such as Google and Amazon, constitutional scholars suggest the Fourth Amendment applies to these “extensions of government” and claim their unreasonable search and seizure of personal data is a violation of the law. After being purchased at an enormous valuation by a company linked to Moscow, BeReal is seen as a threat comparable to TikTok.
18. As countries seek to secure needed commodities to power their economies and support their electrification goals, geopolitical vulnerabilities lead governments to increasingly mandate recycling and fund non-traditional mining endeavors. Japan emerges as the leading miner of commodities in outer space.
19. Following a downgrade of United States debt, the entire world begins to question America’s ability to repay the money its borrowed; nervous investors flock to safe assets, with US treasuries still thought by all to be the safest, ironically leading to a surge in prices and plunge in yields. The US dollar weakens, American exports boom, and the Chinese label the United States a currency manipulator.
20. As demographers and social theorists contextualize the Baby Boomers, they come to recognize the group as the most selfish in American history, noting they have enriched themselves while leaving mountains of debt to the next generation. This observation leads to widespread popular support for a massive increase in estate taxes, which unsurprisingly leads to an explosive upswing in charitable contributions.
A massive increase in estate taxes...leads to an explosive upswing in charitable contributions.
21. America’s healthcare infrastructure begins to bifurcate into “contagious” and “non-contagious” ecosystems; offices, hospitals, and urgent care facilities are duplicated to disrupt what public health professional determine to be one of the most powerful vectors through which diseases spread: treatment facilities.
22. America passes comprehensive immigration reform that relaxes the constraints on employer-sponsored visas, disposes of the country-quota system, and materially increases the number of lottery-based visas available to potential immigrants. Those who formerly chanted “Keep the immigrants out!” now welcome much-needed (and grateful) workers.
23. Investigative journalists expose Chinese and Russian efforts to promote division within America by stoking racial and gender tensions, leading to a resurgence in patriotism within the United States. Toby Keith writes a song about disinformation attacks on America and how we will fight back and prevail; US flag sales surge.
Each year, I end my predictions with the prescient words of John Kenneth Galbraith, who eloquently captures the essence of forecasters. There are, he notes, two types: “those who don’t know and those who don’t know they don’t know.” Feel free to decide which you think I am, but I do hope that these 23 possibilities are useful in spurring your thoughts.
Best wishes for a happy, healthy, and productive 2023!
~ Vikram