As 2024 unfolds, the world faces a tumultuous period marked by shifting paradigms and the challenge of outdated theories. The year ahead will be shaped by the repercussions of inflation, escalating trade conflicts, and ongoing war, influencing fields from central banking to technology, industrial policy, and energy.
Historian Thomas Kuhn’s concept of “paradigm shifts,” introduced over six decades ago in “The Structure of Scientific Revolutions,” remains pertinent today. Kuhn described how scientific theories change through a confrontational process in response to new discoveries. This idea, although often misused in other contexts, aptly describes the current global uncertainty.
Columnists aim to provide insights into the trends likely to dominate the year. Their goal is not precise prediction but to offer a new perspective on the forces shaping economies and societies. Last year’s predictions saw mixed success, highlighting the unpredictable nature of global dynamics.
Political ideologies will clash in elections in the United States, United Kingdom, India, Indonesia, and other democracies. Leaders increasingly portray these elections as existential decisions, with some, like former U.S. President Donald Trump, questioning the legitimacy of past and future outcomes.
Central banks, usually seen as stabilizing forces, face deep uncertainties. U.S. Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde grapple with the aftermath of rapid interest rate hikes following an unexpected inflation spike. The theoretical foundations of monetary policy are under scrutiny, and further errors could have significant political repercussions.
Higher interest rates also raise concerns about sovereign debt sustainability, pressuring political leaders to rethink spending and taxation. However, interventionist policies persist, with bureaucrats increasingly influencing cross-border trade, imposing financial sanctions, blocking mergers, and offering tax breaks and subsidies to attract businesses.
Despite potential dampening of corporate enthusiasm, a resurgence in mergers and acquisitions is anticipated. European banks, Hong Kong tycoon Li Ka-shing, and British oil giant BP are among those likely to engage in corporate activity.
The rise of generative artificial intelligence promises profound impacts beyond the tech industry. AI-driven systems could boost productivity but also threaten jobs, sparking a race for reliable data and regulatory challenges to address misinformation. Younger generations might react by reducing their online presence.
New narratives often conflict with old ideas and each other. For example, the U.S. push for electric vehicles might clash with efforts to reduce dependence on China. Additionally, once-dismissed green innovations like biofuels may see a resurgence.
The COVID-19 pandemic and the Ukraine war have underscored the potential for unexpected disruptions. Even the most astute decision-makers can be caught off-guard, as demonstrated by the recent conflict between Hamas and Israel, which erupted shortly after a declaration of regional calm by U.S. National Security Adviser Jake Sullivan. Such unforeseen events will continue to challenge prevailing paradigms in 2024.
