2020-04-01 Bloomberg Markets Magazine

(Jacob Rumans) #1

Forward Guidance

Get Ready,

A Bigger Disruption

Is Coming


AS GLOBAL SUPPLY chains break, airlines
slash flights, borders rise within nation-
states, stock exchanges convulse with
fear, and recession looms over
economies from China to Germany,
Australia to the U.S., we can no longer
doubt that we’re living through
extraordinary times.
What remains in question,
however, is our ability to comprehend
them while using a vocabulary derived
from decades when globalization
seemed a fact of nature, like air and
wind. The novel coronavirus signals
a radical transformation of the kind that
occurs once in a century, shattering
previous assumptions.
The last such churning occurred
almost exactly a century ago, and it
altered the world so dramatically that
a revolution in the arts, sciences, and
philosophy, not to mention the discipline
of economics, was needed even to make
sense of it.
The opening years of the
20th century, too, were defined by a free
global market for goods, capital, and
labor. This was when, as John Maynard
Keynes famously reminisced: “The
inhabitant of London could order by
telephone, sipping his morning tea in bed,
the various products of the whole earth.”
This maker, as well as consumer,
of global capitalism could invest “his
wealth in the natural resources and new
enterprises of any quarter of the world,”
according to Keynes. He could also
“secure forthwith, if he wished it, cheap
and comfortable means of transit to

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